Wind turbine market drivers challenges India

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Wind Turbine Market – India
March 2013

Executive Summary
 Wind Energy has been the fastest growing renewable energy sector in the country till FY2012
 With a cumulative installed capacity of over -- GW (by Dec 2012) wind power currently accounts for almost --
% of the total installed capacity in the renewable energy sector
Market  The wind turbine sector is forecasted to grow at a CAGR of --% to reach -- GW by 2017
 The market has slumped currently due to withdrawal of the flagship AD & GBI scheme by the Government
p y g p y

Drivers Challenges
– Huge Untapped Wind Power Potential – Withdrawal of GBI and AD Schemes
Drivers & – India Remains Energy Deficient – Rise in Raw material Prices
Challenges – Global Drive towards Clean Energy – Land Acquisition Problems
– Volatile Oil Prices
– Depleting Coal Reserves

 Potential of Off-Shore Capacity
 Vertical Integration
g
Trends  Hybrid Generators
 Advent of Small Wind Turbines

Regulatory  Major Regulatory Bodies & their roles
Bodies
B di  Policy and Regulatory Incentives

Major Players
Company A Company B Company C
Competitive
Landscape
L d Company D Company E Company F

WIND TURBINE MARKET IN INDIA 2013.PPT 2

•Macroeconomic Indicators
•Introduction
•Market Overview
• Indian Market
• EXIM
•Drivers & Challenges
•Trends
•Regulatory Bodies
•Competitive Landscape
•Market Entry
•Appendix

Economic Indicators (1/3)
GDP at Factor Cost: Quarterly
SAMPLE
INR tn
13.95
14 13.40 13.24
13.06 12.94
12 94
13 12.62
12.39 12.29 12.13
12 11.47 11.52 11.66

10.58 10.70
11

10
Q1 Q2 Q3 Q4
2009-10 2010-11 2011-12 2012-13

Inflation Rate: Monthly
y

%
1.0 0.94 0.93
0.8
08
0.6 0.47 0.46 0.46
0.4
0.2
0.0
Jul 2012- Aug 2012 Aug 2012 - Sep 2012 Sep 2012 - Oct 2012 Oct 2012 - Nov 2012 Nov 2012 - Dec 2012


Wind turbines consists of twelve distinct and vital
components
Wind Turbine Generator (WTG)

1 2 3 4

5 6 7 8

9 10 11 12


Wind turbine market is poised to grow with the potential
revamp of the Generation Based Incentive scheme
Market Overview
• Wind Energy has been the fastest growing renewable energy sector in the country till FY2012
• This sector is forecasted to grow at a CAGR of --% to reach --GW by 2017
•CCumulative i t ll ti
l ti installations of wind t bi generators stands at -- GW by 2012 end
f i d turbine t t d t b d
• India has a manufacturing capacity of -- GW annually
• More than --% of the nation’s wind installations to date is concentrated in just five states in southern and western India
– Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra, and Gujarat
• The market has slumped currently due to withdrawal of the flagship Accelerated Depreciation & Generation Based
Incentive scheme by the Government
• However, the Ministry of New and Renewable Energy have indicated that the GBI scheme might be reinstated in the
2013 Union Budget

Market Size: Historical & Forecast (2007-2017)
GW
x11
yy
x10
x9
xx x8
x6 x7
x4 x5
x2 x3
x1

2007 2008 2009 2010 2011 2012 2013e 2014e 2015e 2016e 2017e


Drivers & Challenges – Summary

Drivers Challenges
Huge Untapped Wind Power Potential Withdrawal of GBI and AD Schemes

India Remains Energy Deficient Rise in Raw material Prices

Global Drive towards Clean Energy Land Acquisition Problems

Volatile Oil Prices

Depleting Coal Reserves


Roll back of incentive schemes have led to an ebb in the
wind turbine manufacturing sector
Withdrawal of GBI and AD Schemes Impact
• Wind turbine installation has registered slow growth in FY2013, in sharp contrast to the past
year’s growth
• T il N d the windiest state, capacity addition h f ll b more than h lf while R j h
Tamil Nadu, h i di i ddi i has fallen by h half hil Rajasthan
has witnessed a drastic decline
• Withdrawal of generation-based incentive (GBI) and accelerated depreciation (AD) schemes
have emerged as the main reasons behind this debacle
• The GBI scheme (launched in 2009) was in addition to the g
( ) government’s ppromotional scheme, ,
AD, launched in the 1990s
• Accelerated depreciation (AD) was withdrawn from April 1st, 2012
• GBI also lapsed in March 2012 and was not renewed

GBI Scheme Accelerated Depreciation Scheme
• It entitled the wind energy producer to get INR • Wind energy producer were entitled to claim up
0.50/unit (over and above the tariff) of electricityy to 80 % AD in the 1st year itself (against the
y g
produced for the first 4 to 10 years of project life normal rate of 15%)
subject to maximum cap of INR 6.2 mn/MW • Over the years AD was the major driver for the
• The scheme could be availed only if AD Scheme development of the wind industry in the
had not been availed country

However, the Ministry of New and Renewable Energy has given hope to wind power developers and turbine
manufacturers that the GBI scheme may be reinstated in the near future


Trends – Summary

Potential of Off-Shore
Capacity Vertical Integration

Key
Trends

Advent of Small Wind
Turbines Hybrid Generators

SAMPLE

Bigger wind farm developers are slowly moving towards
vertical integration along the industry value chain
Vertical Integration

Wind Power – Line of Business’

1 2 3 4

5 6 7 8


Company A’s share of Indian wind-turbine market continues
to be on the decline
Wind Turbine Market – Market Share
• The number of turbine suppliers in India almost doubled to -- in 2012 as compared to FY2010

x6
x5
x1
x4
a b c
d e f
x3

x2

FY2012


Competitive Benchmarking (2/5)
Key Ratios of Top 5 Companies – Operational Basis (FY 2012) (1/3)

Operating Margin Net Margin
%

A B C D E

• A recorded operating margin of --%, higher than that of B, C and E which recorded operating margin of --%, --% and --%
respectively but lower than that of D which recorded operating margin of --%
• Net margin for all the five company’s are negative, however, A recorded the highest net margin of --%


Company A (1/5)
Company Information Offices and Centres – India
Street A
Corporate Address
Maharashtra

Tel N
T l No. +91-22-12345678
91 22 12345678
Fax No. +91-22-12345679
Website www.xyz.com
Year of
19--
Incorporation
Ticker Symbol -- Mumbai
Stock Exchange BSE
Head Office

Products and Services
Category Products/Services
Wind turbine generators, wind power Key People
Wind Sector systems and related components such
as d i systems, annular generators etc.
drive t l t t Name
N Designation
D i ti
Land sourcing and permitting, wind Person A Founder, Chairman, MD
Project Services resource assessment and installation and
commissioning services Person B CFO
Sale/sub-lease of land; infrastructure Global Head of Public
development; sale of f
d l t l f foundry and f i
d d forging Person C
Others Relations
components; generation and sale of
power Person D Chief Economist

13

Company A – Shareholding Pattern (2/5)
Shareholders of the Company as on 28.09.2012 Ownership Structure

Name No. of Shares held Foreign Holdings
Corporate Bodies
p
P --
b
Q --

R --

S --

Total --

a

Note: AGM as of 28th Sep 2012


Company A (3/5)
Financial Snapshot Key Ratios
y-o-y change
Total Income Net Profit/Loss Particulars 2012 2011 2010 2009
(2012-11)
INR bn INR bn
Profitability Ratios
Operating Margin
Net Margin
Profit Before Tax Margin
Return on Equity
Return on Capital Employed
Return on Working Capital
2009 2010 2011 2012 Return on Assets
Financial Summary Return on Fixed Assets
Cost Ratios
• The company incurred a net loss of INR -- bn in FY 2012, as Operating costs (% of Sales)
compared to net loss of INR -- bn in FY 2011 Administration costs (% of
• The company reported total income of INR -- bn in FY 2012,
p y p Sales)
registering an increase of --% over FY 2011 Interest costs ( of Sales)
(% )
Liquidity Ratios
• The company earned an operating margin of --% in FY 2012, an
Current Ratio
increase of -- percentage points over FY 2011
Cash Ratio
• The company reported debt to equity ratio of -- in FY 2012, an Leverage Ratios
increase of --% over FY 2011 Debt to Equity Ratio
q y
Debt to Capital Ratio
Key Financial Performance Indicators
Interest Coverage Ratio
Indicators Value (26/12/2012) Efficiency Ratios
Market Capitalization (INR mn) -- Fixed Asset Turnover
Total Enterprise Value (INR mn) Asset Turnover
--
Current A t Turnover
C t Asset T
EPS (INR) -- Working Capital Turnover
PE Ratio (Absolute) -- Capital Employed Turnover
Improved Decline
15

Company A (4/5)
Business Highlights

Description News

• -- is promoted by the -- and was incorporated in -- for the manufacture/assembly of wind turbine
generators (WTGs)
Overview • -- group acquired a controlling stake in --, an established -- design and consulting house in the wind
energy business in 2007 , through a holding company --
• It has two full-scale production facilities in -- and -- with a total annual capacity of 950 MW.
full scale

Network • The Indian manufacturing plant serves the Asia-Pacific market


SWOT Analysis: Company A (5/5)

• Point 1 • Point 2

S W

• Point 3 T O • Point 4

SAMPLE

Market Entry
SAMPLE
Market Entry Strategies – Indian Wind Turbine Industry (1/2)

Header 1 Header 2

Header 3


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Wind turbine market drivers challenges India

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