ELECTRICAL

POWER INDUSTRY
Group 7

Introduction
The electric power industry is the transmission, generation, distribution and
sale of electric power to the general public.

Capacity Additions and Supply

Over the period of 2011-15, a total of
93 GW of capacities were added by
the private sector.
Around 20 GW capacities were added
in the FY 2012 and 2013, and a
record high of 22 GW capacity was
added in the year FY15.
Key Issues:
Weak financials of developers
Inadequate power purchase
agreements (PPAs)
Expansion through acquisitions
Delay in land clearances

Reforms and Future Prospects for

Capacity Additions
Reforms Initiated
Future Prospects

Future Prospects for Capacity

Additions

Private players to be major player in capacity

additions with 44% followed by the Centre (35%)
and the State (21%)

Deficit
Base deficit reduced to 3.6 per cent
in FY2015 for 4.2 per cent in FY 2014
due to the strong growth in power
supply.
Deficit declined to 4.2 per cent in FY
2014 from 8.7 per cent in FY 2013

Future Deficit
The base growth rate is expected
to remain high at around 6.5 per
cent CAGR in the next five years.
Demand is also set to increase
slowly due to an increase in
economic activity and high
demand is expected in sectors like
cement and auto.
The base deficit is expected to be
0.1 per cent CAGR by year 2020.

AT & C Losses
Aggregate Technical and Commercial Losses (AT & C Losses) is the sum total of
technical loss, commercial losses and shortage due to nonrealisation of total billed
amount.

The Government has launched the

Restructured-Accelerated Power
Development and Reforms
Programme (R-APDRP)to reduce
the AT & C losses in the country.

Investments
The expected investment in the power sector is about Rs 9 trillion over the next 5
years.
Sector wise breakup (2010-11 to 2014-15)

Segment wise breakup (2010-11 to 201415)

Future Prospects of Investments

Investments over the next five year are expected to be Rs 9.1 trillion from Rs 9 trillion in
the past five years due a slowdown in capacity additions and focus on the transmission
and distribution segment. The investment in power generation is expected to go down
to 44 per cent from 61 per cent in the last five years.

Segment wise breakup (2015-16 to 201920)

Sector wise break up (2015-16 to 201920)

Future Prospects of Investments

Expected investment in the Generation
segment

Expected investment in the Transmission

segment

Future Prospects of Investments

New transmission capacity is
expected to be added in the next
five years.

Investment projects

Future Prospects of Investments

Overall investment in the distribution segment is Rs 2.6 trillion for 2016-20 as
compared to Rs 1.7 trillion due to higher budgetary support from the Government.
Also Government has introduced various schemes for strengthening transmission
and distribution networks.

Expected investment in the distribution

segment

Budget support for centrally funded

schemes

Ujwal DISCOM Assurance

Yojana(UDAY)
1. Reduction in interest cost: Over a period of two year , the
state is to take over 75 per cent of the Discoms debt. Remaining
25 per cent of the loan would be converted into bonds with
interest rate as .1 per cent more than the banks base rate.

 2. Reduction in power cost: Measures to reduce the power cost are as follows:

additional supply of coal (at notified prices)

rationalization of coal linkage through swap agreements

supply of crushed and washed coal

cheaper power from NTPC

3. Improvement in operational efficiencies: Efficiencies are achieved through the

following:

smart metering

upgradation of infrastructure including transformers

use of energy efficient LED bulbs

pumps and other heavy electric equipment

4. Minimizing the gap between ARR and ACS:

To minimize the gap between ARR (per unit average revenue realized) and ACS(Average
Cost of Supply) per unit of power has been a priority for the Ministry of Power

Reliance Power Ltd

It is a part of Reliance Anil Dhirubhai Ambani Group.

It was incorporated on January 1995 in the power utility sector.

It is planning for 13 medium and large sized power projects with capacity of 33480 MW.

It is the sole distributor of power to Mumbai suburbs. Also has businesses in Goa and
Andhra Pradesh.

The company website identifies project sites broadly to be located in western India
(12,220 MW),northern India(9,080 MW) andnorth eastern India(4,220 MW)
andsouthern India(4,000 MW).
They include sixcoal-firedprojects (14,620 MW) to be fuelled by reserves from captive
mines and supplies from India and abroad,
Twogas-firedprojects (10,280 MW) to be fuelled primarily by reserves from theKrishna
Godavari basin(the "KG Basin") off the east coast of India, and
Fourhydroelectricprojects (3,300 MW), three of them inArunachal Pradeshand one
inUttarakhand.

Current operations: Power generation improved due to high PLF(plant load

factor)

Average purchase cost: Tariff from Sasan UMPP is low

Future Prospects:

 Reliance Power Ltd

Strategy:
Focus on renewable electricity generation :The company's 2014-15 annual report
mentioned quest to become one of Indias largest renewable energy companies. As
mentioned above the coal based power plants are delayed or abandoned and the
company is slowly expanding the solar power plants and wind farms, thus putting a stop
to its thermal based capacity expansion.
Proximity to Fuel Sources: The Power plants are located near to the sources of fuel
and gas power plants are located near to the well head.
Diversified Portfolio: Looking at 18000MW coal capacities, 2400 MW gas capacities,
5292 MW hyrdro electric capacities and 300 MW of renewable capacities in the future.

TATA POWER
Tata Power was founded in 1911 as Tata Hydroelectric Power Company by Dorabji Tata.
Indias first large hydroelectric plant was commissioned in 1915 in Khopoli with capacity
of 72MW.
Then second and third power plants were installed inBhivpuri(78MW) in 1919 and Bhira
(300MW) in 1922

TATA POWER
Installed capacity and generation:

TATA POWER
Businesses of TATA Power:
Coal Business:
Tata Power has 30 per cent stake in two Indonesian mines KPC and Arutmin. In 2014-15
coal sales from these mines dropped to 82 million tonnes. Also international coal prices
declined due to economic slowdown. Thus revenues dropped to Rs 81.4 billion due to lower
sales volume. Even then operating margins improved to 11.4 percent in 2014-15 from 11 per
cent in 2013-14.

Distribution Business:
Mumbai Licensed Area: Tata Powers consumer base expanded to 6 lakh in 2014-15 from 5
lakh in 2013-14 while total retail sales declined from 6.6 Billion units to 6 Billion units. The
tariff was hiked by 13.5 per cent in 2014-15.
Delhi Licensed Area: Tata Power raised its stakes in Northern Delhi Private Ltd to 51 percent.
NDPLs revenue increased to Rs 65.2 billion due to hiking of tariff by 7.5 percent.

Power Trading Business: Tata Power trading Company Ltd is the second largest power
trading company having a market share of about 10% and revenues of Rs 42.4 billion. The
revenue growth is expected to remain high in the year 2015-16. High revenue were realised
in the first quarter due to high demand for the short term.

TATA POWER
Future Prospects:

TATA POWER
Strategy:
Diversification in Overseas Market: Tata Power plans to increase its overseas presence
in Indonesia, South Africa and Georgia. It plans to have around 5000MW capacity addition
from overseas due to the domestic market slow down.
Diverse portfolio: Tata Power eyes presence in all aspects Power: Thermal, Hydro, Solar,
Wind, Transmission and Distribution
Scaling up: Strategy focuses on scaling up generation capacity to 18,000 MW by 2022 and
value-added businesses, including services and trading
Low cost producer: Tata Power is implementingcontinuous modernisation and cost
reduction strategies to emerge as a low cost power producer.