Business Environment – Domain Study (Energy

Resources and Utilities)

Team Members:

1) Prakash Polly M.
2) Jaspal Singh
3) Chandra M Verma
4) Sachin Deshmukh
5) Anindya Kundu
6) S. Venkatasubramaniam

At the very onset we begin our study by identifying the key players in the Indian, Energy
Utilities Sector:
• NTPC
• TATA Power
• Reliance Infrastructure
• CESC
• Adani Power
• GMR Energy
• GVK Power & Infra
• Jaiprakash Power
• Jindal Power
• KSK Energy
• Lanco Infratech

The Current Scenario

XI PLAN
PLAYERS CEA COMPANY RECONCILIATION
ESTIMAT TARGET
E
NTPC 15440 22430 • Projects under construction and not
included by CEA includes Barh I
(660MW), Barh II (1,320 MW),
Mauda Maharashtra (1,000 MW),
and Nabinagar JV (250 MW).
• Projects pending award till
December 2008 stands at
3,760MW. NTPC has already
 invited bids for 3,000MW of back-
up projects to be commissioned by
FY12 and award is expected by
FY09 end.
TATA POWER 2990 3260 • Projects where FC achieved but not
considered by CEA includes:
120MW Haldia (COD of Mar-09),
240 MW Tata Steel CPP (COD of
Dec-08 for 120MW and Dec-09 for
another 120MW)
RELIANCE POWER 2520 2820 • 300MW CPP Nagpur project (FC
pending), not considered by CEA.
CESC 260 850 • Phase 1 (600 MW) of Haldia
project (FC Pending, 80% land
acquired) is not considered by CEA.
ADANI POWER 2640 6600 • Mundra project (2,640MW)
considered by CEA v/s company’s
target of 9,900MW by FY13
GVK POWER AND 1334 1554 • 220MW of Jegurupadu Phase 2
INFRASTRUCTURE (near completion, Gas supply
pending) not considered by CEA.
JAIPRAKASH 1000 1500 • 1,000MW of Karcham Wangtoo
POWER project to be completed in 11th
plan, CEA has not considered
500MW Bina thermal power project
(EPC award placed to BHEL)
LANCO 3051 3557 • Anapara C capacity considered at
INFRASTRUCTURE 1,000MW v/s 1,200MW by
company (FC achieved, under
const).Project not considered by
CEA includes 20MW Vamshi HEP
(FC achieved, under const),
500MW Sikkim HEP and 52MW
Uttaranchal HEP (DPR completed,
FC Pending).
TOTAL 29135 42571

The fallout of this delay lead to a bunching up of capacity addition in FY12 at

28,733MW, representing 36% of the planned capacity in 11th plan.
 ELEVENTH PLAN: REVISED CAPACITY ADDITION
TARGETS INDICATES BUNCHING UP IN FY12 (MW)
FY08 FY09 FY10E FY11E FY12E
Thermal Projects
Target 6,620 9,304 14,229 16,655 12,885
Feasible 6620 5773 11646 16572 20292

Hydro Projects
Target 2,423 1,097 1,805 1,741 8,561 RECENT DELAYS
Feasible 2423 1097 1805 1741 8441 LEADING TO
BUNCHING UP OF
Nuclear Projects
CAPACITY ADDITION
Target 220 620 2,000 500 0
Feasible 220 620 2000 500 0
IN FY-12
Total Projects
Target 9,263 11,021 18,034 18,896 21,446
Feasible 9263 7490 15451 18813 28733

 6% of 11th plan capacity addition is targeted in FY12, increasing possibility of

delay.

Key Concerns

 Power generation YTD at 93% of target, PLF down 340bp YoY: Power
generation during April – November 2008 stands at 480BUs, vs. target of
514BUs, an achievement of just 93%. PLF during April – November 2008 stands
at 74.6%, vs. target 78% and 76.6% during April – November 2007. The decline
in PLF is largely due to issues in terms of coal availability and also grid
restrictions.
 High base, peak deficits leading to increased power tariffs: During April –
November 2008, base deficit stands at 11.3%, vs. 10.4% YoY, while peak deficit
stands at 14.3% vs. 12.9% YoY. The key reasons for increased base and peak
deficits are
1) Significant delays in terms of generation capacity additions,
2) Regional imbalances,
3) Latent gap in demand-supply, and
4) Lower hydro generation in 1HFY09 vs. FY08 (flood like situation).
Western region has been severely affected with highest base and peak deficit of
17.1% and 21% for April – November 2008, respectively. Short term trading
prices for power have increased on the back of increasing base and peak deficits.
Weighted average prices have increased from Rs3.2/unit in FY06 to Rs4.4/unit in
FY08 and Rs7.02/unit in 2QFY09.