QUOTEQUOTE““We live in a post war world. Today We live in a post war world. Today

shooting wars are exception. But are shooting wars are exception. But are we entering an era of we entering an era of Resource Wars?.Resource Wars?. And energy is the principal resource And energy is the principal resource over which global competition is over which global competition is expected”expected”

(Shashi Tharoor, Member (Shashi Tharoor, Member of Parliament)of Parliament)

PUBLIC PRIVATE PARTNERSHIP IN PUBLIC PRIVATE PARTNERSHIP IN POWER SECTOR POWER SECTOR

A FOCUS ON ULTRA MEGA A FOCUS ON ULTRA MEGA POWER PROJECTSPOWER PROJECTS

Dr Rajesh Gangakhedkar

Sector

Fuel

Source: Report of the Working Group on Power Sector for Twelfth Plan

Source: Faster, Sustainable and More Inclusive Growth- An Approach to the Twelfth Five year Plan- Report of Planning Commission.

Projected Commercial Energy Requirement by the end of twelfth five year plan (2016-17) in million tons of oil equivalent.

Energy Statistics (CSO)

Energy Statistics 2012(CSO)

Energy Statistics 2012(CSO)

Energy Statistics 2012 (CSO)

PPP - RATIONALEPPP - RATIONALE• Cooperative relationship between

government and private sector.• Each partner in this synergy has a role

to play.• Considered as a solution for the

problem of infrastructure bottlenecks.• The model is being adopted for both

physical and economic infrastructure.

ULTRA MEGA POWER ULTRA MEGA POWER PROJECTSPROJECTS

• 4000MW Capacity• Economies of scale and higher efficiencies• All of them are coal based• To play a significant role in capacity

additions• Two Stage bidding process• A)RfQ B)RfP• Role of PFC (Special Purpose Vehicle),

ministry of power and the states

SOME UMPPsSOME UMPPs• Sasan-Reliance : Pit head coal project. Sasan-Reliance : Pit head coal project.

Five Units of 660 MW each. Seven Five Units of 660 MW each. Seven states.states.

• Mundra-Tata : Coastal Project. Five Mundra-Tata : Coastal Project. Five Units of 800 MW each. Five States.Units of 800 MW each. Five States.

• Krishnapatnam-RelianceKrishnapatnam-Reliance• Other UMPPs : Tilaiya, Cheyyur, Other UMPPs : Tilaiya, Cheyyur,

Sundergarh, TadriSundergarh, Tadri

COST EFFECTIVENESS?COST EFFECTIVENESS?• Super Critical TechnologySuper Critical Technology

Sub Critical Super Critical

Plant Efficiency (%)

34 37

Emissions (gms/Kwh)

1008 926

COST EFFECTIVENESS COST EFFECTIVENESS ((contd.))

• Competitive biddingCompetitive bidding(i)(i) Competition would act as reducer of Competition would act as reducer of

pricesprices• Payment Security MechanismPayment Security Mechanism(i)(i) Provision of Site, fuel linkage, water Provision of Site, fuel linkage, water

and other clearancesand other clearances(ii)(ii) Third party salesThird party sales• Ownership of resourcesOwnership of resources• Cheaper power equipmentCheaper power equipment

POSITIVE FACTORSPOSITIVE FACTORS• Positive attitude of international Positive attitude of international

lending agencies.lending agencies.• Provisions of Electricity Act, Tariff Provisions of Electricity Act, Tariff

PolicyPolicy• Role of PFCRole of PFC• A Well crafted Power Purchase A Well crafted Power Purchase

Agreement (PPA)Agreement (PPA)

ISSUES AND CONCERNSISSUES AND CONCERNS• Escalation factorEscalation factor• Supply constraintsSupply constraints• FinanceFinance• Distribution being the weakest linkDistribution being the weakest link• Land acquisition issues (Sasan, Land acquisition issues (Sasan,

Krishnapatnam, Tilaiya)Krishnapatnam, Tilaiya)• Go/No Go issueGo/No Go issue

CONCLUSION

• The UMPP is a laudable measure. There are high expectations in terms of capacity additions. It has to be taken to logical conclusion.

THANK YOUTHANK YOU