Private Participation in the Indian Power Sector : Lessons from Two Decades of Experience.

Front Cover -- Title Page -- Copyright -- Contents -- Foreword -- Acknowledgments -- About the Author -- Abbreviations -- Overview -- Lessons Learned from Two Decades of Efforts to Attract Private Investment in the Power Sector -- General Observations and a View Ahead -- Notes -- References -- Chapter 1 Introduction to Private Sector Participation in the Indian Power Sector -- The Prereform Period: From Independence to 1991 -- Phase 1 (1991-95): The Opening of the Sector to Private Investment in Generation-Independent Power Producer Policy -- Phase 2 (1996-2003): Restructuring of SEBs, Introduction of Sector Regulators, and Initial Attempts at Privatization in Orissa and Delhi -- Phase 3 (2003-12): Enactment of the Electricity Act and Subsequent Policy Initiatives to Introduce Competition and Create a Market in Generation, Transmission, and Distribution -- Phase 4: Investor Uncertainty at the Start of the 12th Five-Year Plan -- Private Participation in Generation, Transmission, and Distribution -- Notes -- Reference -- Chapter 2 Private Sector Participation in Thermal Generation -- Key Messages -- Importance of Power Generation -- Placing the Indian Power Sector in an International Context -- Growth of Private Sector Participation in Power Generation in India -- Independent Power Projects Policy of the Early 1990s -- Key Issues in Implementation of the IPP Policy -- Intermediate Policy Initiatives for Private Sector Participation in Generation -- Post-Electricity Act of 2003: Tariff-Based Competitive Bidding -- Response of the Private Sector to Case 1 and Case 2 Procurement through Competitive Bidding -- Comparison of Case 1 and Case 2 Bids with Noncompetitively Awarded (by Memorandum of Understanding) Projects -- Prospects for Future Private Participation in Power Generation: What Is Holding Back Private Investors?.

The Coal Crunch and Choices Facing Policy Makers -- Logistical Difficulties with Physical Pooling of Imported and Domestic Coal -- Notes -- References -- Chapter 3 Private Sector Participation in Transmission -- Key Messages -- Chronology of Private Sector Participation in Transmission -- Legal Framework for Transmission Business -- Private Participation Experiences -- Current Models for Private Participation -- Chapter 4 Private Sector Participation in Distribution -- Key Messages -- Distribution Performance and Chronology of Private Sector Participation in Distribution -- Comparative Highlights of the Privatization Experience of Orissa and Delhi -- DF Models -- Review of Rural Franchisee Experiences -- Review of Urban Franchisee Experiences -- Lessons Learned for Improvement of the DF Approach: What Are the Key Variables That Must Be Properly Understood and Addressed in the Bid Process? -- Notes -- References -- Chapter 5 Private Sector Participation in the Indian Solar Energy Sector -- Key Messages -- Progress to Date -- Potential Bottlenecks to Meeting Commissioning Schedule Deadlines -- Note -- References -- Chapter 6 Financing of the Power Sector -- Key Messages -- Distribution Sector Losses and Their Effects -- Macroeconomic Outlook -- Central Government Approach -- Recommended Holistic Approach -- Reference -- Chapter 7 Emerging Issues and Proposed Approaches for the Indian Power Sector -- Emerging Issue: The Need for Better Partnership Mechanisms with the Private Sector -- Final Thought -- Note -- Chapter 8 Update -- Review of Progress on Selection of DFs -- Issuance of SBDs for the Appointment of DFs -- Finalization of Key Terms of the Public-Private Partnership Model for Distribution -- Impending Segregation of Wheeling and Supply License(s) -- Review of Progress on Generation PPP -- Review of Progress on Transmission PPP -- Notes.

Reference -- Appendix A Organization of the Power Sector in India -- Appendix B Dabhol-Enron: The First Lesson Learned under the New Independent Power Producer Policy -- Appendix C Summary Case Studies of Distribution Privatization -- Highlights of the Orissa Reform Experience -- Highlights of the Delhi Distribution Privatization Experience -- Appendix D Post-2012 Generation and Uncertainties Related to Domestic and Imported Fuel Supply -- Domestic Coal-Related Uncertainties -- Imported Coal Uncertainties -- Improvement in CERC Indexation -- Note -- Appendix E Emerging Challenges for Private Investment in Transmission -- Issues and Challenges for Private Transmission Line Developers -- Experience in Private Projects Being Implemented versus the Transmission Framework -- The Way Forward -- Appendix F Comparison of Privatization to the Distribution Franchisee Approach -- Privatization versus Distribution Franchisee -- Appendix G Recommendations for the Way Forward on Distribution Franchisee Selection -- Appendix H Standardization of the Distribution Franchise Process -- Post-award Contract Management -- Note -- Boxes -- Figures -- Tables -- Back Cover.

The state of the Indian power sector today is an acknowledged constraint to the country’s growth aspirations. This book examines the home-grown Indian experience with private sector participation in power, identifies emerging risks, and proposes specific actions for government consideration, so that the power sector may fulfill its important role in India’s growth story. Seeking financing, efficiency, and project management skills from the private sector to complement public sector efforts, the state governments and the central government have invited private participation in power for the past two decades. They have followed a continuously evolving process starting with the independent power producer policy of the early 1990s, which sought only to attract new investment in generation. Despite these efforts, the rate of growth in energy supply has not kept pace with the growth in demand. Much more private sector investment and engagement in the sector is likely to be required to complement the government’s own efforts to improve supply, quality, and reliability of power. The passage of the Electricity Act of 2003 was a signature achievement, moving the sector away from the previous route of negotiated Memoranda of Understanding with investors to a market-driven approach that forced potential investors to compete aggressively for generation, and later also transmission, contracts. Removal of generation licensing requirements and the introduction of competition under the Electricity Act elicited a significant private sector response in generation, a limited but respectable response in transmission (few transmission lines were tendered in the first place), and a varied but limited response in distribution. The quality of baseline data provided to the distribution franchisee about the state of the network and the customer base is a perennial problem.

Lessons learned about methods for successful distribution franchising, including specified loss reduction trajectories, are gradually finding their way into standardized bidding documents. Different qualification requirements for bidders are emerging for different locations. In the future, franchisees may also need greater independent access to power supply for their service areas, for example, by combining generation and distribution through private players.

Description based on publisher supplied metadata and other sources.

Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2024. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.