GAMMON INDIA LIMITED

Source Central State Private Total
Total 36,874.0 26,783.0 15,043.0 78,700.0*
*Based on actual orders, the aggregate additional capacity is 78,900.4 MW
Source: Central Electricity Authority (“CEA”)
The following table shows the power generation capacity from 1992 to 2009:
(MW)
160,000
120,000
80,000
40,000
0
1,512
Source: Planning Commission
There have been a number of other factors in recent years which are leading to increased investment in the
power industry and private sector participation in it:
Regulatory reforms
Power Generation Capacity
3,284
3,803
The Electricity Act, 2003 (the “Electricity Act”) was enacted in order to simplify the legislation
governing the electricity generation, transmission and distribution sectors and to introduce reforms
aimed at addressing systemic deficiencies in the Indian power industry. The key provisions of the
Act allow for delicensing of power generation, open access to power transmission and distribution,
restructuring of state electricity boards, compulsory metering of consumers and increased penalties
for the theft of electricity. The Electricity Act also included provisions to facilitate captive power
plants. However, the pace of implementation of these reforms has varied across states.
The Electricity Act, in combination with the National Tariff Policy introduced in January 2006,
also mandates that all future power purchases by distribution licensees must be based on
competitive bidding in order to obtain the benefits of reduced capital costs and efficiency of
operations.
Recent regulatory reforms include rules and provisions relating to interstate trading in electricity in
order to promote competition and several entities have started trading operations or have applied
for trading licenses.
Creation of transmission super highways
4,233
Most inter-regional and inter-state transmission links are owned and operated by POWERGRID
which is India’s central transmission utility that manages the national grid although some are
jointly owned with State Electricity Boards. POWERGRID is the central transmission utility of
India and possesses one of the largest transmission networks in the world.
POWERGRID is working towards the establishment of an integrated national power grid in order
to strengthen the regional grids and to support the generation capacity addition program of
approximately 80,000 MW during the 11 th Five-Year Plan period. The existing inter-regional
power transfer capacity of approximately 17,000 MW in the year ended March 31, 2008 is
66
9,263
3,454
1947 1992 1997 2002 2007 2008 2009
Capacity Installed MW per Year added
(MW/Year)
12,000
9,000
6,000
3,000
0