Infrastructure Case

Investment climate in India is buoyant and various macro-economic parameters are reflecting that pace of growth of the economy has accelerated and macro- economic fundamentals are sound and moving towards right direction.

During the period 2007-12 average economic growth rate has been projected at 9% per annum. To sustain this economic growth power sector should also grow by 9%. In India electricity consumption per capita is 631 kWh as compare to the world average of 2490kWh. This shows that the demand for electricity is set to increase significantly.

The Power Ministry has set a target of 100,000 Mw of power capacity addition in the upcoming Twelfth Plan (2012-17). Add to this 20000MW which is the balance of XIth five year plan. This shows a huge requirement of power plants in India.

In India there is transmission & distribution loss of 31% where as in the U.S. has T&D losses at 6%. So, there is ample of opportunity in upgrading and addition of transportation and distribution network.

Along with these opportunities there are some issues which will affect the execution of power plants such as gas supply constraints, coal shortages, availability of power equipment, land acquisition and environmental issues.

An exchange is essential to a market driven economy where the prices are determined by the market forces like demand and supply unlike in economies that are driven by lobbies and political interventions. An exchange is essential to a market driven economy where the prices are determined by the market forces like demand and supply unlike in economies that are driven by lobbies and political interventions.

As the Electricity Act , 2003 gives provision for trading power like other commodities, it was decided to allow energy investors to set up power exchanges. On an electronic Power Exchange, traders from a large geographical spread converge without their identities being revealed. Therefore, anonymity of traders is maintained; hence market manipulation is thwarted and, in effect, a true-market driven power economy is enabled.

Currently, there are two power exchanges in operation and one under implementation

1.4 a.1 Indian Energy Exchange ( IEX) : IEX Offers

* Nationwide, Online and Electronic platform

* Voluntary participation.

* Neutral, Unbiased and Transparent

* Offer Day-Ahead Market(DAM)

* Exchange time-line consistent with time-line of Load Despatch Centres

* The activities of the Exchange will be carried out in accordance with the "Central Electricity Regulatory Commission.

1.4.a.2. Power Exchange India Limited (PXIL) : PXIL has successfully started its operations on 22nd October 2008. The initial products offered for trading are electricity contracts offered on a day-ahead basis with voluntary participation.

1.4.a.3. National Power Exchange Limited (NPEX): NPEX is a public limited company incorporated under the provisions of the

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