Introduction to Electricity Act 2003

Presented By Indu Maheshwari Dy. Director

Overview - Indian Power System

Spatial Distribution Load

Of

Source:Powerline (Siemens Ad), Oct-2006

Jun 5, 2012

POWERGRID - NRLDC

680

720

760

800

82.5 0 84 0

880

920

960

Diversity Time Generation Resources Load Centers Long Haulage of Power Weather Seasons

J&K

PUNJAB

HP BHUTAN NER SKM NG NE ASSAM ME BIHAR MNP B MYANMAR E TRP DESH- MIZ JKND WB NEPAL

HARIANA RAJASTHAN

DELHI UP MP

GUJARAT

DIU DAMAN

L CTGR ORISSA MAHARASHTRA

S
GOA KARNATAKA AP PONDICHERY A&N TAMIL NADU SRI LANKA

LAKSHADWEEP

Typical Seasonal Load Curves For Northern Region

Jun 5, 2012

POWERGRID - NRLDC

111 11

Typical Seasonal Load Curves For Southern Region

SUMMER
EVENING PEAK

111 11

111 11

111 11

WINTER
111 11

111 11

MONSOON

111 11

111 11 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

1 1

Regional Grids Geographical

Inter regional Link NER-ER ER-NR 30,500 MW 48554 MW 2147MW ER-SR ER-WR SR-WR WR-NR Other 132 KV Links Talcher Kolar HVDC Bipole Total as on date Target for 2012
8

MW capacity 1,240 6,020 1,120 1,760 1,680 2,080 200 2,500 17,000 37,700

52132 MW

25272 MW 16,000

39280MW

Installed Generation Capacity Current: 187549.62 MW(Feb 29) Target for Year 2012: 200,000 MW Figures as on 29Feb 2012

Peculiarities of Regional Grids in India

Deficit Region

REGIONAL GRIDS
CHICKEN-NECK NORTHERN REGION
EASTERN REGION
NORTHEASTERN REGION

Snow fed run-of the river hydro Highly weather sensitive load Adverse weather conditions: Fog & Dust Storm Very low load High hydro potential Evacuation problems Low load High coal reserves Pit head base load plants Industrial load and agricultural load High load (40% agricultural load) Monsoon dependent hydro

WESTER NREGION

SOUTHERN REGION

The Electrical Regions

N-E-W Grid
NORTHERN REGION

1
EASTERN REGION WESTERNRE GION

NORTHEASTERN REGION

SOUTH Grid
SOUTHERN REGION

POWERGRID - NRLDC

10

International Connections
Bhutan

Tala HEP (1020 MW) 400 KV Chukha HEP (336 MW) 220 KV Kurichu HEP (60 MW) 132 KV Net import by India Over 16 links of 132/33/11 KV Net export to Nepal (about 10% of Nepals demand)

Nepal

INDIA 3,287,263 sq. km area

More than 1 Billion people (2001 census) March 2003 Installed Capacity of West synchronized 1,46000 MW (Jan-08)With East & Northeast October 1991 East and Northeast synchronized

August 2006 North synchronized With Central Grid

NEW Grid
South Grid

Central Grid

North West
South Five Regional Grids Five Frequencies
East Northeast

Merging of markets along with synchronization of

CURRENT SCENARIO CURRENT

SCENARIO

1 Status of a country is determined by per capita power consumption

India World average 613 Kwh/year 2596 Kwh/year

Country started with a very small MW 1947 -1500 MW to 1,46,902 MW today We are planning to add
10th Plan 11th Plan 41,000 MW 78,000 MW

Facing both peaking and general shortages

(MW) Total Thermal Coal Gas Oil Hydro Nuclear Renewable Total 93725 76,988.88 14,704.01 1,199.75 36,877.76 4, 120 13, 242 147965MW 10.5 0.9 24.7 2.9 7.7 53.3

(%)

GROWTH OF THE POWER SECTOR Per Capita Consumption of Electricity

Source :CEA

COMPARATIVE PER CAPITA CONSUMPTION OF ELECTRICITY (Kwh)

Overall PLF of generating stations improved from 74.2% to 78.6% (Year 2004-08) to 77.5 % (2010-11) (Source: CEA) T& D losses at 30.4% in 2005-06 were high as compared with low T& D Losses of 1015% in some of the developed markets. UK, US , Australia and Japan reported T & D losses as low as 4-8%

Electricity
Electricity, not a substance - A physical phenomenon of flow of electrons. It cannot be stored. Consumption and generation have to match. Flows through a medium to a path of least resistance.

Who are the players

A) Consumers Quality power supply Uninterrupted Affordable cost B) Government and its associated agencies C) Generation Companies D) Transmission Companies E) Distribution Companies F) Financing Companies And so on

Background

The Indian Electricity Act, 1910

Provided basic framework for electric supply industry in India. Growth of the sector through private licensees. License by State Govt. Provision for licence for supply of electricity in a specified area. Legal framework for laying down of wires and other works. Provisions laying down relationship between licensee and consumer.

The Electricity (Supply) Act, 1948

Mandated creation of SEBs. Need for the State to step in (through SEBs) to extend electrification (so far limited to cities) all across the country Main amendments to the existing Acts Amendment in 1975 to enable generation in Central sector. Amendment to bring in commercial viability in the functioning of SEBs. - Section 59 amended to make the earning of a Amendment in 1991 to open generation to private sector and establishment of RLDCs Amendment in 1998 to provide for private sector participation in transmission, and also provision relating to Transmission Utilities.
minimum return of 3% on fixed assets a statutory requirement (w.e.f 1.4.1985)

The Electricity Regulatory Commissions Act, 1998

Provision for setting up of Central / State Electricity Regulatory Commission to with powers to determine tariffs. Constitution of SERC optional for States. Distancing of Govt from tariff determination

Resultant Industry Structure

Existing Market Structure

GENERATION

GENCO

GENCO

GENCO

TRANSMISSION

TRADERS

TRANSMISSION

DISTRIBUTION

DISCOM

DISCOM

DISCOM

CUSTOM ER

CUSTOMER

CUSTOMER

Proposed Market Structure in Act 2003

Generation Transmission Generation

GENCO GENCO

GENCO GENCO

IPP

Open Access in

Open Access in
Transmission Transmission

Transmission

TRADERS TRADERS

DISCOM DISCOM Distribution Distribution

DISCOM DISCOM

DISCOM DISCOM

Open Access in Distribution

TRADERS TRADERS
Customer Customer

Customer Customer

Customer Customer

Need for the New Legislation.

Requirement of harmonizing and rationalizing the provisions in the existing laws to - Create competitive environment for benchmark competition which will result in enhancing quality and reliability of service to consumer. - distancing regulatory responsibilities of Govt. Reform legislation by several States separately. Obviating need for individual States to enact their own reform laws. Requirement of introducing newer concepts like power trading, Open Access, Appellate Tribunal etc. Special provision for the Rural areas.

Competitive Bidding

Liberal Framework

Competitive Environment

Trading

Private Investments

Open Access

Objectives of Electricity Act 2003

Delicenses Generation

Regulatory Commission / Appellate Tribunal Restructure Electricity Boards Controlling Theft of Electricity

Rural Distribution Delicenced

Industry Structure After Electricity Act 2003

Role of Government.
Central Government to prepare Electricity Policy and Tariff Policy. National

(Section 3) National Electricity Policy released in 2004 National Tariff Policy released in February 2006
1. 2. 3. 4. 5. 6. 7.

Competitive bidding in generation and transmission Standards of performance Multi-Year Tariff , adopted since April 1, 2006 Reduction of Cross Subsidy Time of Day metering Intrastate Availability Based Tariff Renewable Portfolio Standard

Rural Electrification
Govt. to endeavor to extend supply of electricity to all villages/hamlets. (Section 6) No requirement of licence if a person intends to generate and distribute power in rural area. (Section 14) Villages electrified as on 30th May 2006 439502 forming only 74% of total villages in the country. Rural Households having access to Electricity only 44%. Only five states Delhi, Goa, Haryana, Kerala and Punjab (all of them very small in size) have achieved 100% village electrification.

Generation
Generation free from licensing. Requirement of TEC for non-hydro generation done away with. Captive Generation is free from controls. Open access to Captive generating plants subject to availability of transmission facility. The total captive capacity is currently at least 32,000 MW and is growing handsomely, at a rate of 6% per year. Generation from Non-Conventional Sources / Co-generation to be promoted. Minimum percentage of purchase of power from renewables may be prescribed by Regulatory Commissions. 13 States have come up with RPS regulations.

Transmission
There would be Transmission Utility at the Centre and in the States to undertake planning & development of transmission system. The Load Despatch Centre/Transmission Utility / Transmission Licensee not to trade in power. Facilitating genuine competition between generators. Open access to the transmission lines to be provided to distribution licensees, generating companies. There are 12 unbundled Transcos, eight SEBs and two partially unbundled SEBs (with combined transmission and distribution functions)

Distribution
Distribution to be licensed by SERCs Retail Tariff to be determined by Regulatory commissions Metering made mandatory Currently, as per official figures, 96 % metering has been achieved at the feeder level and 92% at the consumer level. Open Access in distribution to be allowed by SERC in phases The act required the SERCs to frame guidelines for allowing access in distribution for consumers drawing more than 1 MW of power by 2009. Accordingly, So far 22 states have issued regulations for open access in distribution.

Consumer Protection.
Redressal forum for redressal of grievances of consumers, to be appointed by every distribution licensee within six months. Ombudsman scheme (Section 42 ) Today, most states have regulations in place for the CGRF and ombudsman- 22 have CGRFs for utilities and 22 have set up an ombudsman. Standards of performance (20 states) Failure to meet standards makes them liable to pay compensation to affected person within ninety days. Poor Publicity of these measure!

Trading and Market Development.

Trading distinct activity permitted with licensing (Section 12) Regulatory Commission may fix ceiling on trading margin to avoid artificial price volatility. (Section 79(1)(j) and 86(1)(j)) CERC has put a trading margin of 4 paise/kWh. Regulatory Commission to promote development of market including trading As on March 31,2008 an interregional power transfer capacity of 17000 MW was established by PGCIL. Two Power Exchange permitted by CERC The volume of power, traded in India of about 15 billion units, equivalent to 2 to 3% of electricity generation.

Regulatory Commissions and Appellate Tribunal

State Electricity Regulatory Commission to be constituted within six months and Provision for Joint Commission by more than one State/UT.So far, 27 states have constituted ERCs

Tariff Principles
Regulatory Commission to determine tariff
for supply of electricity by generating co. on long/medium term contracts. (Section 62) Open Access

Except in case of Competitive Bidding and Consumer

tariff should progressively reduce cross subsidies and move towards actual cost of supply. (Section 61 (g), (h)) to come around +/- 20% of average cost of supply by 2011-12

Tariff Policy stipulates cross subsidy level

Restructuring of SEBs
Provision for transfer scheme to create one or more companies from SEB. (Section 131) Provision for continuance of SEBs (Section 172) As on May 31,2006, 13 states have unbundled their SEBs into 16 Gencos, 13 Transcos and 37 Discoms while other states are expected to follow. Among the frontrunners were, Orissa in 1996, Haryana (1999), Andhra Pradesh (1999) and Karnataka (1999).

Perspectives
The one duty we owe to history is to rewrite it Oscar Wilde Laws and Institutions are constantly tending to Gravity. Like clocks they must be occasionally cleaned, wound up and set to the time Henry Ward Bucher

Thank You