USAID/SARI/EI Task Force-3 meeting Bhutan s experience in Power Trading 29 th -30 th April, 2014, Mumbai Dasho Yeshi Wangdi Director General Department of Hydropower and Power Systems, BHUTAN
Presentation Outline Power export arrangement with India Trends in power export and export tariff Energy banking arrangements Power Trading Opportunities (Establish DETC)
Existing Generation: Plant Installed Capacity (MW) Commissioning Date 2013 Generation (MU) Mode of Implementation Chhukha 336 1986-88 1907.444 Bilateral Kurichhu 60 2001 378.603 Bilateral Tala 1020 2006-07 4913.628 Bilateral Basochhu I & II 64 2001 & 2004 331.771 Bilateral Total 1480 7531.446 - Total Domestic demand 293 MW/ 1750 MU (25% of total generation) - Total export ~ 5500 MU 3
Under Construction: Plant Installed Capacity (MW) Commissioning Date Generation (MU) Mode of Implementation Dagachhu 126 2014 515 PPP Punatsangchhu-I 1200 2018 5700 Bilateral Punatsangchhu-II 1020 2017 4000 Bilateral Mangdechhu 720 2017 2900 Bilateral Kholongchhu 600 2020 2599 JV Nikachhu 118 2019 492 PPP Total 3,784 16,206 - In near future, the following Projects are being planned for implementation: Bunakha (180 MW), Wangchhu (570 MW), Chamkhachhu-I (770 MW) under JV Sankosh (2560 MW), Amochhu (540 MW) and KuriGongri( 2640 MW) under IG 9 Projects under PFR/DPR IPP/PPP mode Apr 27, 2014 4
Power Trading arrangement with India: i. Bilateral Projects Long term PPA between designated agencies of two Govts. (DHPS and PTC). Duration of PPA: CHP 15 years w.e.f. 1 st Oct, 2002; THP 35 years w.e.f. 27 th Sept, 2006; KHP 25 years w.e.f. 1 st Oct, 2002. Terms & conditions of the PPA generally in accordance with agreed principles of the Inter-Governmental Agreements. RGoB to export only surplus power after meeting its internal demand and GoI to buy all surplus power from the project. Export tariff mutually determined by two Govts. at the time of commissioning of the project taking into account cost of project, its financing costs, O&M charges, depreciation and other factors. The export tariff is reviewed by two Govts. every three/four years. Apr 27, 2014 5
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Power Trading arrangement with India: Contd.. ii. Public-Private Partnership Projects (Dagachhu 126 MW) Power Off-taker cum equity partner Tata Power Trading/Tata Power (26% equity) Main ingredients of PPA 25 years PPA Initially agreed for min tariff with yearly escalation and under writing of sales of CERs Now, revised to min. guaranteed tariff with upside benefit sharing depending on market conditions For upcoming Nikachhu Project, power off-taker to be selected through bidding process. Long term PPA for 70% of energy generated and balance through short term trading. iii. For JV projects, Power Trader to be nominated by the two Govts and long term PPA for 70% of the generation and balance through short term. Apr 27, 2014 7
Map of Hydropower Plants and evacuation/delivery points Apr 27, 2014 8
Need for Introducing composite billing and energy accounting systems Currently each HEP has a dedicated PPA and energy accounting & billing system With addition of new generating plants with different export tariffs and using same delivery points for export, energy accounting is becoming more complex. PPP, IPP and JV export oriented projects will further complicate the energy accounting and billing system. In view of the above, a composite energy accounting system has to be implemented. Apr 27, 2014 9
A mechanism to import power from India to meet the anticipated shortages in the lean seasons arising due to the construction power requirements of the ten mega hydropower projects under the 10,000 MW development plan. Bhutan to import power from WBSEDCL through PTC through the Energy Banking Arrangement during lean seasons from December to April of each year from 2013 to 2016 Bhutan to return the power to WBSEDCL through PTC from 2017 onwards in the months of May- June with 7.5% annual premium in energy terms All accounting in terms of actual energy transacted and the arrangement to be a cashless transaction except for the import charges, such as POC, Trading Margin, SLDC charges, etc. 10
Power Trading Opportunities Establishment of DETC in India Apr 27, 2014 11
The projection of projects coming on line till 2026 and energy available (12% royalty and 30% merchant power) is as below: Projects Puna-I &II, Mangdechhu Bunakha Kholongchhu Wangchhu Chamkharch hu-i Amochhu Sankosh Kuri Gongri Start date In progress 2014 2014 2015 2015 2015 2015 2017 Completion 2017 2020 2021 2023 2024 2022 2023 2026 Capacity addition (MW) 2940 180 600 560 770 540 2560 2640 Royalty energy(mu) 1556.88 198.12 311.88 303.12 389.88 220.2 745.92 1206.72 30% Short Term Power (ST) (MU) 0 495.3 779.7 757.8 974.7 0 0 0 Cummulative Installed Capacity (MW)* 4,428 4,608 5,208 5,768 6,538 7,078 9,638 12,278 Cummulative Royalty Energy by (MU) Cummulative 30% ST Power (MU) 1,556.88 1,755.00 2,066.88 2,370.00 2,759.88 2,980.08 3,726.00 4,932.72 0 495.30 1,275.00 2,032.80 3,007.50 3,007.50 3,007.50 3,007.50 Apr 27, 2014 12
Power exports from Bhutan account for 9-10% of the entire traded power in Indian market, and with the new projects, it is likely to go up significantly on the projected Indian market by 2020. Energy available for marketing in India would be around 2200 MU by 2020 and 8000 MU by 2026 with completion of 10000 MW projects, excluding the PPP/ IPP projects. GoI policies are moving market participants away from long term PPAs and more into merchant sales, i.e., short term and medium term contracts. The Indian market is further evolving towards short term and medium term contracts. These have given rise to power exchanges, IEX and PXI, which have created markets for day-ahead and now even Intra-day markets. Apr 27, 2014 13
FDI is allowed 100% in the power sector in India, in generation, transmission, distribution and trading. The policy issue for electricity imports into India requiring import license and import duty of INR 2/Unit is also lifted. To seize opportunities available in the Indian market, there is a need for a presence in the Indian market. This would also enable understanding and optimizing the Unscheduled Interchange (UI) market (which accounts for 35% of the short term power traded); buying dry season power, etc., can be availed of. Financial Implications are not much for establishing DETC & to obtain a Class 1 power trading license. Exploratory Studies are underway for the possibility of establishing DETC Apr 27, 2014 14
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