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Amity International Business School

Ashok Kr . Lahoty MBA - IB

Board - 6

Presentation Outline
Overview

Sector NTPC Overview Experience in organization Issue & Challenges Recommendations

of

Indian

Power

Indian Power Sector - An Overview


5th Largest power Main sources are

sector in the world. Hydro Power, Thermal Power for generating capacity. Present Installed capacity is 173626.40 MW and future generation capacity is 292000 MW. Elasticity ratio was 3.06 in 1st plan and peaked at 5.11 during 3rd plan(Latest). Per Capita consumption of electricity was 606 KWH in 2004-05 and estimated 932 KWH/Year in 2012. Financial closure of 4400 MW capacity in generation projects in private sector.

NTPC An Overview
Current Capacity -34194 MW (Including JV of 3364 MW) 20 Coal Based and 8 Gas Based Projects Largest generator in India Contributing 28% of Indias generation with 18% of capacity Development of 8 Coal Mines. One of the largest Indian companies with market cap of over Rs. 1,60,000 Crore. Net worth Rs. 62000 Crore & Assets over Rs. 1,12,000 Crore.

Experience in Organization

NTPC is analyze the costing process through CVP analysis which include cost, volume, and Profit. Cost control and cost reduction. Stock management and inventory control decisions. Product Development Decisions. Capital budgeting decisions. capability of absorbing the product manufactured by the new plant in its entirety at the anticipated price. NTPC target- 128 GW with 28% from non fossil sources by 2032 as per low cost factor.

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Requirement of budget process for increase the effectiveness with which people and capital are employed. To disclose areas of potential improvement in the companys operations. NTPC Ltd is prefer flexible type of budget, as company have 24 power plants across the countries, so they have to generate capacity as per their price fluctuations. Maintenance Planning Section (MTP) and Operation & Efficiency Section. Budget Estimates - Station Auxiliary consumption and consumption by utilities

Cost Analysis of Power Project : A study of NTPC dadri Project


Cost analysis has assumed greater importance in the prevailing business scenario of economic liberalization where IPPs have made an entry in power generation. Up to the 1980s NTPC cost of generation was hardly compared to any other power utility, except maybe the SEBs against whom NTPC was most favorably placed anyway. It has 4 units of 210 MW each which are coal-based and 6 units 4 x 131 MW and 2 x 146.5 MW - which are gas based. Elements of total cost of generation are analyzed, reasons for adverse trends identified and corrective actions taken to arrest the increase in cost as well as to reduce cost wherever feasible.

Organization interest, therefore, in analyzing and controlling cost will be guided by the above cost hierarchy. It is quite clear from the foregoing statements that apart from coal cost, the single most important element of cost which is controllable is O & M cost. A reduction in cost of generation by 1 P/KWh will result in increase in revenue and profit by over Rs.6 cr. Even a small reduction in fraction of a paisa will result in substantial increase in income/profit. Sustaining its status of low cost power producer:

Issue and Challenges


Focus on new Induction of

capacity addition. Supercritical units in Indian Power Sector. Up gradation of Aging Fleet. For performance Analysis & Diagnostics For specialized Repair/ Replacements Eco-friendly issues Workforce management Fuel Availability risk factor

Recommendations

Minimize the risks arising out of equipment failures. To reduce cost vulnerability, so that accuracy can be maintained. Inability to maintain the cost of newly generated power plants. Normative operation and maintenance budget determined by the CERC is not sustainable for power plants. As per CEA, in 2010 due to non availability of coal, the loss generated on power plants, because almost 74% of domestic coal produced is utilized for thermal power station, so company have to make sufficient production of coal. To review the actual expenditure and working capital as against the budget estimates for the particular time period. Assisting other resources for achieving improved plant availability and low cost factor. India is endowed with an estimated hydro power potential of more than 150,000 MW, but as NTPC has base business is thermal and Gas generated plants, so as per 11th plan achievement , company has to sustain its leadership in hydro also.