Hydropower DevelopmentHydropower Development

in Indiain India

27th July, 2006, New Delhi

National Hydroelectric Power Corporation Ltd.

Presentation Presentation

byby

S.K. GargS.K. GargChairman & Managing DirectorChairman & Managing Director

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INDIAN POWER SECTOR INDIAN POWER SECTOR

INSTALLED CAPACITY THERMAL = 83,272 MW (66 %)

HYDRO = 32,726 MW (26 %)

OTHERS = 10,091 MW (8 %)

TOTAL = 1,26,089 MW

ENERGY SHORTAGE = 9.3 %

PEAK DEMAND SHORTAGE = 12.8 %

CAPTIVE GENERATION = 14,636 MW

CONNECTED TO GRID

PER CAPITA ELECTRICITY = 606 kwh

CONSUMPTION

As on 30.06.2006

SOURCE: CEA

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PROJECTED POWER DEMAND IN INDIA(Ending XI Plan)PROJECTED POWER DEMAND IN INDIA(Ending XI Plan)

SOURCE: CEA / MOP

REQUIREMENT OF INSTALLED CAPACITY

(Considering GDP growth of 8%)

2,06,000 MW

EXISTING INSTALLED CAPACITY 1,26,089 MW

(Hydro-32,726 MW)

LIKELY ADDITION IN X PLAN 34,000 MW

(Hydro-10,000 MW)

LIKELY ADDITION IN XI PLAN 62,000 MW

(Hydro-15,000 MW)

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A) POTENTIAL ASSESSED BY CEA : 1,48,701 MW

B) INSTALLED CAPACITY DEVELOPED : 32,726 MW

C) UNDER DEVELOPMENT : 14,021 MW

D) PUMPED STORAGE POTENTIAL : 94,000 MW

E) SMALL HYDRO ( < 3 MW) : 6,782 MW

SOURCE: CEA

HYDRO POWER IN INDIAAs on 30.06.2006

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REGION-WISE HYDRO POTENTIALIN TERMS OF INSTALLED CAPACITY (IN MW)

SOURCE : CEA * Includes 5.25 MW in A&N Islands

REGION POTENTIAL

ASSESSESD

POTENTIAL

DEVELOPED

BALANCE &

UNDER DEV. Balance

%

NORTH

EASTERN 58971 1113 57858 98

NORTHERN 53395 11262 42133 79

EASTERN 10949 2497 8452 77

WESTERN 8928 6881 2047 23

SOUTHERN 16458 10968 5490 33

TOTAL 148701 32726* 115975 78

As on 30.06.2006

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INDIAN HYDRO SECTOR INDIAN HYDRO SECTOR

As on 30.06.2006

SOURCE: CEA

Sector Installed Capacity (MW)

Central Sector 6172 (19%)

State Sector 25448 (78%)

Private Sector 1106 ( 3%)

Total 32726

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HYDRO - THE PREFERRED OPTIONHYDRO - THE PREFERRED OPTION

• ABUNDANT POTENTIAL AVAILABLE IN THE COUNTRY

• CAN LEAD TO ENERGY SECURITY

• IDEAL TO MEET PEAKING DEMAND

• IMPROVES SYSTEM STABILITY

• INFLATION FREE POWER

• ENVIRONMENT FRIENDLY

• OPENS AVENUES FOR SOCIO-ECONOMIC DEVELOPMENT OF REMOTE AREAS

• RENEWABLE SOURCE OF ENERGY

• COST EFFECTIVE

• HAS ADDITIONAL BENEFITS LIKE IRRIGATION, FLOOD CONTROL, TOURISM ETC.

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HISTORICAL REASONS FOR SLOW HYDRO DEVELOPMENTHISTORICAL REASONS FOR SLOW HYDRO DEVELOPMENT

• LONG GESTATION PERIOD

• TIME CONSUMING PROCESS FOR CLEARANCES

• MORE FOCUS ON THERMAL GENERATION

• HIGHLY CAPITAL INTENSIVE & ABSENCE OF COMMITED FUNDS

• HYDRO POTENTIAL LOCATED IN REMOTE AREAS

• POOR FINANCIAL HEALTH OF SEBs

• TECHNOLOGY CONSTRAINTS

• INTERSTATE DISPUTES AS WATER BEING A STATE SUBJECT

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• ACCEPTED AS NATIONAL PRIORITY TO ARREST DECLINING HYDRO:THERMAL MIX RATIO, DESIRABLE BEING 40:60

• EMPHASIS ON HUGE UNHARNESSED HYDRO POTENTIAL IN THE COUNTRY ESPECIALLY NORTH EASTERN REGION WHERE 98% IS STILL UNHARNESSED

• KEY POLICY INITIATIVES TO ACCELERATE HYDRO DEVELOPMENT

• RENEWED INTEREST OF INTERNATIONAL FUNDING AGENCIES TO SUPPORT HYDRO PROJECTS DUE TO FOCUSED ATTENTION ON HYDRO POWER DEVELOPMENT BY THE GOVERNMENT

HYDROPOWER- THE REVIVAL HYDROPOWER- THE REVIVAL

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IMPEDIMENTS IN HYDRO DEVELOPMENTIMPEDIMENTS IN HYDRO DEVELOPMENT

(Cont...)

INFRASTRUCTURAL & ADMINISTRATIVE ISSUES

WATER IS A STATE SUBJECT

INTER-STATE DISPUTES

LAND ACQUISITION

INACCESSIBILITY OF THE PROJECT SITES

LAW & ORDER / MILITANCY PROBLEMS

FINANCIAL ISSUES

SECTOR IS HIGHLY CAPITAL INTENSIVE

14% ROE NOT VERY ATTRACTIVE

ABSENCE OF LONG TENURE LOANS

HIGH RISK ELEMENT

ADVANCE AGAINST DEPRECIATION IS DISALLOWED

FOREIGN EXCHANGE RATE VARIATION NOT A PASS THRU IN TARIFF

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REHABILITATION & RESETTLEMENT

ENVIRONMENT & FOREST CLEARANCE

ISSUES IN HYDRO DEVELOPMENTISSUES IN HYDRO DEVELOPMENT

(Cont.…)

ENVIRONMENTAL ISSUES

PREPARATION OF BANKABLE DPRs

GEOLOGICAL UNCERTAINITIES

DEARTH OF COMPETENT CONTRACTING AGENCIES

TECHNICAL ISSUES

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INFRASTRUCTURAL & ADMINISTRATIVE ISSUES

EFFORTS TO ARRIVE AT CONSENSUS FOR DECLARING “WATER” A CENTRAL SUBJECT FOR OPTIMUM UTILIZATION & DEVELOPMENT OF NATURAL RESOURCES. AT LEAST THE RUN OF THE RIVER SCHEMES BE DELINKED FROM STATE SUBJECT

INFRASTRUCTURE COST TO BE SHARED BY GOVERNMENT & DEVELOPER

SECURITY COST TO BE BORNE BY THE GOVERNMENT

12% FREE POWER PROVISION TO BE REVIEWED

INITIATIVES REQUIRED IN THE HYDRO SECTORINITIATIVES REQUIRED IN THE HYDRO SECTOR

(Cont.…)

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FINANCIAL ISSUES

LONG TENURE (20-25 YRS.) DEBT FINANCING TO BE MADE AVAILABLE

BENEFITS UNDER MEGA POWER POLICY TO BE MADE APPLICABLE TO PROJECTS OF CAPACITY 250 MW & ABOVE

INCREASE RATE OF RETURN ON EQUITY VIS-À-VIS THERMAL TO ACCOUNT FOR CAPITAL INTENSIVE NATURE, RISKS INVOLVED.

EARLY IMPLEMENTATION OF DIFFERENTIAL TARIFF FOR PEAK AND OFF-PEAK HOURS.

ADVANCE AGAINST DEPRECIATION TO BE CONTINUED

CONTINUE PASSING OF FOREIGN EXCHANGE RATE VARIATION THROUGH TARIFF

EXPLORE ORGANISATION WISE POOLED TARIFF CONCEPT

INITIATIVES REQUIRED IN THE HYDRO SECTORINITIATIVES REQUIRED IN THE HYDRO SECTOR

(Cont...)

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INITIATIVES REQUIRED IN THE HYDRO SECTORINITIATIVES REQUIRED IN THE HYDRO SECTOR

ENVIRONMENTAL ISSUES SIMPLIFY LAND ACQUISITION PROCEDURE & AMENDMENT TO LAND

ACQUISITION ACT FOR COMPULSORY ACQUISITION OF LAND IMMEDIATELY ON SANCTION OF THE PROJECT

DEFINED SOLUTIONS FOR RESETTLEMENT AND REHABILITATION ASPECTS INVOLVING GOVERNMENT, PROMOTERS, FUNDING INSTITUTIONS ETC

• MOEF CLEARANCE SHOULD BE FINAL AND BINDING TO STATES

TECHNICAL ISSUES PREPARATION OF BANKABLE DPRS THROUGH CAPABLE

ORGANIZATIONS

CREATION OF REVOLVING FUND FOR PREPARATION OF DPRs

INDUCTION OF LATEST TECHNIQUES FOR SITE INVESTIGATION & ENGAGEMENT OF REPUTED CONSULTANTS FOR COMPLEX PROJECTS

TURNKEY EXECUTION ON MERIT THROUGH INTERNATIONALLY REPUTED CONTRACTING AGENCIES

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NHPC IN

INDIAN HYDRO SECTOR

NHPC IN

INDIAN HYDRO SECTOR

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PROFILEPROFILE

POWER STATIONS UNDER OPERATION : 10 Nos. (3,755 MW)

PROJECTS UNDER CONSTRUCTION : 11 Nos. (5,623 MW)

X PLAN (2002-07) PROJECTS : 05 Nos. (2,480 MW)

ALREADY COMMISSIONED : 03 Nos. (1,580 MW)

XI PLAN (2007-12) PROJECTS : 16 Nos. (6297 MW)

XII PLAN (2012-17) PROJECTS : 12 Nos. (12,080 MW)

LIKELY CAPACITY BY 2012 : > 10,000 MW

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FINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTS

AUTHORISED CAPITAL : 15,000

PAID UP CAPITAL : 10,600

NET WORTH : 15,300

VALUE OF ASSETS : 23,700

TURNOVER : 1714

NET PROFIT : 743

DIVIDEND PAID (2005-06) : 223 *

AVG. RATE OF BORROWING : 6%

CREDIT RATING BY : ‘AAA’ FOR DOMESTIC

Rs./ Cr.

INTERNATIONAL AGENCIES & ‘BB+’ FOR INTERNATIONAL BORROWING

* Interim Dividend of Rs 64 Crs paid

(As on 31.03.2006)

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POWER STATIONS UNDER OPERATIONPOWER STATIONS UNDER OPERATION

S.No. Name of the Power StationsInstalledCapacity

(MW)

Year of

Comm.

Tariff

(P/Kwh)

1 BAIRASIUL (HP) 180 1981 73

2 LOKTAK (Manipur) 105 1983 103

3 SALAL (J&K) 690 1987 / 1996 63

4 TANAKPUR (Uttaranchal) 120 1992 115

5 CHAMERA – I (HP) 540 1994 130

6 URI (J&K) 480 1997 209

7 RANGIT (Sikkim) 60 1999 178

8 CHAMERA-II (HP) 300 2004 256

9 DHAULIGANGA-I (Uttaranchal) 280 2005 183

TOTAL 2755

JOINT VENTURE

10 INDIRA SAGAR (MP) 1000 2004 / 2005 160

GRAND TOTAL 3755

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X PLAN PROJECTS X PLAN PROJECTS

S.No

Projects Installed Capacity(MW)

Scheduled Year of Comm.

Status

1. CHAMERA-II (HP) 300 2003-04

Commissioned2. DHAULIGANGA (UA) 280 2005-06

3. DULHASTI (J&K) 390 Nov 06 Under construction

4. TEESTA-V (SIKKIM) 510 Feb 07

TOTAL 1480

JOINT VENTURE

5. INDIRA SAGAR (MP) 1000 2004-05 Commissioned

GRAND TOTAL 2480

PlanTotal Hydro Capacity

Addition (MW)

Capacity Addition By NHPC (MW)

% share of NHPC

X PLAN (2002 – 2007)

10,174 2,480 24

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XI PLAN PROJECTSXI PLAN PROJECTS

S.No

Projects Installed Capacity (MW)

Scheduled Year of Comm. Status

UNDER CONSTRUCTION

1 SEWA-II (J&K) 120 May 08

Under Construction

2 TEESTA L/D – III (WB) 132 Mar 08

3 PARBATI-II (HP) 800 Sep 09

4 TEESTA L/D – IV (WB) 160 Sep 09

5 URI-II (J&K) 240 Nov 09

6 CHAMERA-III (HP) 231 Aug 10

7 SUBANSIRI LOWER (Ar. P) 2000 Sep 10

8 PARBATI ST- III (HP) 520 Nov 10

SUB TOTAL 4203

9 OMKARESHWAR(JV) (MP) 520 Feb 08 Under construction

Cont…

PlanTotal Hydro Capacity

Addition (MW)Capacity Addition

By NHPC (MW)% share

of NHPC

XI PLAN (2007- 12) 15,020 6,297 42

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S.No. ProjectsInstalled Capacity

(MW) Scheduled Year of

Comm.Status

NEW PROJECTS

10 NIMMO-BAZGO (J&K) 45 2010-11 CCEA*

cleared11 CHUTAK (J&K) 44 2010-11

12 KOTLI BHEL –IA

(Uttaranchal)195 2011-12 DPR submitted on

03.01.2006

13 KOTLI BHEL –IB

(Uttaranchal)320 2011-12 DPR submitted on

30.01.2006

14 KOTLI BHEL –II

(Uttaranchal)530 2011-12 DPR submitted on

30.03.2006

15 LAKHWAR VYASI

(Uttaranchal)420 2011-12 DPR submitted on

30.03.2006

16 BAV-II

(Maharashtra)20 2010-11 DPR submitted on

31.03.2006

GRAND TOTAL 6297

XI PLAN PROJECTSXI PLAN PROJECTS

* CCEA in meeting held on 02.06.2006 has cleared the project, sanction letter is awaited.

Contd

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FUNDING PLANFUNDING PLAN

Rs. in Cr.

X PLAN

(Estimated)

XI PLAN

(Estimated)

TOTAL

GBS 5,521 14,051 19,572

IEBR * 6,163 33,542 39,705

TOTAL 11,684 47,593 59,277

* Internal & Extra Budget Resources (IEBR)

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RAJIV GANDHI GRAMEEN VIDYUTIKARAN YOJANA (RGGVY)

• NHPC HAS BEEN ENTRUSTED WITH RURAL ELECTRIFICATION WORKS UNDER

RAJIV GANDHI GRAMEEN VIDYUTIKARAN YOJANA IN THE FOLLOWING AREAS

WITH TOTAL ESTIMATED COST OF RS. 1550 CRORES:

PURULIA DISTRICT OF WEST BENGAL,

EAST CHAMPARAN, WEST CHAMPARAN, DARBHANGA, SITAMARHI,

SHEOHAR & MADHUBANI DISTRICT OF BIHAR,

DURG, KAWARDHA, RAJNANDGAON, DHAMTARI, KANKER, RAIPUR &

MAHASAMUND DISTRICT OF CHHATTISGARH

KATHUA, JAMMU, UDHAMPUR, KARGIL, SRINAGAR, BADGAM, LEH DISTRICT

OF J&K

RAYAGADA, GANJAM, PHULBANI, BOUDH, PURI AND GAJAPATI DISTRICT

OF ORISSA

- NHPC SHALL GET AGENCY FEE AS 12 % OF THE SANCTIONED COST

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INDIA HAS HUGE HYDRO POTENTIAL PROVIDING

AMPLE OPPORTUNITY FOR ALL THE PLAYERS.

GOVERNMENT’S FOCUSED ATTENTION AND

EXTRA THRUST TOWARDS HYDRO SECTOR MAY

CONTINUE SO AS TO ACHIEVE THE DESIRED

HYDRO:THERMAL MIX IN THE COMING YEARS.

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THANK YOUTHANK YOU