India’s ModernizationCase of Energy Sector

Presentation at

International Conference on Development Models of Modernization Processes,

China and the WorldSeptember 24 – 26, 2005

Liuzhou, Guangxi Zhuang ARP.R. China

By T L Sankar

Administrative Staff College of India,Hyderabad, India.

CHINA & INDIA Similarities & Differences

• Most Populous Countries. It is No.2. China is No. 1.

• It has unique history of Political stability and a Socialistic Pattern of Government which has continued for 47 years.

• The Country was very poor when Independence came.

• Today it has Commendable Achievements in different fields.

INDIA-Previous Achievements..

• GDP Low Rate of Growth• Food Crisis• Foreign Exchange Crisis• Emerging Energy Crisis

GDP Growth – Story so far

From the dawn of independence, India registered a slow but steady rate of growth of GDP of only 2 to 3 % per year,criticized as the “Hindu-rate” of growth.In the early eighties with some changes in the economic management the growth rate increased to a norm level of 5 to 6%. India is reaching out to a 8% GDP growth in the new millennium.

GDP Growth

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

Rs.

in C

rore

s

India – Green Revolution

• India was among the most successful countries in ushering in the Green Revolution. Food grain production almost doubled from 72 MT in 1965-66 to 129 MT in 1978-79 during the green revolution. Today the production is close to 212 MT.

Agricultural Production in India

0

50

100

150

200

250

MT

Whenever faced with a Challenge, India bounced back stronger and self reliant. From a food starved country in 1967, India became self sufficient in food-grain by the early eighties.

India – Forex Reserves

• With less than $ 2 Billion forex reserves in 1991, the reserves have leapfrogged to nearly $130 Billion due to a series of economic reforms and continued focus on economic development

After Green Revolution, India proved itself again – this time on the Forex Front

Forex Reserves of India

0.0020.0040.0060.0080.00

100.00120.00140.00

Bn

$

From Crisis to Abundance

Source : India Infoline -Economic Survey of India

Growth of Installed Capacity since Sixth Plans

Plan/Year Hydro Thermal Wind Nuclear Total

March, 1985 (End of VIth Plan) 14460.00 27030.00     1095 42585.00March, 1990 (End of VIIth Plan) 18308.00 43763.00     1565 63636.00March, 1992 (End of 2 Annual Plans)

19194.00 48086.00     1785.00 69065.00March, 1997 (End of VIIIth Plan) 21658.00 61912.00     2225.00 85795.00March, 1998 21904.51 6404.64 968.12 2225.00 89102.27March, 1999 22479.13 67565.41 1024.01 2225.00 93293.55March, 2000 23857 70493 1154.88 2680.00 98184.47March, 2001 25142.00 72355.00 1269.00 2860.00 101626.00March, 2002 (End of IXth Plan) 26269.00 74549.54 1507.46 2720.00 105046.00March, 2003 26910.23 76606.91 1735.66 2720.00 107972.80March, 2003 29500.23 77968.53 1869.66 2720.00 112058.42July, 2004 29625.23 78491.45 1869.66 2720.00 112706.34

Per Capita Energy Consumption

Source : BP Statistical Review of World Energy 2004

In spite of this growth, the per capita energy consumption of India is far lower than that of the developed nations and some developing nations. Even to reach world average it has to increase five fold. With a population of over a billion, fast moving towards 1.5 billion, this would be a daunting task with some consequences for the world energy market.

TPES (MtOE)

7.96

4.05

0.96

0.3

1.65

0 1 2 3 4 5 6 7 8 9

World Avg

USA

Japan

China

India

MtOE

Electricity Consumption per Capita (kWh)

14378

8935

1247

526

2571

0 2000 4000 6000 8000 10000 12000 14000 16000

World Avg

USA

Japan

China

India

kWh

India’s approach towards self-reliance in energy could help India & also other countries

Energy Situation

• Major sources of Energy are:• Coal – Growth Rate How it has achieved ?• Oil – Growth Rate – How it has achieved?• Gas Growth Rate – How it has achieved ?• Electricity Growth Rate – How it has

achieved ?

India: Growth of fuel supply 1970-2000

Item Unit 1970-71 1980-81 1990-91 2003-04

Fuel Wood/Bio-mass mtoe

Coal for non-power use m.t

Total Coal m.t

Oil for non-power use m.t

Total oil use m.t

Natural Gas for non-power use

BCM

Total Natural Gas BCM

Non-Thermal Electricity

Mkwh

Total Electricity Mkwh

Item Units 1989-90 1994-95 1999-00 2003-04 Rate of Growth 1989-2003

Traditional Fuels Total

Million tons 234 267 305 340 2.7%

Commercial Fuels

- - - - - -

Total Coal Million tons 208 269 324 381 3.5%

Total Oil Million tons 57 71 103 124 5.7%

Natural Gas Million m3 11172 17339 26885 30900 7.5%

Hydroelectric Million kWh 62132 82727 80853 75242 1.4%

Nuclear Electricity

Million kWh 4625 5648 13249 17980 10.2%

Others (Renewable) etc.

Million kWh 146 769 5294 16121 VeryLow base

Total Primary Electricity Supply

Million kWh 66903 89144 99396 109343 3.6%

Summary Primary Fuel Consumption 1990-2004 (In Primary Units)

Item 1989-90 1994-95 1999-00 2003-04

Traditional Fuels Total 72 83 95 106

Commercial Fuel Total - - - -

Coal 95 121 145 171

Oil 57 71 105 124

Gas 10 16 24 44

Hydroelectric 14.4 19.8 19.4 18.0

Nuclear Electricity 1.1 1.4 3.2 4.3

Others (Renewable) etc. 0.04 0.18 1.27 4.2

Total Primary Electricity Supply 15.5 21.4 23.9 26.5

Total Commercial Energy Supply(sum of 2.1 to 2.7)

177.5 229.4 297.9 365.5

Grand Total Energy Supply(1 + 3)

249.5 312.4 392.9 471.5

Energy Consumption in Oil Equivalent Terms (mtoe)

Year

Coal & Lignite (mtoe)

Oil(mtoe)

Natural Gas

(mtoe)

Hydro-Electric

Generation

(mtoe)

Nuclear & Renewable

(mtoe)

AvailableTotal

supply(mtoe)

Imports(mtoe)

ImportDependency

%

1980-81 58.5 34.0 1.3 10.9 0.8 105.5 23.7 22.5

1989-90 95.0 57.0 10.0 14.4 1.1 177.5 28.4 16.0

1994-95 121.0 71.0 16.0 19.8 1.6 229.4 48.4 21.1

1990-00 145.0 105.0 24.0 19.4 4.5 297.9 84.1 30.0

2001-02 171.0 124.0 44.0 18.0 8.5 365.5 109.0 29.8

India: Commercial Energy Consumption – Import Dependency

Total Commercial

Year 1970-80 1980-90 1990-2003

Non-power-Coking Coal 3.62% 2.75% 0

Non power-Non Coking coal 1.96% 2.34% 2.04%

Non Power Oil products 5.40% 6.00% 4.90%

Non Power Gas 8.90% 23.00% 8.20%

Past Rates of Growth of fuel supply

Total Coal Supply

Total Oil Supply

Total Gas Supply

Total Electricity

India – Energy Needs 1/2

Several forecasts of India’s energy needs have been attempted by different agencies. However, they have used data of different periods and the GDP growth rates and horizons of the forecast vary.

For this presentation, using the latest data and based on long-term elasticity's, a new forecast has been attempted.

Period

TPCES mtoe wrt GDP (in 1993-94)

Rs. Crores

Electricity Generated

(utilities+non utilities) Mus wrt to GDP

1980/81-2003/04 0.97 1.241990/91-2003/04 0.80 1.041994/95-2003/04 0.74 0.98

Elasticities experienced by India

TCPES =Total Primary Commercial Energy Supply.GDP = Gross Domestic Product at constant Factor cost .M Units = Million kWh of electricity mtoe = Metric Tonne Oil Equivalent.

PERI0D TPCESElasticity

ELECTRICITYElasticity

2004-05-2014-15

0.80 0.95

2014-15-2024-25

0.75 0.85

2024-25-2029-30

0.70 0.78

India – Energy Needs 2/2

Based on Elasticities set out, demand for Total Primary Commercial Energy Supply (TPCES) and Electricity supply have been projected assuming, a GDP Growth of 8% and official population estimates.

YearPopulation

MnElectricity

Bwh2004-05 1084 341 6802009-10 1169 465 9812014-15 1259 634 14152019-20 1356 848 19662024-25 1461 1135 27312029-30 1573 1490 3700

A comparison of the rates of increase of supply of energy in the past with the rates required as per the forecast is set out in the table below :

Period TPCES Electricity Generated (Utilities+non utilities)

1980-2003 (Actual)

5.1% 6.9%

2004-2019(Reqd.) 6.2% 7.3%

2020-2030(Reqd.)

5.8% 6.6%

The demand forecast suggest that the effort in supplying total primary energy consumption in the next decade would be about 1% higher than in the past it was around 5%. This will call for some concerted effort.

Forecast of Energy Demand - Indices

0

100

200

300

400

500

600

2004-05 2009-10 2014-15 2019-20 2024-25 2029-30

PopulationTPESElectricity

TPCES

India – Specific Fuel Needs for Non Power uses

The important commercial energy sources are Coal Oil ,Gas and Electricity. Power is generated from primary sources namely, nuclear, hydro and renewable and as thermal electricity from fuel sources namely coal and natural gas.The demand for oil,gas and coal for non-power uses and production of electricity from primary sources are first estimated. The coal and natural gas requirements for power generation are added, to derive the total fuel needs including for power generation.

Fuel Needs for Non Power use

Year Coal MMT Oil MMTNatural

Gas BCM2004-05 109 127 212009-10 130 152 252014-15 156 181 302019-20 186 216 362024-25 222 259 432029-30 265 309 51

Past Rates of Growth of fuel supplyYear 1970-80 1980-90 1990-2003Non-power-Coking Coal 3.62% 2.75% 0Non power-Non Coking coal 1.96% 2.34% 2.04%Non Power Oil products 5.40% 6.00% 4.90%

Based on these growth rates, and adjusting for a higher 8% GDP growth, the specific fuel needs for non power uses are projected.

Fuel needs for Non Power Use

0

50

100

150

200

250

300

350

2004-05 2009-10 2014-15 2019-20 2024-25 2029-30

Coal MMT

Oil MMT

NaturalGas BCM

Non Power Gas 8.90% 23.00% 8.20%

Fuel Needs for Power generationThe preferred source for power generation should be non-fuel sources - hydroelectric sources, nuclear wind, solar& other renewables. Production from non-fuel sources, however, is constrained by a few factors:

• Nuclear – Policy constraints, uranium availability, likely date of commercializing fast breeder reactors or thorium based cycles.

• Hydel – Adequate investigations, obtaining environmental clearance, making R&R arrangements

• Renewable – Snags in technology, high costsThe following targets have been adopted by for this exercise:

• Nuclear cumulative capacity 25,000 MW by 2030.• Hydel – 20% of total power generation by 2030.• Renewable – 5% of total electricity generated by 2030.

Non- Fuel based Power Generation

Total Electricity

Supply Reqd (a)

Hydro –(20%) (b)

Nuclear - (c)

Fuel Based =(a)-(b)-(c)-

(d)2004-05 680 136 15 29 5002009-10 981 196 25 49 7112014-15 1415 283 41 70 10212019-20 1966 393 66 98 14092024-25 2731 546 108 136 19412029-30 3700 740 175 185 2600

Year

Billion kWh.

Renewable(5%)(d)

Non Thermal Thermal

The fuel needs or forecast is done by first deriving the electricity likely from Non -fuel sources and then estimating the share of different fuels in power generation

India Projected Fuel Needs for power Coal continues to be preferred fuel for power generation. There are additional factors in favour of coal

• Predictability of future prices is higher in coal than in gas.• Long term fixed price contracts indexed to labour costs are possible in case of coal.

However, the recent shortages have led to a view that coal will not be available to support the power development fully. Natural Gas will be the alternative.

Scenario – I Gas based generation would be as at present, 13% of total thermal generation and rest 87% will be from coal.

Year Total Thermal Electricity (BkWh)

Coal based BkWh

Gas basedBkWh

Coal Req.MMT

Gas Req. BCM.

04-05 500 425 75 297 15

09-10 711 605 106 424 21

14-15 1021 868 153 609 31

19-20 1409 1198 211 839 43

24-25 1941 1650 291 1155 58

29-30 2600 2210 390 1547 78

Scenario-II Coal production will be constrained to a growth rate of 5% considered as easily achievable and the rest of power requirement would be using gas.

To arrive at total fuel needs of India, two alternative scenarios are developed.

Year Total Thermal Electricity (BkWh)

Coal based BkWh

Gas basedBkWh

Coal Req.MMT

Gas Req. BCM.

04-05 500 370 130 259 26

09-10 711 493 238 331 47

14-15 1021 609 418 422 84

19-20 1409 769 640 538 128

24-25 1941 984 957 683 191

29-30 2600 1253 1347 877 269

Year/Plan End Generation RequirementBillion kWh

Capacity RequiredMW

Reference Year2006-07, 10th Plan End

700 140,500

2011-12, 11th Plan End 823 165,152

2016-17, 12th Plan End 1,209 242,663

2021-22, 13th Plan End 1,776 356,552

2026-27, 14th Plan End 2,610 523,892

2031-32, 15th Plan End 3,835 769,769

Note: The reference year consumption assumed is lower than the figures assumed by the Central Electricity Authority (CEA) given in the earlier para.

Long-Term Forecast of Electricity Requirements and Generation Capacity

16

• Wind Potential 45000 MW• Potential exploited 1267 MW

•Tamilnadu 787 MW•Gujarat 166 MW•Andhra Pradesh 89 MW•Karnataka 37 MW•Kerala 2 MW •Madhya Pradesh 22 MW •Maharashtra 155 MW

•Hydro Potential 15000 MW• Himachal Pradesh 1624 MW• Uttar Pradesh 1472 MW• Arunachal Pradesh 1059 MW• Karnataka 652 MW• Maharashtra 599 MW• Kerala 466 MW• Madhya Pradesh 410 MW• Bihar & Zarkhand 367 MW

•Potential exploited 1341 MW

• Oil Reserves 732 Mn Tons• Gas Reserves 763 Bn Cu Mtr• Reliance Gas find 198 BCM• Cairn Gas Find 28 BCM• Present gas prod 30 BCM pa

Oil & Gas

• Coal Reserves 246 Bn Tons• Jharkhand 71.14 Bn Tons• Orissa 59.10 Bn Tons• Chattisgarh 38.13 Bn Tons• Total Coal Mines 561• Present production of Coal &

Lignite in excess of 389 MT pa

Coal

•Biomass Potential 3500 MW• Maharashtra 1000 MW• Uttar Pradesh 1000 MW• Karnataka 300 MW• Andhra Pradesh 200 MW• Gujarat 200 MW• Punjab 150 MW

•Potential exploited 272 MW

Biomass

Small Hydro

Wind

• Municipal Potential 1000 MW• Industrial waste potential 700 MW• Projects implemented 9.5 MW• Projects under const. 5.2 MW• Projects under dev 21 MW

Waste

Sources of Energy

India has all forms of energy resources and they are available in all parts

Depth Ranges in Meters

Assessed Resources

TotalProved Indicated Inferred Prognosticated

0-300 63.2 40.8 7.1 2.2 113.3

300-600 5.8 21.5 6.5 13.9 47.7

0-600 (Jharia Only) 13.7 0.3 0.0 0.0 14.0

600-1200 m 1.7 6.4 1.7 19.7 29.5

Total 0-1200 84.4 69 15.3 35.8 204.5

Estimated Assessed Coal Resources (Billion Tons)

a

Area Crude Oil(Million Tons)

Natural Gas(Bullion Cubic

Meters

On-Shore 308 301

Off-Shore 352 462

Total 660 763

Average annual production

33 29

R/P Ratio 20 26

Oil and Gas Reserves

a.

Indian Nuclear Power Programme

14 reactors at 6 sites under operation 2770 2,770

6 PHWRs under construction 1,960

2 LWRs under construction 2,000

PFBR at Kalpakkam 500

Projects planned till 202013,900

TOTAL by 2020 21,180

CAPACITY MWe

India plans to have an installed Nuclear power capacity of about 21,180 MW by 2020

India’s Nuclear Power Programme is designed with the long term objective to serve as the source of electricity when other sources get exhausted. It is a key element of the energy self reliance strategy.In is dependent on developing technologies to use fuel breeding fast breeder reactors and Plutonium thorium mix as fuel.For this we may have to use imported fuel in about 7000 Mwe capacity.

Region Energy Potential

(TWH)

Capacity Potential at 60 % Load Factor

(MW)

Percentage Developed

Northern 225.0 30155 14.3

Western 31.4 5679 31.9

Southern 61.8 10763 49.2

Eastern 239.3 31857 1.0

Regional Distribution of Hydroelectric Potential

a.

Potential Potential Exploited

Solar Energy 5x10 whr/yr 47 MW

Biomass-based power 17,000 MW 484 MW

Small hydro 15,000 MW 1509 MW

Wind Energy 45,000 MW 1870 MW

Ocean Thermal 50,000 MW --

Sea Wave Power 20,000 MW --

Tidal Power 9,000 MW --

a

Renewable Energy Potential & Achievements March (2003)

Fuel/Energy Form Units 2009-10 2019-20

Electricity mu 892570 1755685

Oil Products mtoe 150.2 246.9

Natural Gas mtoe 47.2 101.9

Coal mtoe 248.7 447.6

a.

Long-Term Forecast of Energy Demand

Natural Gas-Strategies for Future

Natural Gas production stands at 32 BCM per annum and the reserves at 922 BCM

Growth in Production of Natural Gas (BCM)

1.4 2.4

18

29.5 29.7 31.4 32

0

10

20

30

40

1971 1981 1991 2001 2002 2003 2004

Figure 3.5: Reserves of Natural Gas (BCM)

62.29

410.65

729.79 762.95 750.71853.48

922.8

0100200300400500600700800900

1000

1971 1981 1991 2001 2002 2003 2004

• After a major jump in the production of natural gas in late 90s, the production has stagnated

• The new gas finds especially in deep off shore wells have added reserves of another 195 BCM in Reliance and 560 BCM in GSPC Fields.ONGC has not disclosed the reserves . These are yet to be certified by DGH.

• The new exploration by all agencies including ONGC is delaying the development of the gas fields in the hope that there will soon be a severe shortage of power and gas at high cost will be purchased by power generators.Even signed agreements are dishonored with impunity !

Natural Gas – Demand Supply-price nexus

Year Demand Supply

2004-05 36 34

2009-10 41 57

2014-15 52 85

2019-20 68 103

2024-25 85 ?

2029-30 113 ?

This demand-supply is on Business-as usual basis..New finds of gas deposits and promise of more have raised hopes of increased use of gas for power generation. India’s unique location of being close to some of the world’s largest gas deposits in Qatar, Oman, Iran and Central Asia has raised hopes to get piped gas or LNG from these sources. The price of gas defines the sectors and levels of use. At $4 per MMBTU and above gas can be used only in fertilizer, petrochemical and as auto fuel and domestic fuel. If the price of imported gas is about $3 per MMBTU, gas can substitute coal for power generation and its demand can become very large.Market rumours are that oil ministry is keen that gas prices settle at a high level !

BCM

Petroleum

India is the sixth largest oil consumer in the world with a share of 3.1% of the world consumption. The dependence on import for oil has reached a level of 72%.

The crude refining capacity of India today is at 132 MT. India has achieved self sufficiency in refining, at the present demand level.

0.26 0.456.82 10.51

33.02

8.2919.14

32.26

57.75 33.37

32.43

3.46

106.97

116.01

0

20

40

60

80

100

120

140

1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006

Years (1951-2004)(Production and Consumption Figures Pertain to the Year Ending of the Concerned Financial

Year)

Mill

ion

Tonn

es

Domestic Crude Oil Production Domestic Crude Oil Consumption.

Oil Pricing& Subsidies • Problem• Crude is imported-products are not

imported or exported ,except marginally. Product prices are revised with reference to the average of two price publications.Index of product price has risen faster than crude price.Refiners get windfall gains!

• Duties & taxes are ad-valorem and increase retail prices further.!

• Diesel & kerosene price difference leads to large scale adulteration. Kero subsidy is not focussed on BPL population.PDS is defunct in many places.

• LPG benefits commercial establishments

– Possible Actions• Product price should be indexed to

crude price allowing a good Gross Refinery Margin.

• Duties and taxes should be fixed w,r.t quantity and adjusted on a half-yearly basis to absorb part of the oil price increase shock.

• Market retail price of kerosene and diesel should be equal .The BPL families would get Kero-coupons and collect kerosene at a lower price with coupons which could be encased by oil companies.

• Misuse of subsidized LPG should be ruthlessly weeded out.

Power Sector-Continuing Challenges.

.

.

• CHALLENGES• With the enactment of the Electricity

Act 2003 the legal & Institutional problems resolved.

• Managerial and governance problems remain:

- Inadequacy of supply - High T&D losses -Poor quality of supply -Total lack of consumer concerns -Irrational tariffs -Metering and billing inefficiency

•

POSSIBLE SOLUTIONS• Encouraging Generation investment in all

sizes of plants.• Aggressively promoting Captive power

generation by clarity in regulation of open access & surcharge.

• Enforcing franchisee system at sub-station or feeder level involving consumers,

• Introducing total transparency in distribution through publishing a)Feeder level daily energy flows

b).All info on the connected load and total collection of revenue under each feeder and list of customers with pending bills of > 3months

c) Daily feeder-wise interruption report CAIDI should be published.• Spot billing with instantaneous printing.•

*

Hydro Power

India holds a potential to the tune of 150,000 MW of low PLF

Installed capacity today is 23,488 MW -just about 17% of the potential.

GOI in a recent exercise, Hydro Electricity Initiative, has made a comprehensive l survey of all potential hydroelectric sites for 50000 MW capacity and has identified 7000 MW projects which can deliver power at less than Rs 2.0/Kwhr.

India has established mutually beneficial arrangements with Bhutan where projects constructed mostly with Indian capital are handed over to Bhutan Government for management and power is purchased at mutually agreed rates. About 300 MW is being purchased and a new project with over 1000 MW will be ready by 2006 . Further potential is over 10000 MW for imports from Bhutan. Nepal is also likely source for over 20000 MWs

The possibilities of developing power generation from multiple sources and the opportunity to import hydel power from neighbouring countries suggest that achievement of the required level of power supply is within reach.

Alternate Energy Resources

A

Today the energy scene in India is admittedly disappointing. A crisis is brewing.The wakeup call has been given India has started responding.

We have the material resources. We have a competent technical man-power of adequate quality and quantity. We have the appropriate leadership at the top. India’s Prime Minister is arguably the most erudite and honest leader in the World. He has the reputation for having steered India over the forex crisis.

We are acutely aware that managing the emerging Energy Crisis involves: -managing Oil imports – how much would depend on actions taken towards conservation of oil in transport sector, introduction of new mass transport, and development of environment friendly cost effective bio-liquid fuels. - improving efficiency of power sector,in respect of governance, modernization and professionalization and - introducing appropriate reforms in the coal sector including environment policies to accelerate coal production. Achieving these would not be easy. But,The will to overcome the crisis is emerging .

Summing up

Public Sector Strategy

• Public Sector to begin with consolidating the small things into bigger ones.

• When Public Sector will established, allow local Private Sector to compete.

• Prices Regulations Gradually Removed.• Current Problems – How it is proposed to

be solved ?

Introducing Competition in Power Sector

• Open Access Allowed.• All transmission lines operated by Central

Government and State Governments.• Any Consumer or Utility can use

transmission facility of anyone else, subject to availability of capacity.

• He should pay a Wheeling Charge as fixed by concerned regulation.

• If the purchaser is not a utility, he should pay a surcharge equals marginal cost of procurement plus wheeling charge plus average T&D loss reduced from the tariff.

• Surcharge should be faced out _____ with the gross subsidy.

Policy Framework for the New Policy

• New capacity can be put up by central PSU, State PSUs, State utilities, private sector based power purchase agreement with the utility.

• Private sector units as merchant plants to supply bulk means.

Methodology and Principles of Tariff Determination are specified by CERC for CPSUs• Government shall with the advice of

Regulatory Commissions specify the process of bidding.

• All procurement should be on the basis of bidding usually bidding item is cost of supply of power fixed cost plus variable cost. Variable cost is a pass through.

Why Open Access ?

• It will enhance supply auction and introduce competition will open up markets and will help purchaser to sell to consumers outside the distribution area.

• It will support trading market.• Should lead to optimal resource

exploitation.

Why Surcharge ?

• Normally Incharge should be allowed.• In India all utilities and the regulators charged the

HT industrial consumers much more than poorer consumers like Households, Agriculture, Cottage Industries etc.

• The element of excess is called Gross Subsidy.• This gross subsidy will have to be determined.

As on I.C. (MW) Annual growth rate (%)

1947 1362  

31.3.1985 (End of 6th Plan) 42585 8.3631.3.1990 (End of 7th Plan 63636  

31.3.1991 66086 3.85

31.3.1992 69065 4.50

31.3.1993 72330 4.72

31.3.1994 76753 6.11

31.3.1995 81171 5.76

31.3.1996 83293 2.61

31.3.1997 (End of 8th Plan) 85795 3.031.3.1998 89021 3.8

31.3.1999 93263 4.7

31.3.2000 97796 4.9

31.3.2001 101695 3.931.3.2002 104851 3.1

31.3.2003 107973 2.98

31.3.2004 112058 MW 3.78

The Growth of Power Sector – Installed Capacity