Description
This is a presentation about the in depth analysis of power sector in India.
POWER SECTOR ANALYSIS
CURRENT SCENARIO OF INDIAN POWER SECTOR:
India has the fifth largest electricity generation capacity in the world ? Low per capita consumption at 606 units ? Current installed transmission capacity is only 13% of the total installed generation capacity ? The total installed capacity in India is 145,554 MW, 52.5% State 34%-Centre, and 13.5%-Private sector initiative. ? 100% FDI permitted in Generation, Transmission & Distribution
?
IMPORTANT REFORMS:
?
? ?
?
?
? ? ?
Since planned development began in 1950,power sector is getting 18-20% of the total Public Sector outlay THE ELECTRICITY ACT( 2003) Removed the need for license for generation projects Encouraged competition through international competitive bidding Invited a wider public and private sector participation among other things NATIONAL TARIFF POLICY OF 2006 Encouraged private investment in the transmission sector Allocation of captive coal blocks to private companies, increasing the fuel security for the end use project.
DEMAND AND SUPPLY SENARIO :
Plant Load Factor is a measure of the actual output of a power plant compared to the maximum output it can produce
It is estimated that for every MW of additional generation, the following investment is required: • Generation Rs 40 million (£0.6m) • Transmission Rs 20 million (£0.3m) • Distribution Rs 20 million (£0.3m)
PORTERS MODEL:
Power of buyers (medium) ? Low bargaining power of industrial consumers due to limited no. of power suppliers ? Low bargaining power of retail consumers due to limited regulatory power of government Power of suppliers (High) ? Dominant role of coal suppliers due to limited supply ? Imported coal is very expensive Threat of new entrants (low) ? Highly capital intensive ? Stringent regulatory norms ? Transmission and distribution segments are largely state monopolies Threat of substitutes (Medium) ? Non-thermal power generators are on the rise ? Coal reserves are limited ? Hydropower, wind energy, nuclear power etc reduce GHG emissions Competitive rivalry (Medium) ? As demand exceeds supply, competitive rivalry is minimal ? With govt. approval, private players are entering gradually to tap the huge demand for power ? The Electricity Act 2003 aims to encourage investments, thereby increasing competition
IMPACT OF THE ECONOMY ON THE POWER
SECTOR Positive correlation between the GDP Growth rate and the growth in Power Generation ? India is currently facing acute shortage of power ? Most likely demand for power will increase ? India needs to add power generation capacity commensurate with this pace
?
Company Name Adani Power BF Utilities CESC Guj Ind Power GVK Power IndiaBPower Jaiprakash Pow JSW Energy KSK Energy Vent
Last Price 74.6 372.35 252.7 70.5 10.31 9.98 34.75 40.4 56.85
Change -1.15 4.45 3.85 0.65 -0.21 0.28 0.15 0.3 0.85
% Change -1.52 1.21 1.55 0.93 -2 2.89 0.43 0.75 1.52
Net Profit 523.75 -4.13 488.4 162.95 68.29 9.66 165.11 885.61 33.5
Market Cap 16263.06 1402.55 3184.02 1066.32 1628.17 2019 9121.03 6625.82 2118.4
Neyveli Lignite
NHPC NTPC Power Grid Corp Reliance Infra Reliance Power SJVN Tata Power Torrent Power
72.15
22.75 155.75 97.65 407.55 91.7 21.25 93.75 199
-0.7
0.2 -0.65 -1.65 5.95 2.1 -0.15 -2.2 -1.45
-0.96
0.89 -0.42 -1.66 1.48 2.34 -0.7 -2.29 -0.72
1298.33
2166.67 9102.59 2696.89 1080.91 274.55 912.13 941.49 1065.72 (Rs. cr)
12104.67
27984.19 128423.11 45209.27 10745.88 25723.01 8790.33 22247.55 9401.72
Company Name Adani Power BF Utilities CESC
PBDIT 1320.97 5.89 1226.13 12.63 319.24 88.34 13.03 750.37 1642.07 142.53 2096.26 3554.15 15231.39 7783.52
PBDIT as % of net sales 62.71 36.43 30.82 26.86 29.62 206.55 1737.33 101.83 42.52 134.5 53.12 84.12 27.72 92.79
Energy Dev
Guj Ind Power GVK Power IndiaBPower Jaiprakash Pow JSW Energy KSK Energy Vent Neyveli Lignite NHPC NTPC Power Grid Corp Reliance Infra SJVN Tata Power Torrent Power
1690.91
1691.62 2082.29 1964.76
17.98
96.99 30.17 29.85
Company NTPC Power Grid Corp Adani Power NHPC
Debt 43188.24 40882.77 17346.06 14569.26 12381.17 6989.28 5469.06
% of Liability 41.85 55.44 67.62 31.34 71.79 34.81 45.33
Jaiprakash Pow
Tata Power JSW Energy Neyveli Lignite Reliance Infra CESC Torrent Power SJVN Reliance Power Guj Ind Power
4004.04
3969.29 3592.95 3059.5 1753.92 1554.05 1113.54 851.5 593.44 176.94 105.02 100.94
35.45
11.17 34.93 35.57 28.59 8.85 37.39 22.54 14.61 19.35 45.87 3.82
KSK Energy Vent
IndiaBPower Orient Green BF Utilities GVK Power
M&A DEALS
Energy and power grew 20.6% driven by BP and Reliance Industries M&A ? Indian-involvement M&A targeted energy & power companies bringing sector volume up 20.6% to USD 10.2 billion, from USD 8.5 billion in 1H 2010. ? The announced 30% stake acquisition of BP in 23 oil and gas blocks of Reliance Industries (valued at USD 9 billion) is the top deal in India-involvement so far. ? Reliance has recently invested in Shale gas fields in North America. More such deals are likely in the future and eastern companies look for wider portfolios and western companies look to distribute risk.
M&A DEALS
Other deals ? Suzlon Energy Ltd. acquired 14.4 per cent share of RE Power for USD 123.5 million in 2009. ? The other deal in power sector during the period was India’s GMR infrastructure acquired 100 per cent stake of Singapore based Island Power for an undisclosed amount. ? Merger of reliance Power and RNRL, deal valued at $11 billion.
INVESTMENT RECOMMENDATIONS
?
The investment climate is very conducive and the rush is phenomenal from both global and domestic investors
?
Electricity Consumption Per Capita (kWh) in India is 457 and rest of the world is 2516
Government Energy Strategy ? Full development of hydro potential. Hydro power irrespective of size, renewable source of energy. ? Domestic coal to remain primary source. Emphasis on Super Critical Plants and Clean Coal Technologies. ? Import of coal on moderate scale for coastal locations. ? Use of gas dependent on availability and price. ? Import of gas – LNG terminals. Gas pipelines from Western and Central Asia.
CHALLENGES FACED BY POWER SECTOR
OBTANING FINANCE: ? Ultra Mega Power Projects (UMPPs) each of which is 4000 MW. However, each UMPP costing above INR 16,000 Cr. INEFFICIENCY: ? The State sector is the least efficient. The private sector and Central utilities have clocked good efficiency rates.
CHALLENGES FACED BY POWER SECTOR
AVAILABILITY OF COAL: ? India has limited coal reserves, availability of domestic coal is a challenge due to various bottlenecks such as capacity expansion of Coal India ? Transportation of Coal
AGGREGATE COMMERCIAL AND TECHNICAL LOSSES: ? India’s AT&C losses are as high as 30% compared with 5-10% in the developed markets which means out of every 100 units produced, 30 are lost during transmission and distribution.
CHALLENGES FACED BY POWER SECTOR:
PROJECT EXECUTION DELAYS: ? Failed to meet targets - shortage of equipment by BHEL has been identified as a major cause of delay, inadequate preparedness of projects. LAND ACQUISITION AND ENVIRONMENT CLEARANCE: ? Bill relating to land acquisition has continued to face political opposition. It provides for acquisition by project development agencies to the extent of 70% ,with the balance to be obtained by the Government.
THANK YOU
doc_762027027.pptx
This is a presentation about the in depth analysis of power sector in India.
POWER SECTOR ANALYSIS
CURRENT SCENARIO OF INDIAN POWER SECTOR:
India has the fifth largest electricity generation capacity in the world ? Low per capita consumption at 606 units ? Current installed transmission capacity is only 13% of the total installed generation capacity ? The total installed capacity in India is 145,554 MW, 52.5% State 34%-Centre, and 13.5%-Private sector initiative. ? 100% FDI permitted in Generation, Transmission & Distribution
?
IMPORTANT REFORMS:
?
? ?
?
?
? ? ?
Since planned development began in 1950,power sector is getting 18-20% of the total Public Sector outlay THE ELECTRICITY ACT( 2003) Removed the need for license for generation projects Encouraged competition through international competitive bidding Invited a wider public and private sector participation among other things NATIONAL TARIFF POLICY OF 2006 Encouraged private investment in the transmission sector Allocation of captive coal blocks to private companies, increasing the fuel security for the end use project.
DEMAND AND SUPPLY SENARIO :
Plant Load Factor is a measure of the actual output of a power plant compared to the maximum output it can produce
It is estimated that for every MW of additional generation, the following investment is required: • Generation Rs 40 million (£0.6m) • Transmission Rs 20 million (£0.3m) • Distribution Rs 20 million (£0.3m)
PORTERS MODEL:
Power of buyers (medium) ? Low bargaining power of industrial consumers due to limited no. of power suppliers ? Low bargaining power of retail consumers due to limited regulatory power of government Power of suppliers (High) ? Dominant role of coal suppliers due to limited supply ? Imported coal is very expensive Threat of new entrants (low) ? Highly capital intensive ? Stringent regulatory norms ? Transmission and distribution segments are largely state monopolies Threat of substitutes (Medium) ? Non-thermal power generators are on the rise ? Coal reserves are limited ? Hydropower, wind energy, nuclear power etc reduce GHG emissions Competitive rivalry (Medium) ? As demand exceeds supply, competitive rivalry is minimal ? With govt. approval, private players are entering gradually to tap the huge demand for power ? The Electricity Act 2003 aims to encourage investments, thereby increasing competition
IMPACT OF THE ECONOMY ON THE POWER
SECTOR Positive correlation between the GDP Growth rate and the growth in Power Generation ? India is currently facing acute shortage of power ? Most likely demand for power will increase ? India needs to add power generation capacity commensurate with this pace
?
Company Name Adani Power BF Utilities CESC Guj Ind Power GVK Power IndiaBPower Jaiprakash Pow JSW Energy KSK Energy Vent
Last Price 74.6 372.35 252.7 70.5 10.31 9.98 34.75 40.4 56.85
Change -1.15 4.45 3.85 0.65 -0.21 0.28 0.15 0.3 0.85
% Change -1.52 1.21 1.55 0.93 -2 2.89 0.43 0.75 1.52
Net Profit 523.75 -4.13 488.4 162.95 68.29 9.66 165.11 885.61 33.5
Market Cap 16263.06 1402.55 3184.02 1066.32 1628.17 2019 9121.03 6625.82 2118.4
Neyveli Lignite
NHPC NTPC Power Grid Corp Reliance Infra Reliance Power SJVN Tata Power Torrent Power
72.15
22.75 155.75 97.65 407.55 91.7 21.25 93.75 199
-0.7
0.2 -0.65 -1.65 5.95 2.1 -0.15 -2.2 -1.45
-0.96
0.89 -0.42 -1.66 1.48 2.34 -0.7 -2.29 -0.72
1298.33
2166.67 9102.59 2696.89 1080.91 274.55 912.13 941.49 1065.72 (Rs. cr)
12104.67
27984.19 128423.11 45209.27 10745.88 25723.01 8790.33 22247.55 9401.72
Company Name Adani Power BF Utilities CESC
PBDIT 1320.97 5.89 1226.13 12.63 319.24 88.34 13.03 750.37 1642.07 142.53 2096.26 3554.15 15231.39 7783.52
PBDIT as % of net sales 62.71 36.43 30.82 26.86 29.62 206.55 1737.33 101.83 42.52 134.5 53.12 84.12 27.72 92.79
Energy Dev
Guj Ind Power GVK Power IndiaBPower Jaiprakash Pow JSW Energy KSK Energy Vent Neyveli Lignite NHPC NTPC Power Grid Corp Reliance Infra SJVN Tata Power Torrent Power
1690.91
1691.62 2082.29 1964.76
17.98
96.99 30.17 29.85
Company NTPC Power Grid Corp Adani Power NHPC
Debt 43188.24 40882.77 17346.06 14569.26 12381.17 6989.28 5469.06
% of Liability 41.85 55.44 67.62 31.34 71.79 34.81 45.33
Jaiprakash Pow
Tata Power JSW Energy Neyveli Lignite Reliance Infra CESC Torrent Power SJVN Reliance Power Guj Ind Power
4004.04
3969.29 3592.95 3059.5 1753.92 1554.05 1113.54 851.5 593.44 176.94 105.02 100.94
35.45
11.17 34.93 35.57 28.59 8.85 37.39 22.54 14.61 19.35 45.87 3.82
KSK Energy Vent
IndiaBPower Orient Green BF Utilities GVK Power
M&A DEALS
Energy and power grew 20.6% driven by BP and Reliance Industries M&A ? Indian-involvement M&A targeted energy & power companies bringing sector volume up 20.6% to USD 10.2 billion, from USD 8.5 billion in 1H 2010. ? The announced 30% stake acquisition of BP in 23 oil and gas blocks of Reliance Industries (valued at USD 9 billion) is the top deal in India-involvement so far. ? Reliance has recently invested in Shale gas fields in North America. More such deals are likely in the future and eastern companies look for wider portfolios and western companies look to distribute risk.
M&A DEALS
Other deals ? Suzlon Energy Ltd. acquired 14.4 per cent share of RE Power for USD 123.5 million in 2009. ? The other deal in power sector during the period was India’s GMR infrastructure acquired 100 per cent stake of Singapore based Island Power for an undisclosed amount. ? Merger of reliance Power and RNRL, deal valued at $11 billion.
INVESTMENT RECOMMENDATIONS
?
The investment climate is very conducive and the rush is phenomenal from both global and domestic investors
?
Electricity Consumption Per Capita (kWh) in India is 457 and rest of the world is 2516
Government Energy Strategy ? Full development of hydro potential. Hydro power irrespective of size, renewable source of energy. ? Domestic coal to remain primary source. Emphasis on Super Critical Plants and Clean Coal Technologies. ? Import of coal on moderate scale for coastal locations. ? Use of gas dependent on availability and price. ? Import of gas – LNG terminals. Gas pipelines from Western and Central Asia.
CHALLENGES FACED BY POWER SECTOR
OBTANING FINANCE: ? Ultra Mega Power Projects (UMPPs) each of which is 4000 MW. However, each UMPP costing above INR 16,000 Cr. INEFFICIENCY: ? The State sector is the least efficient. The private sector and Central utilities have clocked good efficiency rates.
CHALLENGES FACED BY POWER SECTOR
AVAILABILITY OF COAL: ? India has limited coal reserves, availability of domestic coal is a challenge due to various bottlenecks such as capacity expansion of Coal India ? Transportation of Coal
AGGREGATE COMMERCIAL AND TECHNICAL LOSSES: ? India’s AT&C losses are as high as 30% compared with 5-10% in the developed markets which means out of every 100 units produced, 30 are lost during transmission and distribution.
CHALLENGES FACED BY POWER SECTOR:
PROJECT EXECUTION DELAYS: ? Failed to meet targets - shortage of equipment by BHEL has been identified as a major cause of delay, inadequate preparedness of projects. LAND ACQUISITION AND ENVIRONMENT CLEARANCE: ? Bill relating to land acquisition has continued to face political opposition. It provides for acquisition by project development agencies to the extent of 70% ,with the balance to be obtained by the Government.
THANK YOU
doc_762027027.pptx