Project Title: Operation and Maintenance Budgeting in NTPC plants with special reference to NTPC Ramagundam

   

NAME: CHANDAN KUMAR PROGRAM: MBA - 2009 ENROLL. NO: 0671703908 FACULTY GUIDE : Mr.AJAY KUMAR RATHORE

Tecnia Institute of Advanced Studies

Company Profile:


Indias largest power company, NTPC was set up in 1975 to accelerate power development in India. VISION Of NTPC: "A world class integrated power major, powering Indias growth, with increasing global presence

NTPC ranked 317th in the 2009, Forbes Global 2000 ranking of worlds biggest companies. Apart from power generation, which is the mainstay of the company, NTPC has already ventured into consultancy, power trading, ash utilization and coal mining.

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NTPC has been operating its plants at high efficiency levels. Although the company has 18.79% of the total national capacity it contributes 28.60% of total power generation due to its focus on high efficiency. Total installed capacity of the company is 30, 144 MW (including JVs) with 15 coal based and 7 gas based stations, located across the country. In recognition of its excellent performance and tremendous potential NTPC has been given the status of "Navratna" by the GOI

Industry Profile


 

The electricity sector in India is predominantly controlled by Government of India's public sector undertakings (PSUs). Major PSUs involved in the generation of electricity include National Thermal Power Corporation (NTPC), National Hydroelectric Power Corporation (NHPC) and Nuclear Power Corporation of India (NPCI). India is world's 6th largest energy consumer, accounting for 3.4% of global energy consumption. About 76% of the electricity consumed in India is generated by thermal power plants, 21% by hydroelectric power plants and 4% by nuclear power plants.

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The Indian government has set an ambitious target to add approximately 78,000 MW of installed generation capacity by 2012. 'Power for all by 2012' More than 50% of India's commercial energy demand is met through the country's vast coal reserves.

Introduction


OPERATION AND MAINTENANCE BUDGET: Operation and maintenance budgeting is description of a financial plan related to a power station that are in operation phase. It essentially lays down the physical and financial operating plan for the budget period and lays down the standard and yardstick for input and the output associated with the various activities. Main Objectives of operation and maintenance budget:  Ensure high level of plant availability  Achieving the target PLF  Keep up the designed plant efficiency with the selected fuel mix  Accident free plant operation  Operation with awareness of environmental impact

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Budget Centers:
Each station is a budget centre and hence each station should prepare the budget estimates. The station level budgets are to be consolidated at the region level (RHQ) and then at the Corporate Centre (CC) level to arrive at the company budget. The RHQ and CC would also be budget centers for the activities controlled by them and the expenditure incurred at the RHQ and CC level.

Budget period
The budget is to be prepared on an annual basis for a financial year. The process of preparation of the budget shall start in the month of January and the final approved budget for the next financial year should be in place by the 31st of March.

Objectives of Study
The basic objective of the Study is to know the budgeting system for the stations that are in in the operation phase in NTPC and to make the Operation and Maintenance budget for the NTPC Ramagundam station.

BUDGETING PROCESS
 

BUDGETING AT THE STATION LEVEL The stations are responsible for providing the following information: Operating parameters Fuel expenditure O&M expenditure i.e. employees, repairs & maintenance and overheads Depreciation Working capital (other than debtors) Miscellaneous income Other Finance charges (excluding rebates)

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BUDGETING AT THE RHQ LEVEL: The RHQ s are responsible for budgeting for the expenses of RHQ and the other offices under their control. The budget estimates should be prepared in respect of the following:
Employees cost Administration and general expenditure of RHQ Debtors and Rebates

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BUDGETING AT THE CC LEVEL:

     

CC is responsible for preparing the budget estimates in respect of the following: Employees cost of CC Administration and general expenditure of CC Interest on working capital Other income, such as income on investments, etc Consultancy budget

BUDGET MONITORING SYSTEM

The expenditure against budgets should be monitored in the following manner:  Monitoring prior to incurring an expenditure (pre-control)  Monitoring after the expenditure has been incurred, based on the actual performance (post-control)

Criteria for declaring commercial operation



Trial operation of the unit has been performed with the contractor and the trial operation report has been jointly prepared with the contractor and signed without absolving the contractor of his obligations under the contract. Trial operation of the unit shall be considered successful if a unit has operated continuously for 14 days out of which at least 72 hours should be a full load. The unit has been in operation for a period at least 1000 hrs giving generation not less than2500 kWh/KW/ year and shall cover the whole range of operation including full load for a minimum period of 72 hours.

POWER SECTOR AT A GLANCE



Power generation in India Sector State sector Central sector Private sector Total MW 76115.67 48970.99 22878.75 147965.41 % 52.5 34.0 13.5 100

NTPC IN INDIAN POWER SECTOR

Research Methodology
My study is base on secondary data.  I have taken data from web sites, cosultant from Operation & maintenance deptt., Annual reports, Newspaper, Magazines in order to collect secondary data.  Corporate centre guidelines issues for making Operation & maintenance budget.


NTPC LTD. (Ramagundam) ANDHRA PRADESH



The Ramagundam power plant is the third in the series of the super thermal power stations set up by the NTPC. The foundation stone for the 2100 MW project was laid by the then Prime Minister, Morarji Desai, on November 14, 1978. In august 2004 a unit of 500 MW is added to the station, now the total capacity of the station is 2600 MW. .

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The NTPC, Ramagundam, is supplying power to Andhra Pradesh (610 MW), Tamil Nadu (470 MW), Karnataka (345 MW), Kerala (245 MW), Goa (100 MW) and Pondicherry (50 MW) and remaining 280 MW would be distributed among the states depending on their requirements. The project is spread over 10,630 acres is utilizing about 30,000 tonnes of coal and 150 cusecs of water every day for generating power.

DATA ANALYSIS & INTERPRETATION



Physical & Financial Parameters Unit 200809 21500 93.56 94.40 5.74 20266 7.85 RE2009-10 BE201011 20802 94.10 89.57 6.20 19513 7.85

Description Physical Generation Availability PLF APC ESO Normative APC

MU % % % MU %

20400 91.95 89.57 6.20 19136 7.85

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ABT Heat rate Specific oil consumtion Specific consumption of coal GCV of coal % 96.56 91.17 2372 0.23 0.651 92.97 2369 0.23 0.651

Kcal/ 2372 kwh Ml/k wh Kg/k w 0.16 0.624

Kcal/ 3798 kg

3638

3638

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Description Financial Overhauling Exp. -Capital -Boiler Other than overhauling Emp Cost Water charge Rs/lacs 2300 Rs/lacs 800 Rs/lacs 1500 Rs/lacs 7439 Rs/lacs 14712 Rs/lacs 1339 3540 3540 6782 16713 1339 3410 950 2460 8109 17444 1339 Unit 2008-09 RE2009- BE201 10 0-11

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Description Station overhead Total O&M Exp. Share in CC Exp. Total O&M including CC Net profit ROCE 2008-09 RE2009- BE201 10 0-11 Rs/lacs 3396 4068 4248 Rs/lacs 29185 Rs/lacs 9600 Rs/lacs 38785 Rs/lacs 53525 % 28.96 32441 10368 42809 39398 24.01 34549 11093 45642 41202 24.81 Unit

Budgeted Profit and Loss account

s. Description No A INCOME 1 2 Sales revenue Other revenues TOTAL-A 2008-09 RE2009-10 BE2010-11

356926 2729 359655

325083 560 325643

332684 560 333244

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B 1 2 3 4 5 EXPENDITUR E Fuel cost Water charge O&m cost(excl CC) Financial charge TOTAL EXPENDITUR E (B)

240176 1199 27986 27169 296530

219648 1199 31242 23788 275877

223484 1199 33350 22916 280949

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C D Station profit/loss Share of CC and regional expense Net profit and loss 63124 9600 49766 10368 52295 11093

53525

39398

41202

FINDINGS OF THE STUDY

   

Company should reduce the outages hours, as it leads to reduce the availability hours for generation. Company should increase plant loading factor (PLF), as it will enhance the generation capacity. Company should establish reserve for fuels, especially for coals. Company should looks for cheapest and qualitative sources of fuels as it is know around 80% of the total expenditure

Bibliography:
       

www.ntpc.ac.in www.wikipedia.org www.google.com www.powermin.gov.in Monthly journal of NTPC Ramagundam Previous o&m report of NTPC NTPC previous financial report Financial accounting DR.S.N.Maheshwari