Beyond Crisis : The Financial Performance of India's Power Sector

Khurana, Mani; Banerjee, Sudeshna Ghosh

Beyond Crisis : The Financial Performance of India's Power Sector

Autores

Khurana, Mani

Banerjee, Sudeshna Ghosh

Editor

Washington, DC: World Bank

Descripción

At the end of 2011, the Indian power sector found itself in financial crisis, just a decade after the 2001 bailout of state electricity boards (SEBs) by the central government. Bankrupt state power distribution utilities in several states were unable to pay their bills or repay their debts. Despite the passage of the landmark 2003 Electricity Act and implementation of a broad set of reforms over the past decade, the sector today is looking at another rescue from the center, four times larger than before. This financial rescue scheme amounts to about Rs 1.9 trillion ($42 billion) and was instigated by the nonperforming assets of the banks and other financial institutions. The Electricity Act was envisaged to create independent companies functioning on commercial principles, but they are still far away from that goal. This report presents a diagnostic of the financial and operational performance of segments in the power sector value chain between adoption of the Electricity Act, 2003, and 2011, including analysis of the factors that contributed to the recent crisis. The report focuses on efficiency and productivity, whether performance has improved over time, and which states have emerged as performance leaders. Analysis of this kind is not new or unique, but this report aims to integrate historical performance, the current situation, future projections of the impact of worsening sector finances, and the actions that need to be taken to check the downturn. The report draws primarily from utility data collected by the Power Finance Corporation in successive years on utilities operational and financial performance. The Power Finance Corporation data were collated into a single database with the addition of various operational parameters at the plant level and the utility level from the Central Electricity Authority.

Palabras clave

ACCESS TO ELECTRICITY, ACCOUNTING, ADVERSE IMPACTS, AFFORDABLE PRICES, AGRICULTURE, AMOUNT OF POWER, APPROACH, ARREARS, AVAILABILITY, BAILOUT, BALANCE, BALANCE SHEET, BENCHMARK, BENCHMARKING, BIDS, BILATERAL TRANSACTIONS, BUSINESS MODELS, CAPABILITIES, CAPACITY PLANNING, CAPITAL ADEQUACY, CAPITAL EXPENDITURES, CASH FLOWS, COAL, COAL CONSUMPTION, COAL PRODUCTION, COLLECTION EFFICIENCY, COMMERCIAL BANKS, COMPETITIVE BIDDING, COMPETITIVE MARKETS, COMPETITIVE POWER MARKETS, COMPETITIVE PRICES, COMPETITIVE PROCUREMENT, COMPOSITION OF DEBT, CONSUMERS, COPYRIGHT, COST ASSUMPTIONS, COST OF POWER, COST RECOVERY, CREDITORS, CUSTOMER RELATIONS, CUSTOMER SATISFACTION, CUSTOMER SERVICE, DEBT, DEBTOR, DEBTS, DEFICITS, DEMAND FOR ELECTRICITY, DEMAND FOR ENERGY, DEMAND FOR POWER, DEVELOPMENT FINANCE, DISTRIBUTION COMPANIES, DISTRIBUTION LOSSES, DISTRIBUTION OF ELECTRICITY, DISTRIBUTION OPERATIONS, DOMAIN, DOMESTIC COAL, E-MAIL, ECONOMIC GROWTH, ECONOMIES OF SCALE, EFFICIENCY IMPROVEMENT, EFFICIENCY IMPROVEMENTS, EFFICIENT POWER PROCUREMENT, ELECTRIC POWER, ELECTRICITY, ELECTRICITY CAPACITY, ELECTRICITY DISTRIBUTION, ELECTRICITY GENERATION, ELECTRICITY SECTOR, ELECTRICITY SUPPLY, ENERGY CONSUMPTION, ENERGY EFFICIENCY, ENERGY GENERATION, ENERGY SHORTAGE, FINANCES, FINANCIAL CRISIS, FINANCIAL DISTRESS, FINANCIAL INSTITUTIONS, FINANCIAL PERFORMANCE, FINANCIAL SUPPORT, FINANCIAL VIABILITY, FISCAL DEFICIT, FIXED COSTS, FOREIGN EXCHANGE, FOREIGN INVESTORS, FUEL, FUEL COSTS, FUTURE DEMAND, GAS, GDP, GENERATION, GENERATION CAPACITY, GOVERNMENT BONDS, GOVERNMENT BUDGETS, GOVERNMENT POLICIES, GROSS DOMESTIC PRODUCT, GROWTH RATE, HEAT, HEAT RATE, HEAT RATES, HUMAN DEVELOPMENT, HUMAN RESOURCES, HYDROPOWER, IMAGES, INDEPENDENT POWER PRODUCERS, INDEPENDENT REGULATION, INEFFICIENCY, INFLATION, INFORMATION SYSTEMS, INFORMATION TECHNOLOGY, INFRASTRUCTURE DEVELOPMENT, INSTITUTION, INSTRUMENT, INTEREST COSTS, INTEREST PAYMENTS, INTERNATIONAL BANK, INTERNATIONAL ENERGY, INVESTMENT FLOWS, KILOWATT HOUR, LICENSE, LICENSES, LIQUIDITY, LLC, LOAD FACTOR, LOAD FACTORS, LOAD PROFILE, LOAN, LOANS FROM BANKS, LONG-TERM LOANS, MARKET DATA, MARKET DEVELOPMENT, MARKET REFORM, MARKET REFORMS, MARKET STRUCTURE, MARKET STRUCTURES, MONOPOLY, MONOPOLY SUPPLIER, NETWORK ACCESS, NETWORK PLANNING, NETWORKS, NONPAYMENT, NONPERFORMING LOANS, OIL, OIL CONSUMPTION, OPEN ACCESS, OPERATIONAL EFFICIENCY, OPPORTUNITY COST, OUTSOURCING, OUTSTANDING LOANS, PEAK DEMAND, PHOTO, POLICY FRAMEWORKS, POWER, POWER CAPACITY, POWER CORPORATION, POWER COSTS, POWER DISTRIBUTION, POWER GENERATION, POWER GENERATORS, POWER GRID, POWER INDUSTRY, POWER PLANTS, POWER PROCUREMENT, POWER PRODUCERS, POWER PURCHASE, POWER PURCHASE AGREEMENTS, POWER PURCHASE COSTS, POWER PURCHASES, POWER REQUIREMENT, POWER SECTOR, POWER SECTOR DEVELOPMENT, POWER SECTOR REFORM, POWER SECTORS, POWER SHORTAGE, POWER STATIONS, POWER SYSTEM, PRIMARY ENERGY, PRIMARY ENERGY SUPPLY, PRIVATE CREDITOR, PRIVATE PARTNERSHIP, PRIVATE SECTOR, PRIVATE SECTOR PARTICIPATION, PUBLIC SECTOR, QUALITY OF ENERGY, QUERIES, REGRESSION ANALYSIS, RENEWABLE ENERGY, RENEWABLE SOURCES, RESERVE, RESERVE BANK, RESULT, RESULTS, RETAIL MARKETS, RETAIL TARIFFS, RETURN, REVENUE COLLECTION, RISK PROFILE, RURAL ELECTRIFICATION, SENSITIVITY ANALYSIS, SHORT-TERM BORROWING, SOLVENCY, STATE UTILITIES, TARGETS, TARIFF CHANGES, TARIFF REFORMS, TARIFF REVISIONS, TARIFF STRUCTURE, TAX, TELEPHONE, THERMAL PLANTS, THERMAL POWER, THERMAL POWER GENERATION, THERMAL POWER PLANT, TOTAL COSTS, TOTAL DEBT, TOTAL FACTOR PRODUCTIVITY, TRADING, TRANSACTION, TRANSLATION, TRANSMISSION, TRANSMISSION LINES, TRANSMISSION SYSTEM, TRANSMISSION SYSTEMS, TRANSPARENCY, TURNOVER, UNIVERSAL ACCESS, UTILITIES, VALUE CHAIN, VARIABLE COST, VARIABLE COSTS, WHOLESALE MARKET, WIND