India Infrastructure Research identified 539 major power projects (investment of over Rs 10 billion for each project) aggregating an investment of almost Rs 35.4 trillion in the country. This comprises Rs 32.6 trillion invested in 456 generation projects and Rs 2.8 trillion in 83 transmission projects. The generation projects being considered add over 532 GW to the installed capacity, while transmission projects add about 115,443 ckt. km to line length.
Of the total investment value, about 53 per cent is accounted for by projects which are proposed for development by public and private sector players; 29 per cent by projects under construction; about 10 per cent by projects completed since January 2014; and about 4 per cent each in projects awarded through competitive bidding and by those currently under competitive bidding.
Key completed projects
Since January 2014, 69 major power projects at an aggregate investment of Rs 3.4 trillion have been completed. This comprises Rs 2,375 billion invested in 38 thermal power projects (TPPs), Rs 707 billion in 21 transmission projects, Rs 274 billion in nine hydropower projects (HPPs), and Rs 86 billion in one nuclear power project (NPP). The generation projects have added 44.67 GW of installed capacity, while the transmission projects have added 27,760 ckt. km.
Most of these are greenfield projects, and only 13 projects with an investment of Rs 620 billion are expansion projects. In terms of ownership, private companies account for 48 per cent of the investments in completed projects and PSUs account for 46 per cent. The remaining 6 per cent investment has been made by public-private partnerships (PPPs).
Private sector players are responsible for the completion of some of the largest power projects. These include the 3,960 MW Sasan Ultra Mega Power Project (UMPP) constructed by Reliance Power Limited at an investment of Rs 270 billion, the 3,300 MW Tiroda Power Project by Adani Power Limited at Rs 198 billion and the 2,400 MW Tamnar II Super Thermal Power Project (STPP) by Jindal Power Limited at Rs 134 billion. In transmission, the largest project completed was the 3,556 ckt. km long Bina-Vadodara Transmission System Project by Power Grid Corporation of India Limited (Powergrid) at a massive investment of Rs 115 billion.
Key under-implementation projects
According to India Infrastructure Research, 178 major power projects are under implementation at an investment of Rs 10.2 trillion. These projects will add 140.3 GW to generation capacity and 58,991 ckt. km to transmission line length. Segment-wise, 115 TPPs are being constructed at an investment of Rs 7,918 billion, 41 transmission projects at Rs 1,343 billion, 19 HPPs at Rs 624 billion and three NPPs at Rs 324 billion.
In terms of ownership, PSUs account for 53 per cent of the investments in projects under development, the private sector accounts for 44 per cent and PPPs for 3 per cent. The projects under implementation include 144 greenfield and 34 brownfield projects, aggregating an investment of Rs 8,193 billion and Rs 2,015 billion respectively. Of the total, 31 projects under implementation aggregating Rs 1,550 billion in investments are currently stalled due to various issues.
The key big-ticket coal-based TPPs under construction include the 3,960 MW Chitrangi TPP in Madhya Pradesh, the 3,600 MW Akaltara TPP in Chhattisgarh and the 2,400 MW Kudgi STPP in Karnataka. In the hydro segment, large projects under construction include the 1,200 MW Teesta Stage III HPP in Sikkim and the 800 MW Parbati HPP Stage II in Himachal Pradesh. The Nuclear Power Corporation of India Limited (NPCIL) is also engaged in the construction of a number of plants, including the 1,400 MW Units 7 and 8 of the Rajasthan NPP. In transmission, Powergrid is engaged in the construction of the Rs 188 billion Green Energy Corridor 1 (Inter-state Transmission System Project Parts A to D).
Key awarded projects
The hydropower segment includes a number of projects awarded to private sector developers by various state governments. Some of these have failed to make much progress, primarily due to the delays in grant of environmental and technical clearances as well as opposition from local populations.
At present, there are 22 major HPPs aggregating an installed capacity of 16,053 MW and investment of Rs 1,328 billion at the pre-construction stage. Some of these projects have remained stuck for close to a decade. No major HPP has been awarded since 2011. Only one project was awarded during 2015 – the 960 MW Jhangi-Thopan-Powari HPP awarded to Reliance Energy Limited. However, this was a reallocation decision by the Himachal Pradesh government as the project was initially awarded to the Netherlands-based Brakel Corporation in 2008.
The largest HPP awarded is the 2,700 MW Lower Siang Hydro Power Project which was awarded to Jaiprakash Power Ventures Limited in 2006. The project was stalled due to delays in land acquisition and finalisation of the rehabilitation and resettlement plan.
Meanwhile, there are seven major transmission projects aggregating an investment of Rs 210 billion which were awarded during 2015 but are yet to begin construction.
Projects under bidding
The bidding process has been initiated for eight power projects aggregating an investment of Rs 1.36 trillion. These projects include four UMPPs located in Bihar, Tamil Nadu, Jharkhand and Odisha, aggregating 15,960 MW of installed capacity and an investment of Rs 1,080 billion. In addition, four major transmission line projects at an aggregate investment of Rs 278 billion are also under bidding. These include the intra-state transmission system being developed under the Green Energy Corridor 1 entailing construction of 13,600 ckt. km of transmission lines at an investment of Rs 151 billion across several states.
Projects on the drawing board
Power sector developers have announced a significant pipeline of projects. According to India Infrastructure Research, power companies have announced/proposed the development of 254 major projects entailing an investment of Rs 18.6 trillion. These include 190 TPPs aggregating a capacity of 268.5 GW (at expected investment of Rs 14,658 billion), 52 HPPs of 38.3 GW (Rs 3,149 billion), two NPPs of 4.8 GW (Rs 604 billion) and 10 transmission projects of 8,640 ckt. km (Rs 218 billion). Close to half the investments are proposed by private sector developers. About 83 per cent are in greenfield projects, while the remaining projects are expansions. The largest project at the development stage is the Upper Siang hydroelectric project in Arunachal Pradesh which will be constructed in two phases – 6,000 MW under Phase I and 3,750 MW under Phase II – over the next eight to ten years for about Rs 1,000 billion.
Conclusion
Power is one of the fastest growing sectors. Capacity addition has been driven by the strong investment climate created by government policies and legislations, growth in demand for electricity. It looks as though the growth momentum will continue through the medium term, providing significant investment opportunities to all stakeholders.
