power: industry report ,march 2013
TRANSCRIPT
![Page 1: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/1.jpg)
11
Power
For updated information, please visit www.ibef.org
MARCH
2013
![Page 2: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/2.jpg)
22
Contents Advantage India
Market overview and trends
Growth drivers
Success stories: NTPC, Tata Power
Opportunities
Useful information
For updated information, please visit www.ibef.org
PowerMARCH
2013
![Page 3: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/3.jpg)
33
Power
For updated information, please visit www.ibef.org ADVANTAGE INDIA
Advantage India
Advantage
India
• Expansion in industrial activity to boost demand for electricity
• Growing population, and increasing penetration and per-capita usage to provide further impetus
• Large capacity additions (100 GW) targeted in the 12th and 13th Five Year Plans
• Ambitious projects and increasing investments across the value chain
• One of the key sectors attracting FDI inflows into India; inflows recorded a CAGR of 63 per cent during FY06-12
• Major investments earmarked by public as well as private sector companies across the value chain
• Elimination of licensing for various segments; removal of entry barriers
• Cost reduction and rationalisation of tariffs; development of Ultra Mega Power Projects (UMPP)
• Fuel supply agreement of power producers with Coal India
Total demand (TWh): 1915.0
FY22
Total demand (TWh): 969.0
FY12
Source: Assorted articles and research material, Aranca ResearchNotes: FY - Indian Financial Year (April - March), FDI - Foreign Direct Investment, E - Estimates,
CAGR - Compound Annual Growth Rate, TWh - Terawatt-hour, FY22 estimates as per IEA forecasts
Growing demand Opportunities
Increasing investments Policy support
MARCH
2013
![Page 4: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/4.jpg)
44
Contents Advantage India
Market overview and trends
Growth drivers
Success stories: NTPC, Tata Power
Opportunities
Useful information
For updated information, please visit www.ibef.org
PowerMARCH
2013
![Page 5: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/5.jpg)
55For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Evolution of the Indian Power sector
Power
• Electricity (Supply) Act 1948
• Establishment of semi-autonomous State Electricity Boards (SEBs)
• Industrial Policy Resolution (1956)
• Generation and distribution of power under state ownership
• Power losses, subsidies, infrastructure bottlenecks, and resource constraints
• Legislative and policy initiatives (1991)
• Private sector participation in generation
• Fast track clearing mechanism of private investment proposals
• Electricity Regulatory Commissions Act (1998) for establishing Central and State Electricity Regulatory Commissions and rationalisation of tariffs
• Electricity Act (2003)• National Tariff Policy
(2006)• Elimination of licensing for
generation projects• Increased competition
through international competitive bidding
• engaged in power generation, transmission and distribution
• Launch of Ultra Mega Power Project (UMPP) scheme
• Various schemes and initiatives such as Jawaharlal Nehru National Solar Mission to promote renewable energy
• Civil nuclear agreement with the US for nuclear technology and fuel
• Fuel supply agreement of power companies with Coal India ltd
Introductory Stage
Nationalisation Stage
Liberalisation Era
Growth Era
Source: KPMG, Corporate Catalyst India, IFLR, Aranca Research
Before 1956
1956-1991
1991-2003
2003 onwards
MARCH
2013
![Page 6: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/6.jpg)
66For updated information, please visit www.ibef.org
India is among the world’s top five power producers and consumers
→ India is the fifth largest producer and consumer of electricity in the world after China, US, Russia and Japan
→ Power generation has grown more than 100 fold since independence while demand growth has been even higher due to accelerating economic activity
World’s leading electricity producers (2011)
Source: CIA World Factbook, Aranca ResearchNote: * - Data mentioned for US, Russia,
India & Canada is for 2010
MARKET OVERVIEW AND TRENDS
Power
China
US*
Russia*
Japan
India*
Canada*
0 1,000 2,000 3,000 4,000 5,000
4,604
4,120
983
938
880
581TWh
MARCH
2013
![Page 7: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/7.jpg)
77For updated information, please visit www.ibef.org
→ Electricity production in India (excluding captive generation) stood at 876.4 TWh in FY12, a growth of 8.1 per cent over the previous fiscal
→ Over FY06-12, electricity production has expanded at a CAGR of 6 per cent
→ Electricity production for the period April to October 2012 stood at 509.4 TWh
Source: Central Electricity Authority (CEA), Aranca Research;
Notes: FY - Indian financial year (April - March),TWh - Terra Watt hour,
* Data for FY13 is for the period April to October 2012.
MARKET OVERVIEW AND TRENDS
Power
Electricity production in India (TWh)
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13*
617.5662.5
704.5 723.8771.6
811.1876.4
509.4
MARCH
2013
Power generation has been growing rapidly over the years
![Page 8: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/8.jpg)
88For updated information, please visit www.ibef.org
Source: Ministry of Coal, NHPC,CEA, The Hindu, Corporate Catalyst India, Aranca Research
Notes: MW - megawattMARKET OVERVIEW AND TRENDS
Power
Hydro
Renewable
Nuclear
Thermal
India has large reserves of coal; estimates for FY11 put the figure at about 285.8 billion tonnes
India’s proven natural gas reserves measure about 1,074 billion cubic meters
With a large swathe of rivers and water bodies, India has enormous potential for hydropower; 12th Five Year Plan (2012-2017) includes additional 30,000 MW of hydro-electric power generation. India currently has 39.3 GW of hydro power
generating capacity
Wind energy is the largest renewable energy source in India; projects like the Jawaharlal Nehru National Solar Mission (which aims to generate 20,000 MW of solar power by 2022) is creating a positive environment among investors keen
to exploit India’s potential
India currently has 4.8 GW of net electricity generation capacity using nuclear fuels (across twenty reactors) and aims to increase it up to 20GW by 2020;
with one of the world’s largest reserves of thorium, India has huge potential in nuclear energy
Gas
Coal
67%
56%
10%
19%
12%
2%
MARCH
2013
Sources of power with shares in total installed capacity
![Page 9: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/9.jpg)
99For updated information, please visit www.ibef.org
→ India’s installed power generation capacity was 199.9 GW at the end of March 2012
→ Installed capacity has been increasing steadily over the years; over FY09-12, it posted a CAGR of 10.5 per cent
→ Installed capacity as on October 2012 stood at 209.3 GW
Installed electricity generation capacity (GW)
Source: Central Electricity Authority (CEA), Aranca Research
Note: GW - Gigawatt, Data for FY13* is as on October - 2012
MARKET OVERVIEW AND TRENDS
Power
FY09 FY10 FY11 FY12 FY13*
148159
174
200 209CAGR:
9.1%
MARCH
2013
Generation capacity has been increasing at a healthy pace … (1/2)
![Page 10: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/10.jpg)
1010For updated information, please visit www.ibef.org
→ Among the different sources of power in India,
the CAGR in installed capacity over FY09-12 was
-
→ 12 per cent for thermal power
→ 23 per cent for renewable energy, the
fastest among all sources of power
Comparison of installed capacity (GW)
Source: Central Electricity Authority (CEA), Aranca Research,
Data for FY13* is as on October 2012
MARKET OVERVIEW AND TRENDS
Power
Thermal
Hydro
Renewable
Nuclear
0 20 40 60 80 100 120 140 160
140.2
39.3
25.0
4.8
131.6
39.0
24.5
4.8
93.7
36.9
13.2
4.1
FY09 FY 12 FY13*
MARCH
2013
Generation capacity has been increasing at a healthy pace … (2/2)
![Page 11: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/11.jpg)
1111For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Key players in the power sector … (1/2)
Company Business description
• NTPC is India’s largest power producer and the sixth-largest thermal power producer in the world with an installed capacity of more than 39,674 MW. By 2032, NTPC plans to become a 128,000 MW company
• It has also diversified into hydro - power, coal mining, power equipment manufacturing, oil and gas exploration, power trading, and distribution
• Tata Power is India’s largest integrated power company, with significant presence in solar, hydro, wind and geothermal energy. The company accounts for 52 per cent of total generating capacity of the private sector with an installed capacity of 6,900 MW
• The company has a portfolio of over 35,000 MW of power generation capacity, both operational as well as under development
• CESC Limited is a vertically integrated player engaged in coal mining, and generation and distribution of power
• NHPC is the largest hydro power utility in India with an installed capacity of 5,295MW and has drawn up a massive capacity expansion plan of adding 6,697 MW up to the year 2017
Source: Company websites, News articles, Aranca Research
PowerMARCH
2013
*This list is indicative
![Page 12: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/12.jpg)
1212For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Key players in the power sector … (2/2)
Source: Company websites, News articles, Aranca Research
Notes: NBFC - Non-banking financial company
PowerMARCH
2013
Company Business description
• Power Finance Corporation Limited (PFC ) is an NBFC engaged in financing and development activities within the Indian power sector
• Major products and services include project term loans, lease financing, direct discounting of bills, short-term loans and consultancy services
• Adani Power is one of India’s largest private thermal power producers with total capacity of 4,660 MW; the company aims to generate 20,000 MW of power by 2020
• The company is building one of the world’s largest single location thermal power plants in Mundra, Gujarat
• Power Grid Corporation of India Limited (PGCIL) is the single largest transmission utility in India and is responsible for planning, co-ordination, supervision and control over inter-state transmission systems
• Damodar Valley Corporation is engaged in power generation, distribution and transmission of electric power, irrigation, and flood control
• SJVN Limited is the second largest hydro power company in India• The company plans to diversify into wind power projects soon
*This list is indicative
![Page 13: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/13.jpg)
1313
Contents Advantage India
Market overview and trends
Growth drivers
Success stories: NTPC, Tata Power
Opportunities
Useful information
For updated information, please visit www.ibef.org
PowerMARCH
2013
![Page 14: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/14.jpg)
1414For updated information, please visit www.ibef.org GROWTH DRIVERS
Strong government
support
Growing demand
Inviting Resulting
in
Growing demand Increasing investments
Policy support
Increase in industrial activity
Increasing penetration, per-capita
consumption
Growing consumer
base
Electricity Act (2003)- highly
liberal framework for
generation
Fuel supply agreement of
power companies
with Coal India Ltd
Development of Ultra Mega
Power Projects (UMPPs)
Rising FDI inflows
(USD1.65 billion in FY12)
Growing M&A activity
Large investmentsin equipment
manufacture and power
generation Source: Corporate Catalyst India, Ministry of Power, Aranca ResearchNotes: FDI - Foreign Direct Investment, M&A - Merger and Acquisition,
R-APDRP - Restructured Accelerated Power Development and Reform Programme, T&D - Transmission and Distribution
PowerMARCH
2013
Strong demand and policy support driving investments
![Page 15: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/15.jpg)
1515For updated information, please visit www.ibef.org
→ Multiple drivers (industrial expansion, growing per-capita incomes) are leading to growth in power demand; this is set to continue over the coming years as well -
→ During FY10-15, GDP growth is likely to average 8.0-8.5 per cent
→ India is set to become a global manufacturing hub with investments across the value chain
→ India’s power demand is expected to rise up to 1,915 TWh by FY22
GROWTH DRIVERS
Power
2009 2010 2011E 2012E 2013E 2014E 2015E
47.4% 48.1%48.8%
49.6%50.3%
51.0%
57.9%
Share of industry in electricity consumption
Source: Estimates as per BMI India Power Report Q3 2011, Aranca Research
MARCH
2013
Industrial expansion and strong GDP growth driving power demand … (1/2)
![Page 16: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/16.jpg)
1616
2010 2011 2012E 2013E 2014E 2015E 2016E400
450
500
550
600
650
700
750
543.2561.9
583.8613.1
648.4680.7
718.1
For updated information, please visit www.ibef.org
→ 82GW worth of generation capacity is set to be added during FY11-FY15; future investments will benefit from strong demand fundamentals, policy support, and increasing government focus on infrastructure
→ Residential consumption has been growing at a fast pace; growth was 14 per cent in FY11
→ Government initiatives like RGGVY and ‘Power for all’ will further drive the demand
GROWTH DRIVERS
Power
Per-capita electricity consumption (KWh)
Source: Estimates as per BMI India power report Q4 2012, Mckinsey, Aranca Research
CAGR: 4.8%
MARCH
2013
Notes: RGGVY - Rajiv Gandhi Grameen Vidyutikaran Yojana
Industrial expansion and strong GDP growth driving power demand … (2/2)
![Page 17: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/17.jpg)
1717For updated information, please visit www.ibef.org
Electricity Act, 2003
• Elimination of licensing for electricity generation projects
• Increased competition through international competitive bidding
• Demarcation of transmission as a separate activity
National Tariff Policy, 2006
• Adequate return on investment to the companies engaged in power generation, transmission and distribution
• Uniform guidelines to SERCs for fixing tariffs
• Assured electricity to consumers at reasonable and competitive rates
Ultra Mega Power Projects (UMPP)
• Launch of Ultra Mega Power Project (UMPP) scheme through tariff based competitive bidding
• Ease of land possession, provision of fuel, water and necessary clearances for enhancing investor confidence
Source: KPMG, CRISIL, Ministry of Power, Aranca ResearchNotes: R-APDRP - Restructured Accelerated Power Development and Reform
Programme,SERC - State Electricity Regulatory Commission, AT&T - American Telephone &
Telegraph SystemsGROWTH DRIVERS
Power
R-APDRP
• R-APDRP was launched by Ministry of Power with the purpose of reducing AT&T losses up to 15 per cent by upgradation of transmission and distribution network
• Linking disbursement of central government funds (to states) with actual reduction in transmission and distribution losses. Sanctioned projects of more than USD5.8 billion
Fuel Supply Agreement
• Fuel supply agreement with Coal India Ltd. will ensure the availability of coal for power companies over the long term
MARCH
2013
Policy support aiding growth in the sector
![Page 18: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/18.jpg)
18
Budget FY13: Power is a key focus area
For updated information, please visit www.ibef.org
Power
→ Government has removed customs duty on import of coal and natural gas
→ Government has directed Coal India Ltd to sign fuel supply agreements with power companies to boost energy generation
→ Power companies have been allowed to take recourse to external commercial borrowings (ECBs) to part finance their rupee debt
→ The withholding tax on ECBs has been reduced to 5 per cent from 20 per cent
→ The limit for tax-free bonds for the power sector has been increased to INR100 billion (~USD2 billion) from INR50 billion (~USD1billion)
→ Government has also extended the tax holiday for one year; this allows power producers to claim tax exemption up to 10 years
Source: Union Budget FY13, various news artilces,
Indian Express, Aranca Research
MARCH
2013
GROWTH DRIVERS
![Page 19: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/19.jpg)
1919
FY06 FY07 FY08 FY09 FY10 FY11 FY12
87 157
967 985
1,4371,252
1,652USD million
For updated information, please visit www.ibef.org
→ Power is one of the key sectors attracting FDI inflows into India
→ During FY06-12, FDI inflows into the sector increased from a mere USD87 million in FY06 to USD1,652 million in FY12
Source: : Department of Industrial Policy and Promotion, Aranca Research
GROWTH DRIVERS
Power
FDI inflows into the power sector
CAGR: 63.3%
MARCH
2013
Increasing investments: FDI inflows and key deals … (1/2)
![Page 20: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/20.jpg)
2020For updated information, please visit www.ibef.org
→ The sector has witnessed a total of 35 M&A deals since 2010
→ Morgan Stanley Infrastructure Fund’s investment in Asian Genco Pvt Ltd was the largest PE transaction in the Indian power sector
→ Global power giants like GDF Suez of France and E.ON of Germany have drawn up plans to enter the Indian market
Source: Thomson One Banker, Economic Times, Aranca Research
Notes: FDI - Foreign Direct Investment, PE - Private Equity
GROWTH DRIVERS
Power
Mergers and Acquisitions (M&A)
Acquirer TargetDeal date
Deal value (USD
million)Athena Capital Partners LLP
SPS Ispat and Power Ltd
08th Jul 2011
67.6
India Infrastructure
Fund
Caparo Energy (India) Ltd
17th Jun 2011
78.5
Warburg Pincus India Pvt Ltd
Diligent Power Pvt Ltd
11th May 2011
150.0
Blackstone Group LP
Moser Baer Projects Pvt
Ltd
18th Aug 2010
300.0
Morgan Stanley Infrastructure
Asian Genco Pvt Ltd
18th Mar 2010
425.0
GSPC Distribution Networks Ltd
Gujarat Gas Co
Ltd3rd Oct 2012
674.2
MARCH
2013
Increasing investments: FDI inflows and key deals … (2/2)
![Page 21: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/21.jpg)
2121
Contents Advantage India
Market overview and trends
Growth drivers
Success stories: NTPC, Tata Power
Opportunities
Useful information
For updated information, please visit www.ibef.org
PowerMARCH
2013
![Page 22: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/22.jpg)
2222For updated information, please visit www.ibef.org
NTPC: A public sector success … (1/2)
SUCCESS STORIES: NTPC, TATA POWER
Power
→ During FY06-12, NTPC’s revenues increased at a CAGR of 16 per cent; CAGR in profits was 9 per cent
→ NTPC accounts for 19 per cent of the country’s capacity; however it contributes 27.4 per cent of total power generation
→ The company has an installed capacity of 39,674 MW. It plans to become a 128,000 MW company by 2032
→ It spent approximately USD 2.2billion in FY12 and plans to spend an additional USD4 billion in FY13 in expansion activity
→ Company is planning to set up a 800 - Mega watt (MW) advanced ultra super critical plant, which will be the first in India
Source: NTPC website, annual reports, Economic Times, Aranca Research
Notes: NTPC - National Thermal Power Corporation
Top line and bottom line (USD billion)
FY06 FY07 FY08 FY09 FY10 FY11 FY120.0
0.5
1.0
1.5
2.0
2.5
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Net Profit Net Sales- right axis
MARCH
2013
![Page 23: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/23.jpg)
2323For updated information, please visit www.ibef.org
NTPC: A public sector success … (2/2)
SUCCESS STORIES: NTPC, TATA POWER
Power
→ NTPC has taken over and successfully turned around a number of sub-optimally performing stations
→ High operational efficiency (indicated by plant load factor and availability factor) is NTPC’s trademark
→ It is a pioneer in high-efficiency supercritical and ultra supercritical coal-based power plants in India
Source: NTPC website, Annual Reports, Economic Times, Aranca Research
Notes: PLF - Plant load factor,After Takeover - figures for FY08
Impact of NTPC takeover of sub-optimal plants (PLF)
Before takeover After takeover0%
20%
40%
60%
80%
100%
120%
66%
86%
18%
98%
19%
86%
22%
92%
Badarpur Unchahar Talcher Tanda
MARCH
2013
![Page 24: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/24.jpg)
2424For updated information, please visit www.ibef.org SUCCESS STORIES: NTPC, TATA POWER
Power
→ During FY06-12, Tata Power’s profits increased at a CAGR of 11.5 per cent
→ The company has an installed generation capacity of 6900MW in India and presence in all the segments of the power sector
→ The company is developing its first 4000 MW Ultra Mega Power Project at Mundra (Gujarat) based on super-critical technology
→ The company is increasingly eyeing the clean energy segment; it recently acquired stakes in two Australian companies in the sector
Source: Company website, annual reports,Economic Times, Aranca Research
Growth in net income (USD million)
FY06 FY07 FY08 FY09 FY10 FY11 FY12
127.2
145.2
181.2
192.1 197.4 196.1
243.8
CAGR:
11.5%
MARCH
2013
Tata Power: Forging ahead in the private sector … (1/2)
![Page 25: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/25.jpg)
2525For updated information, please visit www.ibef.org SUCCESS STORIES: NTPC, TATA POWER
Power
→ The company estimates its installed capacity to expand five-fold in the next five years to 25000 MW (CAGR of 30 per cent from FY07 and 47 per cent from FY12)
→ Recognising the enormous potential in renewable energy, the company intends to increase the share of renewable sources to 25 per cent of its total generating capacity in the near future
Source: Company website, FY17 estimate as per press release, 15th July 2011
Note : MW - mega watt, CAGR - Compounded annual growth rate
Installed capacity in mega watts (MW)
FY07 FY11 FY12 FY17E
2,300 3,120
5,297
25,000
CAGR: 30 %
MARCH
2013
Tata Power: Forging ahead in the private sector … (2/2)
![Page 26: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/26.jpg)
2626
Contents Advantage India
Market overview and trends
Growth drivers
Success stories: NTPC, Tata Power
Opportunities
Useful information
For updated information, please visit www.ibef.org
PowerMARCH
2013
![Page 27: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/27.jpg)
2727For updated information, please visit www.ibef.org OPPORTUNITIES
→ Demand for electricity is expected to expand at a CAGR of 7.6 per cent over FY07-FY22 to 1,915 TWh
→ Current production levels are not enough to meet demand; annual demand outstrips supply by about 7.5 per cent
Source: International Energy Agency (IEA), demand estimates based on IEA forecasts, Aranca Research
Note: CAGR - Compounded annual growth rate
Electricity demand forecast
Power
TWh
FY07 FY12 FY17E FY22E
690
969
1,392
1,915
CAGR: 7.6%
MARCH
2013
Power generation: Overall fundamentals will remain strong … (1/2)
![Page 28: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/28.jpg)
2828For updated information, please visit www.ibef.org OPPORTUNITIES
→ The government has targeted capacity addition of 100,000 MW each under the 12th (2012-17) and 13th (2017-22) Five Year Plans
→ There is tangible shift as regards to policy focus on the sources of power; The government is keen to promote hydro, renewable and gas-based projects, as well as adoption of clean coal technology
Source: Business Standard, capacity addition estimates by Central Electricity Authority (CEA),
Aranca ResearchNotes: TWh - terawatt-hour, E - estimates
Addition to generation capacity under Five Year Plans (GW)
Power
Plan No 10th 11th 12th E 13th E -
20
40
60
80
100
120
21
55
100 100
MARCH
2013
Power generation: Overall fundamentals will remain strong … (2/2)
![Page 29: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/29.jpg)
2929For updated information, please visit www.ibef.org OPPORTUNITIES
Power
Generation
Plans to invest USD17.7 billion in power generation by 2014
Coal-fired plant in Tamil Nadu; investment of USD1.3 billion
Germac Energy and Sepco III
(JV)
Adani Power
Nuclear power ambition; studying entry strategy with minimum investment of USD3.0 billion
Tata Power
USD2.5 billion investment in hydro-power in Arunachal Pradesh with combined generating capacity of 2.5 GW
Reliance Power
T&D
Loan from ADB of USD600 million for development of high-voltage transmission system
Developing an integrated national grid, including strengthening of five regional grids; project investment is worth about USD16 billion
Pow
er
Gri
d
Corp
ora
tion o
f In
dia
Ltd
(PG
CIL
)
Joint development of an India - Sri Lanka undersea transmission link with the Ceylon Electricity Board at an estimated cost of USD573 million
Investments across
the value chain
Source: BMI India power report Q3 2011, Aranca ResearchNotes: JV - Joint venture, T&D - Transmission and distribution, GW
- gigawatt
MARCH
2013
Current trends point to opportunities across the value chain
![Page 30: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/30.jpg)
3030
China United States
Germany Spain Italy India Japan
70 6861
2822 20
11
For updated information, please visit www.ibef.org
India has the sixth largest renewable (ex hydropower) power generation capacity (2011)
Source: : Renewables 2012 Global Status Report (REN21), Business Monitor International (BMI),
Aranca Research;Note: TWh - Tera Watt hour; GW - Gigawatt
MARKET OVERVIEW AND TRENDS
Power
→ Power generation from renewables (other than hydropower) has been estimated at 20 GW in 2011, a 2.4 per cent share in India’s total power generation
→ Wind energy is the largest source of renewable energy in India; it accounts for an estimated 87 per cent of total installed capacity in renewable energy. The country aims to increase the importance of wind power even further; there are plans to double wind power generation capacity to 20 GW by 2022
→ Biomass is the second largest source of renewable energy, accounting for 12 per cent of total installed capacity in renewable energy. There is strong upside potential in biomass in the coming years
→ Solar energy accounts for 1 per cent of total
renewable energy installed capacity. However, the share is not indicative of the country’s true potential, which stands at an estimated 5,000 TWh per annum
India ranks sixth in the world
GW
MARCH
2013
Renewable energy is fast emerging as a major source of power
![Page 31: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/31.jpg)
3131For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Power
→ In 2010, India was fifth in the Asia-Pacific region in nuclear electricity net generation (behind Japan, South Korea, China, Taiwan)
→ Currently, the country has net electricity generation capacity of 4.8 GW, using nuclear fuels, across twenty reactors. Of the twenty reactors, 18 are pressurised heavy water reactors (PHWR); two are boiling water reactors (BWR)
→ The government aims to quadruple India’s nuclear power generation capacity to 20 GW by 2020; seven nuclear power reactors of 4,890 Mw capacity are already under construction
→ Nuclear Power Corporation of India Limited (NPCIL) is planning to construct five nuclear energy parks with a capacity of 10,000 Mwe
2012 2020E
4.4
20
CAGR:
24.0%
Nuclear energy production in India in (GW)
Source: Ministry of New and Renewable Energy, Business Monitor International , Aranca ResearchNote: GW - Gigawatts; MWe - Mega Watt electric
PHWR - Pressurised Heavy Water ReactorsBWR - Boling Water Reactiors
MARCH
2013
Strong upward trend in nuclear energy likely in the medium to long term
![Page 32: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/32.jpg)
3232
Contents Advantage India
Market overview and trends
Growth drivers
Success stories: NTPC, Tata Power
Opportunities
Useful information
For updated information, please visit www.ibef.org
PowerMARCH
2013
![Page 33: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/33.jpg)
3333For updated information, please visit www.ibef.org USEFUL INFORMATION
Industry Associations … (1/2)
Council of Power UtilitiesA-2/158, Janakpuri, New Delhi -110058, IndiaTel : 91 11 25618472, 45652708Fax : 25611622E-mail : [email protected], [email protected] Web site: www.indiapower.org
Hydro Power Association (India)Flat no 6, Green Park Apartment, Shriram Society, Warje, Pune - 411058, Maharashtra, IndiaTel: 91 20 25233338E-mail: [email protected], [email protected], [email protected]: http://hpaindia.org/
Bureau of Energy Efficiency (BEE)Ministry of Power, 4th Floor, SEWA Bhawan, R. K.Puram, New Delhi - 110066, India Tel: 91 11 26179699Fax: 91 11 26178352E-mail: [email protected]: http://www.beeindia.in/
PowerMARCH
2013
![Page 34: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/34.jpg)
3434For updated information, please visit www.ibef.org USEFUL INFORMATION
Industry Associations … (2/2)
Indian Wind Energy Association (INWEA)PHD House, 3rd Floor, Opp. Asian Games Village, August Kranti Marg, New Delhi - 110016, India Tel : 91-11-26523042E-mail : [email protected] Web site: http://www.inwea.org/
PowerMARCH
2013
![Page 35: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/35.jpg)
3535For updated information, please visit www.ibef.org
Glossary … (1/2)
→ CAGR: Compound Annual Growth Rate
→ FDI: Foreign Direct Investment
→ FY: Indian Financial Year (April to March)
→ So FY10 implies April 2009 to March 2010
→ GW: gigawatt
→ M&A: Merger and Acquisition
→ MW: Megawatt
→ NBFC: Non-Banking Financial Company
→ PE: Private Equity
→ PLF: Plant Load Factor
→ R&D: Research and Development
USEFUL INFORMATION
PowerMARCH
2013
![Page 36: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/36.jpg)
3636For updated information, please visit www.ibef.org
Glossary … (2/2)
→ R-APDRP: Restructured Accelerated Power Development and Reform Programme
→ T&D: Transmission and Distribution
→ TWh: terawatt-hour
→ RGGVY: Rajiv Gandhi Grameen Vidyutikaran Yojana
→ USD: US Dollar
→ Conversion rate used: USD1= INR48
→ Wherever applicable, numbers have been rounded off to the nearest whole number
USEFUL INFORMATION
PowerMARCH
2013
![Page 37: Power: Industry Report ,March 2013](https://reader033.vdocuments.net/reader033/viewer/2022051413/552b44484a795963588b4601/html5/thumbnails/37.jpg)
37
India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with IBEF.
All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF.
This presentation is for information purposes only. While due care has been taken during the compilation of this
presentation to ensure that the information is accurate to the best of Aranca and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice.
Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation.
Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.
For updated information, please visit www.ibef.org DISCLAIMER
PowerMARCH
2013
Disclaimer