Accelerated Power Development and Reforms Programme

In this article we will discuss about Accelerated Power Development and Reforms Programme (APDRP). After reading this article you will learn about: 1. Introduction to Accelerated Power Development and Reforms Programme (APDRP) 2. Ultra-Mega Power Projects (UMPPs) 3. Plan Development of Hydro Potential 4. Merchant Power Projects and Private Sector Power Projects.

Introduction to Accelerated Power Development and Reforms Programme (APDRP):

The Government approved the Accelerated Power Development Reforms Programme (APDRP) which is intended for up-gradation of Sub-Transmission and Distribution in densely electrified zones in the urban and industrial areas and improvement in commercial viability of State Electricity Boards by reducing the aggregate technical and commercial (AT&C) losses to around 15 per cent as against the existing over 50 per cent.

This will ensure reliability and quality of power supply with adequate customer satisfaction.

The APDRP has two components:

(a) Investment component for strengthening and up-gradation of the sub-transmission and distribution system and

(b) Incentive component to encourage/motivate utilities to reduce cash losses.

A sum of Rs 40,000 crore was needed for the implementation of APDRP under the Tenth Five Year Plan. Out of which Rs 20,000 crore was sent on investment component and another Rs 20,000 crore was used to incentivize states for reducing their financial losses.

The Government had sanctioned projects amounting to Rs 14,749 crore covering 406 towns all over the country during the year 2002-03 and the Government has released Rs 1,755.51 crore under the investment component for Strengthening and upgradation of sub-transmission and distribution network.

An additional amount of Rs 379.27 crore was also released under incentive component to the State of Gujarat, Haryana and Maharashtra for reduction in net losses. The budgetary allocations for 2003-04 were Rs 3,500.00 crore.

The Ministry of Power is giving highest priority to the distribution reforms. As a result, 27 states have signed reforms related MOUs with Ministry of Power. Moreover, 27 Electricity Boards/utilities have signed Memorandum of Agreement with the Ministry of Power.

With a view to giving a fillip to State Governments, SEBs and utilities to take adequate steps towards reduction of transmission, distribution and commercial losses, the Government is implementing the Accelerated Power Development and Reform Programme (APDRP).

Funds are released as additional central plan assistance to State Electricity Boards and Utilities for upgradation and strengthening of the sub-transmission and distribution system with the objective of reducing Aggregate Technical and Commercial (AT&C) losses, improving quality of supply of power increasing revenue collection and improving consumer satisfaction.

APDRP is also an instrument to leverage distribution reforms in the States. The Government had allocated Rs 3,500 crore for APDRP in 2004-05.

Under the investment component, so far, 499 projects amounting to Rs 17,619 crore have been sanctioned in 29 states during the triennium ending in 2004-05. The disbursement for the year 2002-03 was Rs 1,755.51 crore and for 2003-04 was Rs 2,365.51 crore.

APDRP provides incentives for achievement of loss reduction to SEBs and so far six states have qualified and received the incentive payments worth Rs 955.58 crore against cash loss reduction of Rs 1,911.14 crore. In 2003-04, eleven SEBs including Andhra Pradesh and Gujarat were able to reduce losses by Rs 8,000 crore and then claimed incentives from the centre under APDRP.

Ultra-Mega Power Projects (UMPPs):

In order to solve the growing power crisis, the Minority of Power, Government of India has launched an initiative for developing coal-based Ultra-Mega Power Projects (UMPPs) in the country, each with a capacity of 4,000 MW or above. These projects will be awarded to developers on the basis of tariff-based competitive bidding.

In order to facilitate tie-ups of inputs and clearances, project specific shell companies have been set up have been set up as wholly owned subsidiaries of the Power Finance Corporation (PFC) Ltd. These companies will undertake preliminary studies and obtain necessary clearances including water, land, fuel, power selling tie-up etc. prior to award of the project to the successful bidder.

In the mean time, nine sites have been identified by CEA in nine states for the proposed UMPPs. These include four pithead sites, one each in Chhattisgarh, Jharkhand, Madhya Pradesh and Orissa and five coastal sites, one each in Andhra Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu.

It is proposed to set up pitched projects as integrated proposals with corresponding Captive Coal mines. These power projects are to be developed with a view to lower the cost of power to the ultimate consumers. These projects would be environment friendly as they are adopting super-critical technology.

In the mean time, the Ministry of Coal has allocated captive coal mining block(s) for Sasan UMPP in Madhya Pradesh, for Orissa UMPP (except for Chaturdhara block), for Tilaiya UMPP in Jharkhand and for Chhattisgarh UMPP. For the coastal projects, usage of imported coal is envisaged. The UMPP projects would help lower the cost of power to consumers and also reduce emissions.

Four UMPPs, namely Sasan in MP, Mundra in Gujarat, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand have already been awarded. These four projects have already been transferred to the identified developers and are at different stages of implementation. Five units of Mundra UMPP each of 800 MW have already been commissioned.

The fourth and fifth units achieved commercial operation in May and September 2013. Other awarded UMPPs are expected to come up in the Twelfth Plan except the last unit of the Titaliya UMPP, which is likely to come up in the Thirteenth Plan.

Thus, the Mundra UMPP has now become fully operational. Three units (3 x 660 MW) of Sasan UMPP have been commissioned by May, 2014. For Talaiya UMPP, land acquisition and preliminary works are now under progress.

Five units of 660 MW of Tilaiya UMPP are scheduled for commissioning during the Twelfth Plan and one unit of 660 MW in the Thirteenth Plan, Krishnapatnam UMPP in scheduled for commissioning during the Twelfth Plan. In addition to nine UMPPs originally identified, request has come from some of the state governments for installation of additional UMPPs in their states.

These projects are:

(i) Two additional UMPPs in Odisha,

(ii) Second UMPP in Gujarat;

(iii) Second UMPP in Andhra Pradesh;

(iv) Second UMPP in Jharkhand;

(v) Second UMPP in Tamil Nadu; and

(vi) One UMPP in Bihar.

New Sites for Ultra Mega Projects:

Central Electricity Authority (CEA) in association with PFCCL and state has identified new sites for Ultra Mega Power Projects:

(i) At Nyunipalli village in Prakashan district of Andhra Pradesh,

(ii) At Husainabad; Deoghar district in Jharkhand;

(iii) At Bijoypatna in Chandbali Tehsil of Bhadrak district in Odisha;

(iv) At Narla and Kasinga sub-division of Kalahandi district in Odisha, and

(v) At Kakwara in Banka district in Bihar.

Plan Development of Hydro Potential:

Hydro power potential in India is quite rich. India is endowed with an estimated hydro power potential of more than 1,50,000 MW. However, only 21.14 per cent of the potential has been developed till date and 9.53 per cent of the potential is now being developed.

The factors responsible for slow development of hydro power include difficult and inaccessible potential sites, difficulties in land acquisition, rehabilitation environmental and forest related issues, inter-state issues, geological surprises and long gestation periods.

Private sector participation is, therefore negligible but has been increasing in the recent past. There are 10 schemes with an installed capacity of 3,991 MW under construction while 67 schemes with an installed capacity of 18,030 MW have been allotted to private developers by states.

There are 45 hydro projects with an aggregate capacity of 15,000 MW under construction. Preparation of pre-feasibility reports of 162 schemes with aggregate installed capacity of 49,930 MW has been completed by CEA. Bulk of the potential which is in the Himalayan region—the hill states of Jammu and Kashmir, Himachal Pradesh, Uttarakhand and the North-East—is yet to be tapped.

In the mean time, a Task Force has been constituted for the development of hydro power under the chairmanship of Ministers of Power. It has Deputy Chairman, Planning Commission, Member (Power) Planning Commission and the Ministers of Power of various State Governments as its members. The Task Force shall examine and resolve issues relating to hydro power development.

Merchant Power Projects and Private Sector Power Projects:

The Ministry of Power has issued guidelines for the setting of Merchant Power Plants (MPPs) for which fuel tie-up would be facilitated. Unlike traditional facilities, Merchant Power Plants compete for customers and absorb full market risk. They are a market based response to the growing electricity demand.

There are no guarantees of minimum off-take. Merchant Power Plants fill different niches in the market; some provide steady supplies to the power grid, while others fire up to meet peak loads when the demand is at its highest.

Private Sector Power Projects:

In the power capacity addition programme, the government has given due emphasis on private sector power projects in recent years. The power sector witnessed investment commitments of at least Rs 1,00,000 crore by private power houses such as Reliance Energy and GMR Infrastructure.

While Reliance Energy Ltd has estimated that it would have to invest Rs 60,000 crore in next five years to add 15,000 MW capacity, the. GMR Group has targeted generation of nearly 12,000 MW capacity in the next 5-6 years at an investment of Rs 50,000 crore. These are in addition to the UMPPs.

Greenfield Power Projects thrown open under public-private-partnership mode by both Central and State Government, received stupendous response from firms such as Tata Power, Larsen and Toubro, Lanco Infra-tech, Torrent Power, Essar and Start-lite Industries.