The Enron Saga
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The Power Sector
In India the power sector was dominated by Central and State government owned organizations. In most of the cases, any State Electricity Board (SEB) was the sole generator, transmittor and distributor of power. Power was generated by Central Utilities such as NTPC, NHPC, Nuclear Power Corporation, Damodar Valley Corporation and NEEPCO; State Electricity Boards which were state-owned utilities; licensees such as BSES and CESC and Independent Power Projects (IPPs). |
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Table I
Power Generation (1999-2000)
|
PRIVATESector |
% |
|
Central Sector |
34.0% |
|
State Sector |
58.1% |
|
Private Sector |
6.5% |
|
Licensees |
3.9% |
|
IPPs |
2.6% |
|
Others |
1.4% |
|
All India |
100.0% |
Source: www.indiainfoline.com
Transmission and distribution was mostly in the hand of SEBs with the
sole exception of Orissa where power distribution was in the hands of
the private sector. In 2000, India's power generation capacity stood at
around 96600MW (Approx. 478 billion units) . The major portion of the
capacity was set up by SEBs (58%). This was followed by centrally
controlled plants, which contributed 34%. IPPs started contributing to
installed capacity only as recently as 1996.
Central Utilities dominated the Indian power generation sector. Even
after the new power policy of 1991came into effect, their share in power
generated, as well as new capacity added, did not diminish
significantly. This was largely due to the failure of IPPs to take off.
Central Utilities included Powergrid Corporation of India, Power Finance
Corporation of India, Rural Electrification Corporation and Power
Trading Corporation of India. To meet the growing shortage of power, the
government encouraged private (including foreign) participation in the
power sector. The new power policy permitted 100 per cent foreign owned
companies to set up power projects of any capacity and type (coal, gas,
hydel, wind or solar).
An Independent Power Producer (IPP), after getting government approvals
for its specified plant size, could generate power and sell it to the
respective SEBs under a Power Purchase Agreement (PPA).
Licensees were predominantly private companies that generated and
distributed electricity to urban areas. Prominent among these were
Mumbai based licensees such as Tata Electric Companies (TEC), BEST and
BSES, Calcutta-based CESC and Ahmedabad-based AEC.
Between 1991 and 2000, power demand grew by 7.5-8% annually fuelled by
industrial growth and urbanization. The demand was expected to grow at
the rate of 9 % annually between 2001 and 2010.
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