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Republic of India is a Neighbour of China • 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. It has several Overcome them. We mention here. • • • • GDP Low Rate of Growth Food Crisis Foreign Exchange Crisis Emerging Energy Crisis GDP Price ASCI Presentation Food Crisis ASCI Presentation Foreign Exchange ASCI Presentation 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 ? 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. Coal Sector Modernization Modernization Efforts So far • India Third largest producer of coal 400 mt/yr. China 1st – 2000 mt/yr. USA 2nd 100 mt/yr. • Deposits are: 8.6 % of the world, China 12 %, USA 25 %. • Mining Coal began in India in 1774 for steam trains. • On date independence around 50 mt/year from over 3000 mines, mostly private. • 1971-73, all coal mines were nationalised and consolidated. • From 1975, coal for railways got reduced to near zero today. But coal for power generation increased. Coal Sector 3/3 • Only two major public sector Coal India Limited (CIL) and Singareni Colliery Company Limited. (SCCL) • Production in 2003-04 is around 400 tonnes • Projected demand in 2029-30 in 1242 (Low Coal Scenario) 1812 (High Coal Scenario). OIL SECTOR1/4 • In Pre-independence days oil was extracted very small quantities in Assam by British owned oil companies. • In 1955, Oil & Natural Gas Commission was established by Legislative sanction. • With mainly USSR assistance oil exploration was done on shore and offshore. Oil Sector 2/4 • In early Seventies, Bombay High off-shore discovery increased crude production to over 30 mt/yr. • From 1990, India adopted a liberalised economic policy & private companies were given exploration and development leases under NELP. • Production of oil has stagnated around 30 mt/yr. • Production of Gas has increased as shown in table. Oil Sector 3/4 • Oil production were imported and marketed by private oil companies, Burma Shell, Caltex etc. • Indian Oil Company was established in 1959, to import crude and refine it to products. This has expanded its capacity to about 55 million tonnes throughput • Private oil companies were nationalized I 1976 but continued as separate companies to provide a competitive market. Oil Sector 4/4 • Private agencies can establish refineries and the one fully private refinery is the largest single unit refinery with 20 million tonnes throughput.