Questionnaire

Introduction The Indian Power Sector is going through tremendous changes and reforms over the last 15 years. Power is in the concurrent list of our Indian constitution which means it falls under the purview of both state and central governments. The recent Electricity Act !!" has been introduced which replaces all the earlier " Acts of 1#1!$ 1#%& and 1#5'. The demand for power is growing each day and fuel prices are also see(sawing in the international mar)et. The aim of this *uestionnaire is to identify the areas which need improvement and to analy+e whether there is any scope of doing things differently. ,-ame and .ompany anonymity will be maintained if re*uested./ Name of Respondent: Age of the respondent: Years of experience: ___ yrs (Public $esignation: %ompany: r& No& 1. A Question 0eneration 1e have ade*uate generation facility in the country Yes No Remar's ector!" ____ yrs (Pri#ate ector!

The purpose of this *uestion is defeated as it is well )nown fact and is established from various data as well as day to day e2perience 5bviously$ this is the ma4or problem for a power tariff$ as it )eeps increasing with escalation due to national and international factors$ li)e demand(supply imbalance$ etc. This is a needless statement as all companies involved in energy intensive industries$ li)e metallurgical$ .ement$ manufacturing industries prefer self generation i/ due to erratic *uality of supply ,i.e. inconsistent

.ost of fuel is a ma4or concern for generation companies.

.aptive power plants are built by manufacturing plants because the *uality and continuity of supply is poor

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r& No& supply with several power cuts$ poor *uality of power supply ,i.e. voltage 9 fre*uency$ etc./ and .ost of delivered Power at receiving points of those industries. The above non( reliability coupled with advantages of captive generation being there is no T98 losses due to grid power which is built into the tariff delivered by the utility to the Industry. This T98 is almost absent in case of captive generation ad4acent to as consumer is located All 4ust other captive generation. Question Yes No Remar's

advantages are common sense$ which need 8 E E*uity participation is a must for the foreign EP. partner in any power plant to protect the interest of the state Smaller plants should be built in more numbers instead of mega pro4ects not be elaborated. This is not always true. This was the case in few instances$ but it is not at all true now. This is totally dependent on financial strength of available promoters$ techno(commercial and economics point of view$ etc. In any case$ in a connected grid power bigger the power plant ;uch better it is or simply no because and of / 8uties important reasons: 1/ Scale of economy 9 reduced Ta2es

available for ;ega Pro4ects as per present 0ovt. guidelines. 5therwise$ cost of delivered power is higher in case of smaller plants. The Ipshita 3asu. 6egistration -o. 1&&1. South 0u4arat 7niversity$ Surat. 6esearch 0uide. 8r. 6enu)a 0arg$ S07$ Surat.

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r& No& 8uty concessions in case of ;ega Pro4ect ,definition is multi(state and above 1!!! ;1 for Thermal and 5!! ;1 for <ydro/ pro4ect rate of .ustoms duty which is about @ There is gap between our demand and supply of power .5=&> for non(mega pro4ects$ will be -I?. Is it re*uired to reply to this leading *uestionA ;ay be different probing *uestion could be as)ed. . A Transmission 5ur national grid networ) is outdated and needs ma4or 69; Transmission lines can live upto "5 years if not more. -ational grid was virtually non( e2istent till formation of Power 0rid .orporation of India ?imited. In =!Bs the States started connecting each other with synchronous mode for transfer of surplus power from one State to other. This had capacity bottlenec)s as well as grid instability in two operation as when two states were connected either directly or by radial mode$ asynchronous States gets connected which were operating at different fre*uency and voltage levels$ further *uality of loads also differed depending of e2tent of industriali+ation$ li)e different capacitance and reactance loads. Ipshita 3asu. 6egistration -o. 1&&1. South 0u4arat 7niversity$ Surat. 6esearch 0uide. 8r. 6enu)a 0arg$ S07$ Surat. " Question Yes No Remar's

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r& No& 3 The grid is solely responsible for the poor *uality and continuity of power 0rid is a simple electrical circuit$ e*uipments$ generating stations. 0rid by itself cannot always be responsible for poor *uality and continuity of power supply. I can say &!> is the human problem$ miss management$ theft$ pilferage$ lac) of training$ lac) of )nowledge$ lac) of commitment$ ridiculous pay pac)age and <6 management policies$ no incentives$ no standardi+ations$ practices$ etc. 5ther -o redundancy because of in the !> could be because of less capacity in the grid. bul)(power supply stress on building arrangement. ?ess investment in this sector e2cessive additional generation capacity rather than solving grid management$ commercial and political electricity issues. sale ;a4or is itBs problem about instantaneous Question Yes No Remar's

perishability. Similar pipeline grid for petro( products and crude oil wor)s very well$ as these are physical measurable and verifiable *uantity . Privati+ation of the grid will not be beneficial for the socialistic approach of our country Ipshita 3asu. 6egistration -o. 1&&1. South 0u4arat 7niversity$ Surat. 6esearch 0uide. 8r. 6enu)a 0arg$ S07$ Surat. % and is transacted as cash. In electrical industry it is not possible. Privati+ation per se is a ;yth. If 0ovt. cannot improve the efficiency of the 0ovt. owned

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r& No& utilities$ then by mere privati+ation will not solve the problem. If there is a fund constraints$ private players must be allowed. ?et the mar)et decide what is the price of the electricity delivered at a time$ day or season of the year. It is highly debatable whether privati+ation is good or bad but India is no more a pure socialistic country either. Even in public sector li)e -TP.$ P51E606I8$ though there is huge amount of capacity e2pansion is being underta)en$ their manpower does not increase commensurately. In fact$ e.g. these PS7s try to show to their respective ;inistries$ how they are reducing Asset to ;anpower ratio$ or how they are increasing investment per employee or profit per employee. Also on the other side$ these companies try to build big plants under total less turn)ey number contract$ of people thereby reducing Question Yes No Remar's

internally. Also$ they are giving management contracts for various 59;Bs matters in plant. ". A 8istribution .ompetition is ade*uate in the 8istribution circles This has not developed as yet. 3i(furcation or tri(furcation of monolithic SE3s in States are ta)ing place. 8IS.5;s are being created by it Ipshita 3asu. 6egistration -o. 1&&1. South 0u4arat 7niversity$ Surat. 6esearch 0uide. 8r. 6enu)a 0arg$ S07$ Surat. 5

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r& No& is still being managed same way only accounts and management head remains different. 5ld wine in new bottle. So competition is not there. Anyway$ what is competition in this 3 .aptive Power Plant owners should be allowed to sell power at their own rate based on negotiation with their respective SE6. case of natural monopolyA SE6.Bs should not po)e their nose. ;ore nos. of such controls are introduced in the mar)et with more responsibility$ decision will be always sub(optimal. ?et the mar)et decide. ?et SE6. only operate in case of unfair trade practices as a mar)et regulator. ?ot of Industries have good amount of money and this can be tapped by incentivising investment of these industries in captive power plant and building e2cess merchant capacity to sell to grid. Trading companies should be allowed to arrange buyer and seller in this mar)et and rate of power should be completely bi(lateral ,in case of two parties/ or mar)et based. . 8 Tariffs are negatively s)ewed in India for certain segment The new -ational Tariff Policy is ade*uate for the current scenario 1hat is the meaning of negatively s)ewedA -ot fully agreeable though the intent is good but it is silent about how so much money is going to come to this mar)et. All financial institutions and ban)s have their prudential Ipshita 3asu. 6egistration -o. 1&&1. South 0u4arat 7niversity$ Surat. 6esearch 0uide. 8r. 6enu)a 0arg$ S07$ Surat. ' Question Yes No Remar's

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r& No& norm in India as per 63I. They cannot lend huge amount of money in this sector. @urther$ latest guidelines based on tariff based bidding does not provide for @56EC variation as a pass through. As a result$ how @oreign lender will lend and how @oreign e*uity will come to this countryA They ,;inistry/ said you hedge the @56EC variation. Are we trying to create a new capital mar)et which had never e2isted in this country and at one stro)e you create a mar)et for hedging funds for 15( 5 yearsA Internationally also hedging for such a huge money for such a long period is unheard off. 1ho will thin) about thisA Are we saying no no to @oreign investments indirectlyA 1hat is the type of signal we are trying to give the international E State governments should control distribution companies lending and investing communityA -o govt. either State or .entral should control 8IS.5;S. It should be independent and the T6A-S.5 should be 4ointly held company of all 8IS.5;S of the State. The whole structure @ Prepaid power will ensure better revenue collection = should be monitored by SE6.s. -o doubt in this. Also not delivering Question Yes No Remar's

committed power should be penali+ed as well. Ipshita 3asu. 6egistration -o. 1&&1. South 0u4arat 7niversity$ Surat. 6esearch 0uide. 8r. 6enu)a 0arg$ S07$ Surat.

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r& No& %. A Question State of SE3 5nly 7nbundling of SE3s will prove beneficial Yes No Remar's

-ot necessarily but it may help on a case to case basis as investment in each sub(sector becomes focused and more professionalism may thrive. 8efinitely yes. -ot always true. ;ostly yes. -ot necessarily. (

3 . 8 E @

5nly .orporati+ation of SE3s will prove beneficial 5nly Privati+ation of SE3s will prove beneficial 5nly 7nbundling and .orporati+ation of SE3s will prove beneficial 5nly 7nbundling and Privati+ation of SE3s will prove beneficial -one of the above. If Des$ then please specify your remedy below

5. A 3 .

Private Sector Investment The entire power sector should be privati+ed in order to ma)e it viable and efficient Pro4ects should involve 5!(5! participation of both private and public sector in order to protect the rights of the end(consumers Private sector should be allowed to play a role in the regulatory body of the sector in order to enhance confidence of the private players and initiate more investments The role of the regulatory authorities should be made transparent to enhance private participation

-ot at all advisable. It is irrelevant. As it depends on case to case basis. 5ff(course.

.an it be made transparent with the same old people and bureaucrats 4oining this commission. Same mindset$ same people$ same e2posure no business li)e mind and no nation building mind. .an they performA 5bviously yes. 3ut can there be any solution as political parties need this sector for funding &

Power sector tariffs and policies should not be affected by the change in government at the state or center level to protect participants from

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Questionnaire
r& No& adverse political conditions @ Private sector should be allowed more sta)es in hydro(power generation their party and they have to po)e their nose always without fail. This is true but e2cept one ,li)e Eai Pra)ash/ other private players are non(e2istent. This is because there is no comprehensive policy to ta)e care of the 0eological surprises and delay of pro4ect in <ydro sector. <ow to incorporate this e2tra cost and challenge amicably to 0 < Smaller plants by private sectors will be easier to erect and remain financially viable 6evenue assurance for investments alone can ramp(up private sector investments encourage private companies is a challenge. This is not always true. The statement is absolutely true. 3ut today$ increasingly this assurance is ta)en away. 0oI has solved the huge 1!( !) crore bills receivables of SE3s by allowing them a one time raising of e*uivalent bonds. 3ut it is an adhoc measure. less The same people$ with same direction management political Question Yes No Remar's

influence$ etc. can the credibility perception be increased among lenders and investorsA '. A Politics and Power Sector 0overnment should ta)e more initiative in the development of the sector 3 Political parties should be unified in order to facilitate growth in the sector Ipshita 3asu. 6egistration -o. 1&&1. South 0u4arat 7niversity$ Surat. 6esearch 0uide. 8r. 6enu)a 0arg$ S07$ Surat. # 0ovt is only ma)ing initiative but most of the times wrong initiatives$ with )ind of *uic) solution$ etc. Every one is unified in this matter. All tal)s and no performance.

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r& No& . 8 E @ Is there unnecessary political interference in reformsA SE6.$ .E6. positions are mere post(retirement cushy positions with limited accountability Political parties should be allowed to interfere with the tariff structure and allocation of free power There should be closer interaction between the .oal and the Power ministries since they both are complementing each other. ,A ma4or part 0 < I =. A of our generation is through .oal(based plants/ SE6.$ .E6. members should be selected only if they have <ow do you define thisA 1hy it is not selecting from private companies as wellA ;any a times clash possibly happened. -ot possible as Electricity is a concurrent sub4ect. Des and -o. This is there is all States in 7SA as well. This is also practiced well in other countries successfully. 3ut in India$ may be it is better to centrali+e whole thing$ 4ust for a 3 . 8 E If your answer is yes to the above *uestion then should the constitution be amendedA If your answer is yes to the above *uestion then whether power should be in which list F State or .entreA Electricity Act !!" is a positive step in the development of the sector Is opening up of the generation segment ade*uate for the resolving the maladies of the sectorA change. Des. .entre. To certain e2tent yes. @irst$ it should have started from bottom of the rung$ that is reform in 8istribution sector$ investment Ipshita 3asu. 6egistration -o. 1&&1. South 0u4arat 7niversity$ Surat. 6esearch 0uide. 8r. 6enu)a 0arg$ S07$ Surat. 1! in 8istribution sector$ then Transmission and 0eneration. In India$ ithe Every time. Des you are. -ot at all. Des off course. Question Yes No Remar's

benchmar)ed *ualification to manage the sector and address its issues SE6. and .E6. are cutting through each others activities .E6. alone is enough for regulating the power sector in the whole country .onstitutional Power The power sector of India belongs to the .oncurrent ?ist ,under the purview of both State and .entral government/. 8oes it act as a deterrent to the development of the sectorA

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r& No& @ 0 &. A 3 . 8 Political interference in the power sector should be constitutionally banned Provisions in the Electricity Act !!" help overcome all lacunas of the approach was totally reversed. <ow will you do itA To certain e2tent yes and much more can be done. <owA 8efinitely yes. Des. All technologies are not possible to be Question Yes No Remar's

previous three Acts. Technology .limate plays an important role in the selection of technology ,gasG coalG hydroG wind etc/ Availability of fuel is a ma4or concern while deciding upon adopting a specific technology 1e need enhancement in the transmission and distribution technology to reduce thefts and losses 8evelopment of indigenous technology will bring down cost of setting up a power plant significantly

developed indigenously. @urther$ in India only 3<E? is there others in generation sector is absent. 3<E? e2cept for thermal ,coal/ upto 5!! ;1 unit si+e$ is a mere fabricator. The essence of investment in 698 and collating information world wide by well laid networ)s is absent. So they cannot develop technology. This is a general comment and obviously all will agree$ what is there to disagree.

All types of power generation technologies should be applied across the country in order to tap the potential to generate power from both renewable and non(renewable sources of energy. 6eforms Is the level of reform ade*uate in IndiaA Should the reforms focus on generation$ transmission and distribution simultaneouslyA If -o then what is the preferred se*uence of reformsA 1. . ".

#. A 3

-ot at all. Des

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11

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r& No& . 8 Shortage of power in India is due to inade*uate generation facility Shortage of power in India is due to inade*uate transmission facility Des -ot always. 3ut most of the lin)ed times with Question Yes No Remar's

Transmission

schemes

are

generation capacity additions and now few times grid strengthening and inter(regional lin)s$ high capacity transmission corridors are being envisaged. @inally$ how these schemes will materiali+e without a generation lin)A 1ho will payA The viability of such schemes had E @ Shortage of power in India is due to inade*uate distribution facility 6eforms are re*uired in the basic structure of the sector always been a problem in our country. -ot always. Des.

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