MARCH
2013
Power
MARCH
2013
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: NTPC, Tata Power
Opportunities
Useful information
MARCH
Power
2013
Advantage India
Growing demand
Expansion in industrial
activity to boost demand for
electricity
Advantag
e
Increasing investmentsIndia
FY12
Total
demand
(TWh):
969.0
FY22
Opportunities
Total
demand
(TWh):
1915.0
Policy support
Notes: 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
ADVANTAGE INDIA
Power
MARCH
2013
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: NTPC, Tata Power
Opportunities
Useful information
Power
MARCH
2013
engaged in power
Fast track clearing
generation, transmission
mechanism of private
and distribution
investment proposals
Launch of Ultra Mega
Electricity Regulatory
Power Project (UMPP)
Commissions Act
scheme
(1998) for establishing
Various schemes and
Central and State
initiatives such as
Electricity Regulatory
Jawaharlal Nehru National
Commissions and
Solar Mission to promote
rationalisation of
renewable energy
tariffs
Civil nuclear agreement
with the US for nuclear
Source: KPMG, Corporate Catalyst India, IFLR, Aranca
technology and fuelResearch
MARKET
AND TRENDS
5 OVERVIEW
Fuel
supply agreement
of
power companies with
Liberalisation
Era
1956-1991
Nationalisatio
n Stage
Before
1956
Introductory
Stage
Electricity
(Supply) Act
1948
Establishment of
semiautonomous
State Electricity
Boards (SEBs)
Industrial Policy
Resolution (1956)
Generation and
distribution of
power under state
ownership
Power losses,
subsidies,
infrastructure
bottlenecks, and
resource
constraints
Growth Era
Power
MARCH
2013
4,604
US*
4,120
Russia*
983
Japan
938
India*
880
Canada*
581
0
TWh
MARKET
6 OVERVIEW AND TRENDS
Power
MARCH
2013
771.6
Over
FY06-12,
electricity
production
expanded at a CAGR of 6 per cent
has
617.5
662.5
811.1
876.4
704.5
FY06
FY07
FY08 723.8
FY09 FY10
FY11
FY12 FY13*
509.4
MARKET
7 OVERVIEW AND TRENDS
Power
MARCH
2013
Thermal
10%
Gas
19%
Hydro
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
Renewable
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 Indias potential
Nuclear
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 worlds largest reserves of thorium, India has huge potential in
nuclear energy
12%
2%
Power
MARCH
2013
200
148
159
209
174
FY09
FY10
FY11
FY12
FY13*
MARKET
9 OVERVIEW AND TRENDS
Power
MARCH
2013
93.7
39.3
Hydro
140.2
131.6
39.0
36.9
25.0
24.5
13.2
Renewable
4.8
4.8
4.1
Nuclear
0
20
40
FY13*
60
FY 12
FY09
MARKET
10 OVERVIEW AND TRENDS
Power
MARCH
2013
Company
NTPC is Indias 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 Indias 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
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
Power
MARCH
2013
Company
Power
MARCH
2013
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: NTPC, Tata Power
Opportunities
Useful information
13
Power
MARCH
2013
Growing demand
Increase in
industrial
activity
Increasing
investments
Policy
support
Strong
government
support
Inviting
Electricity Act
(2003)- highly
liberal
framework for
generation
Resulting
in
Rising FDI
inflows
(USD1.65
billion in FY12)
Fuel supply
agreement of
power
companies
with Coal India
Ltd
Development
of Ultra Mega
Power
Projects
(UMPPs)
Increasing
penetration,
per-capita
consumption
Growing
consumer
base
Growing M&A
activity
Large
investments
in equipment
manufacture and
power
Source: Corporate Catalyst India, Ministry of Power, Aranca Research
generation
14
GROWTH DRIVERS
Power
MARCH
2013
48.8%
49.6%
50.3%
51.0%
47.4%
48.1%
2010 2011E 2012E 2013E 2014E 57.9%
2015E
15
GROWTH DRIVERS
Power
MARCH
2013
718.1
680.7
700
648.4
650
613.1
600
550
543.2
561.9
583.8
500
450
400
2010 2011 2012E 2013E 2014E 2015E 2016E
Source: Estimates as per BMI India power report Q4
2012, Mckinsey, Aranca Research
16
GROWTH DRIVERS
Power
MARCH
2013
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
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
R-APDRP
Fuel Supply
Agreement
Fuel supply agreement with Coal India Ltd. will ensure the availability of
coal for power companies over the long term
Power
MARCH
2013
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
18
GROWTH DRIVERS
Power
MARCH
2013
USD million
1,437
CAGR:
63.3%
967
1,252
985
87
157 FY08 FY09 FY10 FY11 FY12
FY06 FY07
Source: : Department of Industrial Policy and
Promotion, Aranca Research
19
GROWTH DRIVERS
Power
MARCH
2013
Target
Deal
date
Deal
value
(USD
million)
Athena Capital
Partners LLP
India
Infrastructure
Fund
Warburg Pincus
India Pvt Ltd
08th Jul
2011
67.6
Caparo Energy
(India) Ltd
17th Jun
2011
78.5
Diligent Power
Pvt Ltd
Moser Baer
Blackstone Group
Projects Pvt
LP
Ltd
Morgan Stanley
Asian Genco
Infrastructure
Pvt Ltd
11th May
2011
150.0
18th Aug
2010
300.0
18th Mar
2010
425.0
3rd Oct
2012
674.2
20
GROWTH DRIVERS
Power
MARCH
2013
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: NTPC, Tata Power
Opportunities
Useful information
21
Power
MARCH
2013
2.0
1.0
16.0
14.0
12.0
10.0
1.5
8.0
6.0
4.0
0.5
2.0
0.0
0.0
FY06 FY07 FY08 FY09 FY10 FY11 FY12
Net Profit
SUCCESS STORIES:
NTPC, TATA POWER
22
Power
MARCH
2013
100%
120%
80%
98%
86%
86%
66%
60%
40%
20%
0%
Before takeover
Badarpur
Unchahar
After takeover
92%
Talcher
Tanda
SUCCESS STORIES:
NTPC, TATA POWER
23
Power
MARCH
2013
181.2
192.1
197.4
196.1
FY10
FY11
145.2
127.2
FY06
FY07
FY08
FY09
FY12
SUCCESS STORIES:
NTPC, TATA POWER
24
Power
MARCH
2013
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
5,297
2,300
FY07
3,120
FY11
FY12
FY17E
SUCCESS STORIES:
NTPC, TATA POWER
25
Power
MARCH
2013
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: NTPC, Tata Power
Opportunities
Useful information
26
Power
MARCH
2013
TWh
CAGR:
7.6%
1,392
969
690
FY07
FY12
FY17E
FY22E
27
OPPORTUNITIES
Power
MARCH
2013
100
12th E
13th E
100
80
55
60
40
20
21
Plan No 10th
11th
28
OPPORTUNITIES
Power
MARCH
2013
Generation
Germac Energy
and Sepco III
(JV)
Tata Power
T&D
Reliance Power
Power Grid
Corporation of
India Ltd (PGCIL)
Investment
s across
the value
chain
Loan from ADB of USD600 million for development of highvoltage transmission system
Developing an integrated national grid, including strengthening
of five regional grids; project investment is worth about USD16
billion
Joint development of an India - Sri Lanka undersea transmission
link with the Ceylon Electricity Board at an estimated cost of
USD573 million
Source: BMI India power report Q3 2011, Aranca Research
Notes: JV - Joint venture, T&D - Transmission and distribution, GW
- gigawatt
29
OPPORTUNITIES
Power
MARCH
2013
70
68
India ranks
sixth in the
world
61
28
22
20
11
MARKET
30 OVERVIEW AND TRENDS
Power
MARCH
2013
20
4.4
2012
2020E
MARKET
31 OVERVIEW AND TRENDS
Power
MARCH
2013
Contents
Advantage India
Market overview and trends
Growth drivers
Success stories: NTPC, Tata Power
Opportunities
Useful information
32
Power
MARCH
2013
33
USEFUL INFORMATION
Power
MARCH
2013
34
USEFUL INFORMATION
Power
MARCH
2013
Glossary (1/2)
GW: gigawatt
MW: Megawatt
35
USEFUL INFORMATION
Power
MARCH
2013
Glossary (2/2)
TWh: terawatt-hour
USD: US Dollar
Wherever applicable, numbers have been rounded off to the nearest whole number
36
USEFUL INFORMATION
Power
MARCH
2013
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37
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