Market Research India - Power Sector Market in India 2009

Power Sector ‐
Power Sector India
March 2009

Executive Summary

 India has 5th largest electricity generation capacity in the world
Market  The installed capacity of India as of July 2008 was 145,587 MW
Overview &  India is facing acute power deficit with peak power deficit of about 16%
Value Chain
Value Chain PPower trading is still at nascent stage with merely 3.5% of the power generated traded in 2007‐08
t di i till t t t ith l 3 5% f th t d t d d i 2007 08
 Distribution is primarily controlled by state electricity boards (SEBs)
 Government policies are aimed at encouraging investment in the sector and increasing the
competition
Government
Government
 Government allows 100% FDI under the automatic approval route in all segments of the industry
Policies & (except atomic energy)
Incentives  5‐year tax holiday is given for power generating projects
 Import duty at the confessional rate of 20% has been set for import of equipment

 Key Trends: Increase in per capita consumption of electricity, Increase in corporate investments,
Increase in FDI, increasing interest shown by PE/VC firms in power sector and surge in captive
Key Trends & production
Challenges
 Challenges: Shortage of coal, power loss in transmission and distribution, ageing and improperly
Challenges: Shortage of coal, power loss in transmission and distribution, ageing and improperly
maintained infrastructure
 Public sector undertakings LIKE NTPC, MHPC hold the majority of the total installed capacity
 Private players including Reliance, Tata Power, Torrent Power have presence across value chain
Competition and making significant investments in power sector
and making significant investments in power sector
 Foreign players like CLP, Marubeni Corporation have entered/planning the India power market

POWER SECTOR – INDIA.PPT 2

• Introduction
• Power Sector – Overview
• Value Chain Analysis
• Government Policies and Initiatives
• Key Trends & Challenges
• Competitive Landscape
y p
• Key Developments
• Appendix


India is among the top electricity generating countries in the
world
Introduction Region – Wise Installed Capacity
• India ranks sixth largest energy consumer in
the world
• India consumes 3.7% of the world’s
commercial energy
• Electricity is the backbone of the nation and North
falls under the Concurrent List where both the
falls under the Concurrent List where both the 38,155 MW
North‐East
h
Union and State Government can regulate the 2,255 MW

sector East
20,816 MW
• Country is divided into five regions for Western
transmission systems:
transmission systems: 44, 628 MW
44, 628 MW

0 10,000 20,000 30,000 40,000 50,000
MW
North 38,156
West South
44,628
44 628
39,656 MW
South 39,656
East 20,816
*As on 31‐07‐08
North‐East 2,255
,


• Introduction
• Government Policies & Initiatives
y p
• Appendix


Installed capacity has been increasing continuously to meet the
need of growing economy..
Supply Side Plan‐wise Installed Capacity
• India has 5th largest electricity generation capacity in MW
the world 140,000
126,082
• Installed capacity of 145,587 MW as of July 2008 120,000
Nuclear Renewable 104,917
Gas‐based 8% 100,000
85,902
10% 80,000 69,480
3%
Hydel power
Hydel power 25%
60,000
64% Plan
Thermal VII VIII IX X

Demand Side Current and projected demand
• Demand for power is growing at 8‐10% per annum MW bn units
Energy Required
• Demand has five key components: 250,000 Planned Demand 1,500
212,725
 Industry, commercial, residential, agriculture, and others
200,000
• Key drivers of increasing demand are growth in:
y g g 157,107
, 1,000
1 000
 Household consumption 150,000
115,705
 Electrification of rural areas 100,000
500
 Manufacturing growing faster
50,000
 Realization of suppressed demand due to load‐shedding
• Required investment of ~USD 600 bn by 2017 0 0
X XI XII


.. but India still facing acute demand supply gap

Demand Supply Gap
• Power supply position characterized by shortages ‐ both in terms of demand met during peak time and overall
energy supply
• Peak power deficit in India is about 16% and is expected to rise to 20% by 2017
• Demand supply gap is more than 16%
Actual Power Supply Position during 2006‐07 (End of Xth Plan)

Peak Energy
Requirement Availability Shortage Shortage (%) Requirement Availability Shortage Shortage (%)
100,715 MW 86,818 MW ‐13,897 MW ‐13.8% 690,587 MU 624,495 MU ‐66,092 MU ‐9.6%

Peak Shortages
P k Sh t Energy
E
(%) BU
20 800

15 600

10 400
Average Energy Demand
5 200
Generation
0 0 Plan
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 VI VII VIII IX X


• Introduction
y p
• Appendix


Public sector companies or State Electricity Boards (SEB) have
presence across the value chain
Raw
materials

Generators • Power generation depends on coal, gas, nuclear and hydroelectric sources
• Coal accounts for 50% of the generation capacity

• Power trading company buys power from surplus area and sells it in deficit
Power trading company buys power from surplus area and sells it in deficit
Traders
area using and transfers power through transmission lines
• Power trading is at a very nascent stage in India

Transmission • Transmission of electricity involves bulk transfer of power over a long
distance at high voltage (132kV and above)

Distribution • Distribution involves supply of power to end consumers
• It also includes billing and collection services

End user
End user


Power generation capacity has increased over the years
Generation Trading Transmission Distribution

Generation ‐ Overview Power Generation Growth
• Power generation increased from 662.5 bn BU
Nuclear
units (BU) in 2006‐07 to 704.5 BU in 2007‐08 800
Hydro 704
• The electricity generation target for the year 700 Thermal
659 2%
616 3%
2008‐09 has been fixed at 774.4 BU : 600 558
587 3% 18%
3% 17%
 Thermal ‐ 631.3 BU 3% 14% 16%
500 13%
 Hydro ‐ 118 5 BU
Hydro 118.5 BU 80%
400 83% 81% 80%
 Nuclear ‐ 19.0 BU 84%
 Import from Bhutan ‐ 5.6 BU 300
2003-04 2004-05 2005-06 2006-07 2007-08
• State accounts for a large share of installed
capacity (53%), followed by central (34%) and
capacity (53%) followed by central (34%) and Plant Load Factor
Plant Load Factor
private sector (14%) %
• The plant load factor (PLF) of generating 80 78.6%
plants has improved consistently over the last 78 76.8%
few years
f
76
74.2% 74.0%
74 72.7%
72
70
2003-04 2004-05 2005-06 2006-07 2007-08


Power trading is still at nascent stage in India
Generation Trading Transmission Distribution

Trading ‐ Overview Market Share Power Trading (2007‐08)
• Merely 3.5% of the power generated in 2007‐08 was Adani Power
traded in India 6%
 Power Trading Corporation of India (PTC) was the first
Power Trading Corporation of India (PTC) was the first
Others
company to start with trading o f power 22%
 Out of the 42 licenses issues in 2004, only 13 of the 46% PTC
licenses actually traded in 2007‐08
 Current norms require an applicant to have net worth of Tata Power
10%
Rs 1.5 crore for allotment of license, which gives him the
right of power trading of up to 100 mn KWh 16%
• Online trading in India started with Indian Energy
NTPC Vidyut Vyapar Nigam
Exchange (IEX), launched in June, 2008
 Financial Technologies is the major stakeholder with 90%
share Volume of Power Transacted
• Second power trading exchange, Power Exchange
India ltd (PXI), was launched in October 2008
 PXI is promoted by National Stock Exchange of India Ltd Total Energy Market Clearing Prices
(NSE) & National Commodities & Derivatives Exchange Ltd Exchange Transacted (till 05‐
(NCDEX) 12‐2008) Maximum Minimum
• In order to promote trading, power regulators will IEX 1470.30 MU INR 11.00 INR 0.92
review in 2009 the 4‐paise‐a‐unit cap on power
trading margins PXI 26.96 MU INR 11.00 INR 3.00
 Weighted average purchase price and sales price of
power in 2007‐08 were INR 4.48 a kWh and INR 4.52 a
kWh, respectively
k h i l


Transmission & Distribution network of India is the third largest
in the world Generation Trading Transmission Distribution

Transmission ‐ Overview Transmission Network
• Current transmission capacity is 143,000 MW and ckm
inter‐regional power transfer capacity of 17,000 MW 400,000
• MoP plans to establish an integrated National Power 325,000
325 000
300,000 265,000
Grid in the country by 2012 with 200,000 MW of
Grid capacity and 37,700 MW of inter‐regional 200,000 172,000
power transfer capacity
100,000 67,000
• Government is encouraging private sector
Government is encouraging private sector
2,700
participation in transmission sector 0
 Transmission sector is 100% opened for private 1950 1970 1990 2008 2012
participation on a Build, Operate and Transfer (BOT) basis
 Currently, private sector participation in transmission
projects is in the form of JV with Power Grid Corporation
Proposed Investments in Transmission
Proposed Investments in Transmission *
of India Ltd (PGCIL)
• The Planning Commission of India expects
USD bn Center State Private Total
investments worth USD 25 bn (INR 1,292 bn) for
transmission in XIth Plan against a target plan
g g p Inter‐State 12.3 0 4.0 16.3
estimate investment of USD 9 bn (INR 457 bn) in Xth Intra‐State 0 10.9 3.0 13.9
Plan
 Planning Commission has taken a 15% cut on the initial Total 12.3 10.9 7 30.2
estimates in XIth Plan, which was USD 30.2 bn (INR1,520 *Planned investments before 15% cut
bn)


SEBs control the distribution with the presence of few private
players Generation Trading Transmission Distribution

Distribution ‐ Overview Aggregate Technical & Commercial Losses
• Distribution of electricity is controlled by State
Electricity Boards (SEBs) %
• Few private players like Reliance and Tata are also
Few private players like Reliance and Tata are also 40 38 9%
38.9% AT&C Losses
present in electricity distribution 36.6%
34.9% 34.8% 35.2%
 Distribution licenses of several cities are with private 35 33.1%
sector players
• Distribution system in India is characterized by high 30
Aggregate Technical and Commercial (AT&C) losses
A t T h i l dC i l (AT&C) l
 AT&C losses are declining but still on higher side 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
compared to other countries
 Most of the technical losses are due to poor transformers,
improper load management, pilferage, low voltage Billing and Collection Efficiency
distribution lines etc
distribution lines etc
• Distribution sector is also crippled with poor billing Collection Efficiency
and collection efficiency %
Billing Efficiency
• A reduction in T&D losses by 1% point is estimated 100 95.2% 93.9% 93.0% 94.2%
to be equivalent to power generated from a 600‐700 90.9% 92.7%
MW plant
MW plant 90
• Government introduced the APDRP (Accelerated
80
Power Development and Reforms Program) to fund 71.0%
69.5% 69.7%
investments and also offer incentives for efficiency 70 67.3% 68.4% 68.4%
improvements
• Government plans to invest Rs 287,000 crore in 60
power distribution in XIth Plan 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07


• Introduction
y p
• Appendix


Government has been taking positive steps by introducing new
policies and regulations..
Policies (1/2)
• Accelerated Power Development and Reform Program (APDRP) launched in
2001 with the objective of:
j
 reducing T&D losses to 15% in five years in urban and high density areas
APDRP  reducing power outage and raising collection efficiency
• Restructured to achieve the objective of 15% loss by end of the XI 5‐year Plan
• Central government has earmarked an outlay of INR8 billion for APDRP for FY09

• Removed/reduced entry barriers
 De‐licensed generation
Electricity Act  Freedom to captive generation
2003 RRecognized trading as an independent activity
i d di i d d i i
 Open access in transmission already in place
• Multiple licenses in distribution

• Total village electrification by 2010
l ll l f b
National • Access to Electricity Available for all households in next five years
Electricity Policy • Per capita availability of electricity to be increased to over 1000 units by 2012
2005 • Full development of hydro potential of the country
• Development of National Grid


.. and giving better incentives to encourage investment in power
sector
Policies (2/2)

• Tariff of Generation and Transmission Projects in Private Sector determined
through competitive bidding
through competitive bidding
Tariff Policy 2006 • Reduction of cross subsidy to ± 20% of average tariff in next five years
• Facilitating Open Access in Distribution
• Time‐bound introduction of Multi Year Tariff

Incentives
• 100% foreign equity participation is allowed under the automatic approval route in all segments of the industry
100% foreign equity participation is allowed under the automatic approval route in all segments of the industry
(except atomic energy)
• Generation and distribution power projects of any type and size are allowed
• A renewable license period of 30 years has been set
• Return on equity up to 16% is assured at 68.5% PLF for thermal power plants. Similar incentives are provided for
Return on equity up to 16% is assured at 68.5% PLF for thermal power plants. Similar incentives are provided for
hydroelectric power projects
• Import duty at the confessional rate of 20% has been set for import of equipment
• The government allows a 5‐year tax holiday for power generating projects with an additional five years in which a
p
deduction of 30% taxable profits is allowed


Public Private Partnership (PPP) model is not witnessing much
activity compared to other sector in infrastructure
PPP Model ‐ Overview
• India has around 300 projects under the public private Airports Railways
partnerships in infrastructure Energy
1%
• The power sector in India has not witness much PPP 11%
activity as compared to other sectors Urban Development 2%
12%
 Power sector witnessed investments worth USD 3.5 bn
• Government is encouraging PPP model to meet the 62%
13% Road
capacity addition target of 78,700 MW in XIth Plan
i ddi i f 78 700 MW i XI h Pl Ports
 Government plans to promote PPP model in ash utilization,
augmentation of transmission lines and distribution

Types of public private partnerships in India

Ultra Mega Power
Distribution Franchisee
Projects (UMPP)


Government prefer distribution franchisee model compared to
complete privatization of SEBs in India
Distribution franchisee

State Power Distribution
End User
Corporation Franchisee
Sell power to Franchisee distribute at
Franchisee price prescribes by SEC

• The distribution franchisee agreement is based upon a contract under which the distribution assets stay
The distribution franchisee agreement is based upon a contract under which the distribution assets stay
under State control while private player is involved in efficiently distributing electricity in particular region
• Power utilities follow revenue‐based model in which franchisee is responsible for all obligations of
distribution license in the franchisee area viz :
 Supply of power
pp y p
 Consumer service
 Operation and maintenance of distribution network
 Billing and collection
 Compliance with regulatory standards
• A total of 14 States, including Uttar Pradesh, Bihar, Orissa, West Bengal, Haryana, Andhra Pradesh, Karnataka
and Gujarat, have appointed franchisees for different zones
• Crompton Greaves has been awarded 3 major divisions in Nagpur by the Maharashtra State Electricity
Distribution Company under this model


Private players bidding for Ultra Mega Power Projects proposed
by the government
Ultra Mega Power projects
• MoP plans to set up Ultra Mega Power projects through private sector participation with capacity of 400 MW each
• UMPP the projects are build on BOO (Build‐Own‐Operate) basis through tariff based competitive bidding route
• Bidders are finalized on tariff based competitive bidding and takes over Special Purpose Vehicle (SPV) from Power
Finance Corporation (PFC)
• PFC is the nodel agency for setting up the SPV for any project
• Projects to use supercritical technology based on pithead (captive block) or imported coal (coastal)
• Full exemption of central excise duty on goods procured under supercritical technology
• The identified projects are –
 Five coastal site projects:‐ Mundra in Gujarat, Krishnapatnam in Andhra Pradesh, Tadri in Karnataka, Girye in Maharashtra, and
Cheyyur in Tamil Nadu
FFour pithead site projects:‐ S
ith d it j t Sasan in Madhya Pradesh, Tilaiya in Jharkhand, Sundergarh district in Orissa and Akaltara in
i M dh P d h Til i i Jh kh d S d h di t i t i O i d Ak lt i
Chhattisgarh


• Introduction
y p
• Appendix


Key Trends

Increase in per capita
consumption
p

Increase in captive
Increase in captive Increase in domestic
Increase in domestic
power production investments
Trends

PE firms showing
Increase in FDI
Increase in FDI
interest in power sector


Power sector witnessing increase in per capita electricity
consumption and corporate investments
Increase in per capita electricity consumption
• India's per capita consumption of electricity has increased steadily over a period but still
insignificant compared to the rest of the world National Electricity
Policy expects the per
Kwh Kwh capita electricity
15,000 consumption to reach
800 15,000
1000 Kwh by 2012
704
672 10,000
700 632
595 613
600 567 5,000
5 000
1,800
704 2,300
500 0 World Average
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 US China India

Increase in domestic investments
Increase in domestic investments
• Indian power sector has attracted USD 38 bn (INR 1.95 tn) in investments in the H12008
(Jan – June) Positive government
• Power sector attracted 30% of the total corporate investments policies encouraging
corporate investments
corporate investments
USD b
bn
in power sector
38.0
40
29.9
21.4 17.7 17.6
20

0
Power Realty Steel Retail Telecom


Foreign Direct Investments (FDI) and private equity (PE)
investments surging
Increase in FDI
• 100% FDI is allowed in all segments of power sector including trading
• Foreign players can invest in Hydro Projects, Captive Power, Ultra Mega Power Projects,
Foreign players can  invest in Hydro Projects, Captive Power, Ultra Mega Power Projects, Power sector is
Nuclear Power, National Grid Program, Rural Electrification, Trading, Renewable energy witnessing  increase in
investments by the
USD mn foreign players
967.0
1,000
594.0
500
87.0 157.0
0
2005-06 2006-07 2007-08 2008-09 *
PE firms showing interest in power sector
• Reforms in the power sector attracting large global PE firms to invest in power sector
Global investors
• PE investments increased , both in volume and value investing in
 PE  firms make up 59% of the total deals (M&A and PE investments) in 2008 in power sector with alternatives fuels and
majority of deals in renewable energy ** energy segments in
USD mn India
I di
900
1,000 682 20 Number of deals
500 113 10 Deal Amount
0 0
2006 2007 2008
Note: * From April 2008 – November 2008
** Complete list of PE deals in Appendix III


Captive power production becoming an attractive option for the
manufacturers
Increase in captive power production
• Electricity Act 2003 liberalized captive power generation in order to meet the energy
Manufacturers
shortages and enable cost effective power supply to manufacturing sector
g p pp y g increasing captive
increasing captive
 Act allows captive power producers to sell excess capacity to others power production as
 Group captive power plants also allowed to enable small medium industries and cooperatives sale of surplus
becomes easier
• Captive power generation is attractive to manufacturers as they can generate power at
prices 25‐80% cheaper than power from the grid
• The captive power plant players can sell surplus electricity to
 State electricity board through 15‐25 year power purchase agreements (PPAs)
 Online electricity trading platform like IEX or PXI
• Free capacity from captive plants is connected to the grid to meet the country’s energy
requirements
i
 In 2005, 14,636 MW was connected to grid, while in 2006 14,866 was connected to grid
MW
40,000
31,000
,
30,000 24,600
18,740 19,485
20,000

10,000

0
Mar-05 Mar-06 Mar-07 Mar-12


Challenges

Inability to meet the capacity
Shortage of coal
addition targets

Challenges

Ageing and improperly‐ Huge power loss in transmission
maintained infrastructure and distribution


Government has failed to meet the capacity addition targets set
in Five Year Plans
Inability to meet the capacity addition targets
• Actual capacity additions have substantially lagged the planned capacity additions in the
past 5 Year Plans Government inability
 Eighth Five Year Plan (1992‐1997) – 54% implemented meet power capacity
 Ninth Five Year Plan (1997‐2002) – 48% implemented targets is widening the
 Tenth Five Year Plan (2002‐2007) ‐ 51.5% implemented demand‐supply gap
• Capacity addition of 21,180 MW was achieved in Xth against the target of 41,110 MW
• S
Some of the reasons for the slippage of projects were ‐
f th f th li f j t
 Delay in supplies/erection by suppliers/ contractors
 Delay in tie‐up for super critical technology
 Non‐availability of Gas
 Delay in clearance/investment decisions (Hydro Projects)
y / ( y j )
 Hydro Project delayed due to delay in environmental clearance, natural calamities, delay in signing of
MoU
 Law & Order Problems

Summary of capacity addition during Xth Plan
Summary of capacity addition during Xth Plan
Original Target 41,110 MW
(‐) Net capacity additions from original target 19,829 MW
()
(‐) Net capacity addition from additional projects
p y p j 1,351 MW
Capacity slipped/Dropped 21,281 MW


Power plants facing coal shortages while distribution companies
facing huge T&D losses
Shortage of Coal
• Some of the India’s 77 coal‐based stations totalling 70,000MW are facing severe coal
shortages Coal supply shortages
• Power utilities are expected to face shortage of 66 mn tonnes of coal by end of 2011‐12 due to inability to keep
due to inability to keep
imports in line with
 Total coal requirement is 448.5 mn tonnes in 2011‐12 while the indigenous coal availability from
targets or problems in
Coal India and subsidiaries during the is estimated at 382.4 mn tonnes
Coal India Ltd
• Coal shortages are either due to inability of power utilities to import coal in line with its
target or law and order problems at subsidiaries of Coal India Ltd
target or law and order problems at subsidiaries of Coal India Ltd
• The current peaking shortages of 14% and energy shortages of 8% could worsen because
of coal shortages

Huge power loss in transmission and distribution
• Average transmission and distribution losses (T&D) exceed 30% of total power generation
compared to less than 15% for developing economies
High T&D losses results
• Huge T&D losses impacting the financial health of the power utilities with majority of
in lower effective
them having negative rate of return realization of per unit
realization of per unit
• Significant proportion of loss is non‐technical, primarily due to theft of electricity of power produced
• Weak T&D system is due to lack of government focus on expanding T&D network
 Ratio of investment in generation to T&D is 2:1 in India compared to 1:1 or more in developed
countries
• Ratio of low‐tension (LT) and high‐tension (HT) has increasing significantly, resulting in
higher share of low‐voltage lines and high T&D losses


Power equipments used in generation and transmission of
electricity not well maintained
Ageing and improperly‐maintained infrastructure
• Network infrastructure has failed to grow at the pace of load growth
• Most of the network equipments including power transformers, distribution Poor quality and
transformers, 33 kV lines, 11 kV feeders and LT networks are old and overloaded ageing power
ageing power
equipments impacting
• Lack of proper maintenance is further worsening the health of the equipments. quality and reliability
• Distribution companies are spending huge amount in replacing burnt equipments of power supply


• Introduction
y p
• Appendix


Majority of the installed power capacity in India with public
sector undertakings
Public Sector Players

Company Name Generation Transmission Distribution Revenues EBITDA Total Capacity
(FY2007‐8) (FY2007‐8)
National Thermal Power Corp
 USD 9.6 bn USD 2.9 bn 29,144 MW

National Hydro Electric Power Corp
 USD 780 mn USD 545 mn 2,755 MW

Nuclear power Corp. of India Ltd
p p  USD 1.05 bn
USD 1.05 bn USD 584 mn
USD 584 mn 4,120 MW
4,120 MW

Power Grid Corporation Of India  USD 1.07 bn USD 961 mn

Power Trading Corporation of India
 USD 957 mn USD 5.2 mn

• National Thermal Power Corporation (NTPC) is the si th largest thermal po er prod cer in the orld and India’s
National Thermal Power Corporation (NTPC) is the sixth largest thermal power producer in the world and India’s
largest power producer. It accounts for 20% of the country’s installed capacity. NTPC plans to invest up to USD 36 bn by
2012 to transform itself into an integrated regional energy player and have an installed capacity of over 50,000 MW
• National Hydro Electric Power Corp (NHPC) plans to increase the power generation capacity to over 10,000 MW by
2011–12
0
• Nuclear Power Corporation of India Ltd. (NPCIL) has 5 plants under construction adding 2660MW by 2012
• Power Grid Corporation of India Ltd (PGCIL) is responsible for inter‐state transmission of electricity. The company
reported revenue of USD 1.1 bn in FY2007‐08
• Power Trading Corporation of India (PTC) is the Government of India initiated public private partnership, formed for
Power Trading Corporation of India (PTC) is the Government of India initiated public private partnership, formed for
the purpose of trading of power


Many private players investing in power sector with presence
across the value chain
Domestic Private Players
Company Name Generation Transmission Distribution Revenues EBITDA Total
(
(FY2007‐8)
) (FY2007‐08)
( ) Capacity
p y
Tata Power    USD 1.9 bn USD 340 mn 2323 MW

CESC Ltd   USD 880 mn USD 120.5 mn 975 MW

Reliance Infrastructure    USD 1.7 bn USD 119 mn 941 MW

Gujarat Industrial Power Corp.  USD 232 mn USD 63 mn 560 MW

Lanco Infratech Ltd  USD 797 mn USD 175 mn 523 MW

Torrent Power    USD 899 mn USD 137 mn 500MW

Jaiprakash Hydro Power Ltd USD 74.7 mn USD 68.5 mn 300 MW
• Some of the other significant private players in power sector include:
 Kalpatru Power Transmission Ltd is design, testing, fabrication, erection and construction of EHV transmission
lines. The company has annual production of 62,450 MTs and reported revenues of USD664 mn in FY2007 08
lines. The company has annual production of 62,450 MTs and reported revenues of USD664 mn in FY2007‐08
 KEC International Ltd is power transmission engineering, procurement and construction company with annual
production of 113,000 MTs . The company reported revenues of USD 699 mn in FY2007‐08
 Auro Mira Energy is power generation company involved in BioMass, Hydel and Wind sectors. Planned reach of
1000MW by 2012
 DPSC Ltd is involved in power distribution and generation in Asansol‐Raniganj coal belt in West Bengal


Foreign players also showing interest in Indian power sector

International Players
Company Name Generation Transmission Distribution Revenues Total Capacity
(FY2007‐8)

China Light & Power (CLP)
 USD 320 mn* 655 MW

Marubeni Corporation  n.a. 347 MW
Note: * Revenues from India
Note: * Revenues from India

• China Light & Power (CLP): CLP Power India Private Ltd, a subsidiary of China Light and Power Ltd (Hong Kong) is the
largest foreign investor in the Indian power sector
• Marubeni Corporation: Marubeni is very active in power sector for both EPC (Engineering, Procurement and
Construction) type of projects as well as IPP (Independent Power Producer) type of projects
) f ll ( d d d ) f
• Many other foreign players planning to enter Indian power generation market including:
 Ranhill Berhad (Malaysia)
 Tronoh Alco (Malaysia)
 Israel Electric Corporation (Israel)
 Korea Electric Power Company (South Korea)
 Khanjee Holding Inc (US)


• Introduction
y p
• Appendix


Key Developments

Date Development
14‐Feb‐2009 NTPC and Nuclear Power Corp. will spend as much as USD$3 bn to build new atomic plants in the next eight years
11‐Feb‐2009 The power regulator Central Electricity Regulatory Commission (CERC) will come out with new trading regulation for the
country in March 2009.
country in March 2009
28‐Jan‐2009 Reliance Industries scrapped a INR 1,500 crore captive power plant after the government decided to allocate gas from its
eastern offshore fields to existing power and fertiliser plants only. RIL had proposed to set up a 345 MW power plant at
Nagothane in Maharashtra for captive use and was wanting to pipe its KG basin gas to the plant
27‐ Dec‐ 2008 Jindal Power announced today that will raise INR 7,000 crore in the next one year from both, domestic as well as
international sources to fund its thermal power project in Chhattisgarh.
01‐Nov‐2008 Power Trading Company India (PTC India) is looking at picking up stakes in power generation projects across the country.


• Introduction
y p
• Appendix


Appendix I – Power Sector Structure in India

Central State

Policy Ministry of Power
State Government
Plan CEA

Regulations CERC SERC

Generation Central Generating Units GENCOs IPPs

Transmission CTU STU
Some private
System operations NRLDC RLDC SLDC players in
generation &
Distribution distribution
Distribution
Licencee

Trading Trading Licencee Trading Licencee

Appeal
pp Appellate Tribunal
pp Appellate Tribunal
pp


Appendix II – Planned Capacity Additions for 11th Plan

Plan Capacity Additions (MW) – 11th Five Year Plan
Central State Private Total

Thermal 24,840 23,301 11,552 59,693
Hydro
H d 8,654
8 654 3,482
3 482 3,491
3 491 15,627
15 627
Nuclear 3,380 0 0 3,380
Total Utility 36,874 26,783 15,043 78,700
Renewables NA NA NA 14,000
Grand Total 36,874 26,783 15,043 92,700


Appendix III – PE Deals in India

Investor Investee % Stake Investment
Value in USD
Darby Overseas Investments Ltd Bhoruka Power Corporation Ltd N.A. 17.50 mn
DE Shaw
DE Shaw Soham Renewable Energy India
Soham Renewable Energy India N.A.
NA 15.00 mn
15 00 mn
Farallon Capital Indiabulls Power Services 23.40% 246.88 mn

LNM India Internet Ventures Indiabulls Power Services 14.10% 148.13 mn
State Bank of India and ICICI Bank Jaiprakash Power Ventures 3.005 100.00 mn
NYLIM Jacob Ballas India Fund III Saravana Global Energy Ltd N.A. 25.00 mn
Mayfield Fund Servomax India N.A. 3.75 mn
Orient Global Tamarind Fund Pte Ltd Cairn India Ltd 2.60% 278.69 mn
First Reserve Corporation
First Reserve Corporation Kenersys N.A.
NA N.A.
NA
Dubai Investment Group Chiranjeevi Wind Energy Ltd. 40.00% N.A.
Nexus India Capital SEDEMAC Mechatronics Pvt Ltd N.A. N.A.
Kleiner Perkins Caufield & Byers, Sherpalo Ventures and Applied Materials Kotak Urja Pvt Ltd N.A. 8.00 mn
Olympus Capital Holdings Asia, Shriram EPC and Bessemer Venture Orient Green Power Ltd N.A. 55.00 mn

Acumen Fund SBA Hydro & Renewable Energy N.A. 1.26 mn
Acumen Fund D.light Design N.A. 1.00 mn
Helion Venture Partners andFoundation Capital
Helion Venture Partners andFoundation Capital Azure Power
Azure Power N.A.
NA N.A.
NA


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Market Research India - Power Sector Market in India 2009

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