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Power Sector
Industry Overview
 India consumes 3.4% of global energy.
 Generation capacity of 141 GW; 663 billion units produced (1
unit = 1kwh)
 CAGR of 5% over the last 5 years
 India has the fifth largest electricity generation capacity in the
world
 Low per capita consumption at 752 units; less than half of
China
 Transmission & Distribution network of 6.6 million circuit km -
the third largest in the world
 Coal fired plants constitute 54% of the installed generation
capacity, followed by 25% from hydel power, 10% gas based,
3% from nuclear energy and 8% from renewable sources
Industry Overview
 Competitive Factors
Foreign Direct Investment is 100%
Competitive Factors in Power Sector

Energy Sources
1) Coal:
RIL puts in Rs 700 cr bids for coal India issue.
 Hero-Honda- Rs 250 crores
 Bajaj Holdings-200 crores.
Government support?
Generate returns on their treasury portfolios?
or both.
Continued…

2) Oil : Acquisitions of stakes.

ONGC, GAIL eye 25% stake in Oz energy
company “Advent Energy” for $1 billion.
Assumption: This acquisition is for competing
with Reliance Industries in Gas fields in the
Krishna -Godaveri basin off the Andhra Coast.
Reliance Industries in Gas fields in the Krishna
-Godaveri basin off the Andhra Coast.
Continued…

3) Non-Conventional Energy(Wind Energy)

HAVELLS India and SUZLON Energy have
moved Overseas for business.
HAVELLS’s Sylvania, a European Subsidiary of
HAVELLS recorded profits of 8.1 crore in Sept
Quarter.
SUZLON ENERGY recorded its sixth
consecutive quarter of losses at 370 crores.
INDO-CHINA Business Relations
 Reliance power(Generating Electricity) places
$8.3 bn gear order. This is a deal between
Reliance power and Shangai Electric.
 Components being boilers, turbine and
generators.
 The equipment will aggregate a capacity of
23,700 MW.
 The deal will be initiated on 2011.
 INDO-US Business Relations
 Before the address to USBIC, Reliance Power
has announced Power Equipment Deal for
2400 Mw from General Electrics.
Energy Statistics(USA)
 According to US Energy consumption pattern.
Continued…
 US Fast Making Nuclear Power Core of its
Energy Mix.
 100% FDI allowance permitted in the sector is
luring many foreign investors to explore more
growth opportunities and expand their
business operations in India.
Coal Reserves shortage in
USA
 American Electric Power seeks bid for
coal.
 US EXIM bank investment of $100m in
coal power project. This project will be
undertaken by Reliance Power.
 AEP, MidAmerican Transmission Joint
Venture To Develop Two 765-Kv
Transmission Projects In The Midwest.
 Electric Transmission America is
partnering on two transmission projects
Future investments in Power Sector

Renewable Energy
1) Wind
2) Solar
3) Bio fuels
Supporting Data
 South Korea Focusing on Renewable Power
for Self-Reliance
 Wind Energy Gaining Momentum in China
 Government Push to Spur Growth in Indian
Solar Market
 Indian Solar Capacity to Grow at a CAGR of
Over 130%
Liquid Natural Gas
 India to Drive Global LNG Market Growth.
 The LNG demand is anticipated to grow at a
CAGR of 7.6% between 2010 and 2030.
 The soaring prices of crude oil and coal at the
global level and the concentration of countries
towards clean power are the key factors
fuelling growth in the sector.
Spat between Reliance power and
TATA Power on Tariffs Rate
Reliance Infrastructure, has proposed to hike its
power tariff in Mumbai.
It has to buy costly power from the market.
 RIL claims Tata Power is causing injustice to
its consumers by reducing allocation of power
from 762 MW to 500 MW, leading to high
tariff increase for its consumers
 TATA power has shifted its focus away from
Mumbai and towards Punjab, Tamilnadu and
Andhrapradesh.
Threat-Opportunity
Classification
Technological Factors
Opportunity:
 “Global Bio-fuel Market Analysis” global ethanol
production will grow at a CAGR of over 6% from 2009-
2018 to reach 33,895 Million Gallons.
DATA:
 A key interest in developing or expanding biofuel
industry is the environmental benefits, including the
potential to reduce emissions such as GHG.
 It is estimated that road transportation contributes 25%
of the global CO2 emissions.
 Therefore, countries are considering biofuels as an
alternate source of energy for transportation.
Opportunity:

 Indian Solar Capacity to Grow at a CAGR of Over 130%.

DATA:
 As per our research report “Indian Solar Energy Market Outlook 2012”, the
number of solar PV cells grew at an exponential growth rate during the last
few years.

 In addition, the number of solar PV modules witnessed a significant increase

during these few years.

 Most of the states are deploying PV power plants and with the
implementation of the National Solar Mission, it is expected that the annual
PV installed capacity will grow at a CAGR of around 130% during 2009-2013.
Threat
 Indian Coal Demand to Grow at a CAGR of 11% by FY 2013.
 $45-60 Million perMw.

DATA:
 According to our latest report “Indian Coal Industry Forecast to 2013”, Indian
coal industry has witnessed tremendous growth in the past few years.

 The country holds the fourth position in terms of coal reserves and third in
terms of coal production.

 Besides, the domestic consumption of coal in the country witnessed great

boost in past few years and expected to surge further in coming years.
 Moreover, with rising demand for coal from major energy consuming
sectors like Power, Steel & Cement along with government support the
domestic coal demand is expected to grow at a CAGR of around 11% During
FY 2011 – FY 2013.
Opportunity

 India to Drive Global LNG Market Growth.

DATA:
 According to our research report “Global LNG Market Analysis”, the demand
for LNG is expected to grow at a robust pace in both the developed and
developing nations in coming years.
 Despite the economic slowdown of 2009, the market did not seem to have
been much affected as the countries globally understood the importance of
using LNG.
 Thus, the LNG demand is anticipated to grow at a CAGR of 7.6% between
2010 and 2030.
 The soaring prices of crude oil and coal at the global level and the
concentration of countries towards clean power are the key factors fuelling
growth in the sector.
Opportunity
 Improving customer satisfaction, Increasing reliability & quality of power
supply.
DATA:
 The advent of smart meters, automated (not the same as "remote") meter
reading, energy audit software and related IT enablers has made it possible
for Utilities to scientifically measure their T&D losses, which, combined with
automated computation of their collection losses, enables computation of
AT&C loss in a timely and accurate manner at a geographically granular
level.
 The installation of advanced billing and customer care software enables
design of extremely robust business processes in the field of metering,
billing, payment / collection & recovery, and theft control measures like
analytics of metering data and consumption / payment patterns, legal and
enforcement action management, etc.
 Thus, the utilities are able to not only reduce meter-reading errors and
ensure billing accuracy, but also provide efficient customer service and
prevent revenue leakage.
Opportunity
 Hydel power potential of 150,000 MW is
untapped as assessed by the Government of
India.
Opportunity
 Ultra Mega Power Plants (UMPP) – 9 projects
of 4000 MW each.
Opportunity
 Transmission network ventures - additional
60,000 circuit km of Transmission network
expected by 2012.
 BCG Matrix for Power Sector
Companies considered

1) Global Company: American Electric

Power.
2) Domestic Company: Reliance Power.

Considered Strategic Business Units are

1) Generation
2) Transmission
3) Distribution
 Mediums for Generating Electricity

American Electric Power Reliance Power

1) Nuclear Power 1) Thermal Power
2) Thermal Power 2) Wind Power
3) Wind Power 3) Natural Gas
4) Solar Power
 Star Question mark
Dog
nce Power: Thermal Power Plants (Coal) & NG Power Plant(Alternatively
Reliance Cash cow
Naphtha is used
Power: Wind Energy as the source)
Reliance Power:
ican Electric Power: Reliance Power:
American Electric Power: Wind Energy, SolarElectric
EnergyPower:
(Renew
American
American Electric Power: Nuclear Power Station and Coal fired
Supporting Data
Supporting Data
 Electric Transmission America is
partnering on two transmission projects
stretching from the Indiana/Ohio border to
within Iowa to reinforce the grid and
support Renewable Energy Development.
Supporting Data for Reliance Power
 RIL puts in Rs 700 cr bids for coal India issue.
 Reliance power(Generating Electricity) places
$8.3 bn gear order. This is a deal between
Reliance power and Shangai Electric.
 Before the address to USBIC, Reliance Power has
announced Power Equipment Deal for 2400 Mw
from General Electrics.
 Reliance Industries Gas fields in the Krishna
-Godaveri basin off the Andhra Coast-”Samalkot
Project”.
 Coal LNG Wind

Star mark
Question
Dog Cash cow
Reliance Power:
Reliance Power:
Reliance Power:
Reliance Power:
 Coal Wind Solar Nuclear

Wind Solar

Dog Question
Star mark
Reliance Power:
American
American Cash
Electric
Electric cow
Power:
Power:
American Electric Power:

Nuclear Coal