A practical guide to power players

As explained by the authors, the power directory is the culmination of variousinsights and suggestions received by Ficci during its interface with the ministry, the state government, investors, and equipment suppliers. Because of Ficci8217;s reach, the book has provided a complete list of addresses and names of key persons involved in framing policies at both the central and state levels, along with addresses of all the equipment suppliers. The book targets not just investors. Institutions, banks, trade associations, college libraries, investors, and equipment suppliers will benefit from understanding the changes in the notification, and knowing the people to contact for a certain problem.

The book starts off at a macro level by giving a brief insight into the state-wise demand and shortages, and the short-term and long-term measures needed to cover them. The short-term strategies concentrate more on demand-side management, prioritising renovation and modernization, and encouraging captive power/cogenertaion power plants. These short-term measures are showing their effects. There hasbeen increased allocation in renovation and modernization, SEBs8217; plant-load factor has risen in the last four years, and the share of the captive/cogeneration plants is rising in most states.

The book makes the reader understand that today the government has to concentrate more on long-term strategies. In 1990-91, when the government first decided to open up power generation to private producers, the need of the hour was to set up many plants on liquid fuel, as those are short-gestation period projects and do not pose much enviourmental hazard. But being dependent on liquid fuels or captive generation will not ensure low international tariff to the end-user.

On a long-term basis, the government has no alternative but to go for mega power projects, and ensure higher allocation of power for IPPs from domestic FIs, capital markets, and ECB. Further, the government would also have to improve and enhance the low share of hydro power in the power produced. At present, hydro power generation has slipped to lessthan 26 per cent. If this ratio is improved, the peaking-shortage problem will be solved to a great extent. The long-term strategies include ensuring higher investment in coal and restructuring the Central Electricity Authority CEA.

The book gives a synopsis of the power policy of Gujrat, Harayana, Punjab, and UP. The topic discusses the objectives, approach and power-policy strategy in these states. It also gives the reader the idea of the progress of all the projects, which are under different stages of implementation. Apart from the detailed report of the progress of different power projects in these states, the book also gives a table of the projects which have been awarded techno-economic clearances by the CEA, along with addresses of the promoters.

The book also deals with the contentious issues of risk-returns to private players for investments in power generation. Today, most projects are being offered through the competitive-bidding process. The book describes both the stages of competitivebidding. The first stage is the request for qualification where the criteria has been fixed in the four principal areas8211;organization, financial capability, management capability, and technical capability8211;to qualify for subsequent request for proposal stage.

As per policies, the government shortlists three-four players for request for proposal RFP stage. The RFP8217;s design will take into cognizance all factors like engineering adequacies, acceptance of SEB operating requirements, pricing and clear identification of SEBs, the centre8217;s and bidders8217; responsibility. All this would be framed in an unambiguous manner to seek uniform information from the bidder.

Apart from the above guidelines, the book also talks about the government policies and initatives for private sector involvement in the R amp; M program, and also about the renewable energy program in India. Lastly the book has given a detailed document of the PPA agreement. Although the present bidding would be based on lowest tariff stated, the basis ofagreement would remain the same.