Experiences and Learnings from Power Market Development in South Asia: Power Trading and Power Exchanges Rajiv Ratna Panda SARI/EI/IRADe HAPUA-ASEAN-UNESCAP Workshop on ASEAN Electricity Exchange (AEE): An International Perspective 17-19 April, 2017Hotel JS Luwansa, Jakarta, Indonesia 1 Confidential©2017 Contents  South Asia: A Snapshot Power Market Structure in South Asian Countries (SACs)  Indian Power Sector  Power Sector Evolution and Power Trading Development in India  Indian Power Market  Power Exchange Evolution in India- Key features  Power Exchange Products in India  Regulation of Power Exchange in India  Contribution of power exchanges  Key Lessons :Power Market and Exchange Development in India  Development of South Asia Regional Regional Power exchange  Way forward 2 Confidential©2017 South Asia Remains World's Fastest Growing Region. Economic Growth (EG) expected to accelerate to 7.3 percent in 2017 from 7.1 percent in 2016. Home to 1/5 th of world’s population. India is the largest economy in the region and geographically centrally located. Most of the countries are facing power shortages. Demand growth to remain robust due to high EG. Total electricity demand in the region projected to grow at an average rate of *5.2% annually from 2013-2040 period South Asia Economic Focus Spring 2016 -Fading Tailwinds-World Bank Current Installed capacity is around 363 GW; (India 315 GW) Required installed capacity by 2040 is *1067 GW Afghanistan Pakistan Cross Border Electricity Trade (CBET) : India, Bhutan is the net India Nepal Bhutan Bhutan-India-1410MW Bangladesh exporter and Bangladesh, Nepal net importer of electricity Bangladesh-India-600MW Total CBET Nepal-India-350 MW Per capita energy consumption (517 KWh/Capita) is one of in SA India-Myanmar-3 MW the lowest in the world ( World average 2803) 2363 MW Huge Hydro Potential of SA region:350 GW (54 GW) Complementarities in SA countries:, Huge untapped hydro potential , Demand and resource complementarities The Maldives Sri Lanka 3 •http://documents.worldbank.org/curated/en/846141468001468272/pdf/WPS7341.pdf •http://www.worldbank.org/en/news/press -release/2016/04/09/south-asia-fastest-growing-region-world-vigilant-fading-tailwinds South Asia, only 15% of Hydro resources has been developed. Nepal and Bhutan have developed 1% and 5% of their potential. Ind ia 29% of their p o t e n Ctiaol.n f idential©2017 Power Market Structure in South Asian Coun tries 4 Confidential©2017 Power Market Structure in South Asian Countries System Power Trading/Market Country Policy Regulation Generation Transmission Operation Structure Ministry of Energy Electricity Regulatory Afghanistan DABS DABS DABS Single Buyer (SB), DABS and Water (MEW) Authority 363 GW Ministry of Power, Bangladesh Energy BPDB, EGCB, APSCL, Bangladesh Single Buyer, BPDB, Multiple Energy and Mineral Regulatory NWPGC, IPPs, SIPPs, PGCB PGCB 15 GW Resources Commission Rental Plants Seller (MS) Ministry of Bhutan Bhutan Electricity Druk Green Power Bhutan Power Economic Affairs BPC (NLDC) Export Licensee , SB Model 1.6 GW Authority (BEA) Corporation (DGPC) Corporation (BPC) (MEA) Vertically Partially Multiple Buyer and MS Un- Central: Ministry of Central: Central: Model Central: Inter-state Integrate un- bundled Power under GoI, Central: NTPC, POWERGRID POSOCO d bundled Licensees; State: Discoms State: Central: CERC,State: NHPC, NPCIL, UMPPs, (CTU), Private/JV India (NLDC & 5 Power/Energy SERCs/ IPPs, MPPs Licensees / Trade Cos (Include State 315 GW Department under JERCs State: State-owned State: STUs, RLDCs) Holding Cos) / Intra-state Afghanistan the State GenCos, IPPs, CPPs Private/JV State: (DABS) Bangladesh Government Licensees SLDCs Licensees, Power Maldives (Separate India Exchange Platform (FENAKA) Trans.Utility) (Separate Nepal Ministry of Energy Electricity Tariff Nepal Electricity SB Model –NEA, Multiple Nepal (NEA) Bhutan G,T,D .8 GW (MoE) Fixation ( ECToFmC)m ission Authority (NEA),IPPs NEA NEA Seller (MS) Sri Lanka (Separate utilities) State-owned generating (CEB) Gen.utility) Pakistan National Pakistan Ministry of Water National Electric companies formed after Transmission & SB Model , CPPA, Multiple (Separate and Power Power Regulatory restructuring of WAPDA NTDC 24 GW (MOWP) Authority (NEPRA) (CPGCL, JPCL, LPGCL, Despatch Seller (MS) G,T,D Company (NTDC) utilities)) NPGCL) & other IPPs Public Utilities CEB Sri Lanka Ministry of Power Ceylon Electricity Board CEB Transmission SB Model, Multiple Seller Commission of Sri Transmission 4 GW and Energy (MOPE) Lanka (PUCSL) (CEB), IPPs Licensees Licensees (MS) 5 Except India most of SA countries have SB Model. Power Trading/Power exchange Platform Exist in India only Confidential©2017 Indian Power Sector 6 Power Sector in India – Profile Snapshot  Installed capacity in India- 319 GW (March 2017), 3rd largest Installed Capacity (GW) producer* & 4th largest consumer of electricity in the world 3.5 0 298 319 300 244 272 250 200 223  Installed Capacity profile (Feb-2017): 200 159 174 150 • Coal: 59.9% , Gas: 8.0%, Diesel: 0.3%, 1 050 84 94 112 130 145 165 185 189 - • Nuclear: 1.8% Hydro: 14.1%, RE: 15.9% 2010 2011 2012 2013 2014 2015 2016 2017 (Feb-17)  The Per capita energy consumption-1,074 kWh (2015-16) C o a l G a s D i e s e l N u c le a r H y d r o Renewable 4333 still less than half of the world average Renewable Energy capacity growth in India 7856 9012 • The share of Renewable Energy in India’s generation 3252 capacity portfolio has progressively increased reaching 50 3408510 28700 GW as on march, 2017 17197 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 Wind Solar Bio- Mass WtE SHP • RE capacity has grown at CAGR of 21% over last five years 700000 Village Electrified -92% 12000000 600000 10000000 500000 8000000 • Wind energy accounts for about 57 % of installed RE 400000 6000000 300000 capacity, followed by solar with 18% share in the RE mix 200000 4000000 100000 2000000 0 0 • The overall potential for renewable energy in the country is Installed Capacity No.of villages electrified Length of T&D Lines (Ckt. km7 s.)(#) estimated to be about 1095 GW (as on March 2016) *https://www.ibef.org/download/Power-March-2017.pdf( MW) Source: CEA Report Note : 92 % based on Total village in India is 64086 7 Confidential©2017 Capacity (MW) India-Demand-Supply Scenario The demand-supply deficit has progressively reduced over the last five years. For the First time India is expected to be power surplus in 2017 Demand-Supply Peak Deficit Energy Deficit (Million (MW) Units) 13,252 2.6% 4,250 1.10% FY11 FY12 FY13 FY14 FY15 FY16 FY 17 -4.5% -4.7% -3.2% -4.23% -3.57% -2.10% FY11 FY12 FY13 FY14 FY15 FY16 FY 17 -8.50% (23,557) -9.8% -9.0% -8.46% -8.71% -10.6% (4,903) (38,143) (6,103) (42,428) (7,006) (12,031) (12,159) (13,815) (73,236) (79,313) (86,905) Source: CEA Report Peak Deficit [MW] Deficit [%] Deficit [MU] Deficit [%] 8 Confidential©2017 MW MU Decades back, story was very different Installed Capacity and Per Capita Energy and Peak Deficits -India 140 Installed Capacity : State, Center and 25 350 Consumption 1075 1200 120 Private Sector 124 300 957 1010 10002 0 100 104 250 884 914 800 15 80 85 200 672 69 600 559 60 150 465 10 54 400 100 329 40 35 50 172 200 5 20 21 23 29 74 10 11 11 12 14 14 17 0 0 0 0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Installed Capacity-State Installed Capacity-Center Installed Capacity (GW) Installed Capacity-Private Data Source: CEA-Report on Growth of Electricity, other database of CEA Per Capita Consumption (kWh/Capita) Energy Deficit-% Peak Deficit--% Low Per Capita: In 1990 per capita was only around 172 Share of Private Sector -2001 Share of Private Sector -2016 KWH/Capita , by 2016 -1075 KWH/Capita . IC 64 GW in 1990 to 350 GW in 2016 Installed 10 % Capacity 34% -State High Deficits: In 1997 Energy and peak deficits were 11.51% 43% Installed and 17.97% respectively, by 2016 reduced to 2.1% & 3.2 % only 27% Capacity -Center 63% Installed Limited Private Sector (PS) : Share of PS -10% in 2001 to 41 % Capacity 25% 2016 -Private 9 Data Source: CEA-Report on Growth of Electricity, other database of CEA GW Percentage Deficits GW How all this wa s achieved ? 10 Confidential©2017