World Energy Outlook 2007

which was created in 1984 to reduce gas flaring, promote gas use and develop
midstream and downstream infrastructure. Since December 2006 private
investors have been free to develop their own infrastructure. Reliance Industries
is the most active private player in the gas sector, both upstream and
midstream. Foreign private companies are also active in the upstream oil sector.
ONGC Videsh is a wholly-owned subsidiary of ONGC which operates
exclusively in foreign markets. Other public and private Indian companies are
active in overseas upstream and downstream markets.
The majority of the power sector in India is also publicly owned. In 2005, the
State Electricity Boards (SEBs) owned 34 GW of generating capacity (CEA,
2006). 6 Central government-owned public companies, including the NTPC 7 ,
the National Hydroelectric Power Corporation and the Nuclear Power
Corporation, controlled about 27% of total capacity. The remaining 27% was
owned mainly by industrial autoproducers and independent power producers
(IPPs).
The central government has exclusive responsibility for high-voltage bulk interstate
transmission, through Powergrid, a public company. India has
interconnections with Nepal and Bhutan, and small power exchanges take
place. Transmission within states is in the hands of state transmission utilities.
Most distribution is carried out by SEBs. In March 2006, there were ten SEBs,
in Himachal Pradesh, Punjab, Madhya Pradesh, Chhattisgarh, Kerala, Tamil
Nadu, Bihar, Jharkhand, West Bengal and Meghalaya (CEA, 2007). Several
states have unbundled their activities, although the new companies remain
under the holding structure of the SEBs. The government aims to develop the
national grid, linking the current regional grids, to permit more efficient use of
power-generation capacity. The north-eastern region has abundant hydropower
resources and the eastern and central states have huge coal reserves, while the
main centres of demand are on the coast in the west and south and in the Delhi
region. Increased transmission capacity would ease the tight electricity supply
situation and avoid an extra burden on the railways' coal transport system,
which is over-stretched.
Power shortages and fluctuations in voltage and frequency are a common
feature of power supply in India. They arise from insufficient investment in
new capacity and the poor performance of existing equipment. The gap
between demand and maximum supply nationwide reached 14% in 2006
during peak periods, because of unreliable supply and the limitations of the
national transmission network (Ministry of Power, 2007). Underpricing and
failure to collect payment from many customers are fundamental causes of
these problems (see Chapter 17). Consumers at all levels are affected.
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6. Total installed capacity in 2005, including utilities and non-utilities, was 146 GW.
7. The National Thermal Power Corporation is officially called NTPC.
Chapter 15 - Overview of the Energy Sector 449