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Utilities Sector India
January 2014
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Table of Contents
I. Utilities Overview
1. Utilities Highlights
2. Main Sector Indicators
3. Power Sector Snapshot
4. Power Sector Snapshot (cont’d)
5. Utilities as Percent of GDP
6. Wholesale Price Index (WPI)
7. FDI in Utilities
8. Power Sector Forecast
9. Electricity Utilisation, Consumption Forecast
10.Energy Requirement and Peak Load Forecast
11.Power Generation Forecasts
12.Water Supply Forecast
13.Employment and Salaries
II. Utilities Government Policy
1. Power Sector Government Policy
2. Power Sector Government Policy (cont’d)
3. Power Sector Government Policy (cont’d)
4. Renewable Energy Government Policy
5. Urban Water Supply Government Policy
6. LPG, PNG Government Policy
III. Power Generation - Overview
1. Power Sector Highlights
2. Power Generation, Electricity Demand
3. Installed Capacity and Capacity Additions in FY 2013
4. Capacity Utilisation and Per Capita Consumption
5. Energy Requirement/Availability Gap
6. Peak Load Demand/Supply Gap
IV.Power Generation By Type of Fuel
1. Coal
2. Coal (cont’d)
3. Legal Framework for IPP Projects in India
4. Competitive Bidding Policy
5. The Fuel Supply Agreement (FSA)
6. Gas and Liquid-Fuel-Based Generation
7. Gas and Liquid-Fuel-Based Generation (cont’d)
8. Hydropower Generation
9. Hydropower Generation (cont’d)
10.Nuclear Power
11.Nuclear Power (cont’d)
12.Renewable Energy
13.Share of RES in Power Generation, Capacity
14.Power Generation SWOT Analysis
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Table of Contents
V. Power Transmission and Distribution
1. Power Transmission and Distribution Highlights
2. Power Transmission and Distribution Highlights (cont’d)
3. Power Transmission and Distribution Highlights (cont’d)
4. Performance of State Power Utilities
5. Performance of Utilities Selling Directly to Consumers
6. Performance of Utilities Selling Directly to Consumers
(cont’d)
7. Power Exchange and Trading
8. Power Exchange and Trading (cont’d)
VI.Water Supply and Sanitation (WSS)
1. Power Transmission and Distribution Highlights
2. Water Utilities in India
3. Urban Water and Sewage Highlights
4. Water Supply
5. Water Supply and Sewage
VII.City Gas Distribution (CGD)
1. City Gas Distribution (CGD) Highlights
2. PNG in India
3. CNG Sales, Stations and Vehicles
VIII.Major Players
1. Top M&A Deals
2. Possible M&A Activity in Utilities
3. Liquidity and Solvency Ratios of Major Players
4. GAIL India Ltd.
5. GAIL India Ltd. (cont’d)
6. NHPC Ltd.
7. NHPC Ltd. (cont’d)
8. NTPC Ltd.
9. NTPC Ltd. (cont’d)
10.PowerGrid Corporation of India Ltd.
11.PowerGrid Corporation of India Ltd. (cont’d)
12.Tata Power Ltd.
13.Tata Power Ltd. (cont’d)
14.Tata Power Ltd. (cont’d)
IX.Appendix
1. Table of Terms and Abbreviations
2. Ratio Calculation Formulas
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I. Utilities Overview
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Utilities Highlights
In 2011, India was the fourth-largest energy consumer in the world after the United States, China and Russia. The country currently accounts for
about 5% of the world's primary energy consumption and is forecast to claim 6% by 2025. Per capita energy consumption in Asia's third-largest
economy is among the lowest in the world, but is expected to be around the present levels of Japan by 2030.
Energy consumption
Transmission
Water Supply
Natural Gas
Four of India's five regional electricity grids are interconnected. Inter-regional transmission capacity totalled 28 GW in Mar 2012, accounting for
14% of generation capacity. While keeping its focus on adding generation capacity, the government has pledged to increase inter-regional
transmission to some 59 GW by 2015. State governments sell electricity to consumers at discounted rates and also grant capital subsidies to the
state utilities. Policies and electricity tariff rates are decided by the government. Issues to be addressed include unbundling, granting open access
to transmission and adopting loss reduction technologies.
Economic growth and urbanisation are widening the demand/supply gap of water and managing domestic water resources rationally and
sustainably is a national priority. Current water consumption is roughly in line with availability, but by 2030, water consumption is estimated to be
100% higher than water available. The uneven distribution of water resources, both geographically and seasonally, aggravate the problem. Less
than 50% of the urban population has access to piped water. Cities typically receive piped water for a few hours per day. Water utilities are run by
state, municipal or city authorities.
With a share of 10%, natural gas is India's third most important energy source and is expected to grow to 20% of the energy basket by 2025. About a fifth
of natural gas demand is currently met by imports. In 2013, India had some 14,000 kilometres of gas pipelines, some 75% of which were operated by state-
run gas utility GAIL. City gas distribution (piped natural gas or PNG) was available in some 50 geographical areas at the end of 2013.
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Source:
Main Sector Indicators
Main Sector Indicators
CEIC, CEA
Indicator FY 2013 FY 2012 Performance Trend
10-Year History
National GDP, (at constant prices, FY 2005 is base), INRbn 55,054.37 52,435.82
GDP growth (at constant prices, FY 2005 is base), % 4.99% 6.21%
Fiscal Deficit, INRbn 5,209.25 5,159.90
8-Year History
FDI Inflows in Power, USDbn (calendar years) 3.83
(Jan-Jul 2013) 38.57
Plan-Wise History**
Installed Generation Capacity, GW* 223.34 199.88
Gross Electricity Generation, TWh 963.72 922.45
Transmission Lines Installed, ckt km 17,107 20,434
Per Capita Electricity Consumption, kWh 917.20 883.60
10-Year History
All-India Plant Load Factor (PLF) (Coal & Lignite), % 69.93% 73.47%
Energy Deficit, % 8.71% 8.50%
Peak Deficit, % 9.00% 10.60%
*Includes Renewable Energy Sources (RES)
**Planwise databars show data for years:
FY 1966 (End of 3rd Plan); FY 1974 (End of 4th Plan); FY 1979 (End of 5th Plan); FY 1985 (End of 6th Plan); FY 1990 (End of 7th Plan); FY 1997 (End of 8th Plan); FY 2002 ( End of 9th Plan); FY 2007 (End of 10th
Plan); FY 2012 (End of 11th Plan); FY 2013 (First Year of 12th Plan);
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Source:
Power Sector Snapshot
Fossil Fuel Reserves of Key Countries, 2010
Natural Gas Demand Forecast
Projected Primary Energy Consumption in 2025
Fossil Fuel Availability
BP Statistical Review, Tata Power, India Energy Book 2012, World Energy Council, GAIL, Oil India Limited, NTPC, Planning Commission
88 38
3 35
308
92 36
211 179
498
33
19% 20%
6% 9%
6% 4% 2% 2% 1% 1% 1%
0%
5%
10%
15%
20%
25%
0
100
200
300
400
500
600
US
A
Chi
na
Japa
n an
d S
outh
Kor
ea
Wes
tern
Eur
ope
Rus
sia
Indi
a
Bra
zil
Sau
di A
rabi
a
Sou
th A
fric
a
Aus
tral
ia
Egy
pt
Years of Reserves Share of Primary Energy Consumption, %
Rank Country Energy Consumption
(Mtoe)
% of World
Consumption
1 China 4,055 24%
2 U.S. 2,722 16%
3 India 980 6%
4 Russia 814 5%
5 Japan 597 4%
Total World Consumption: 16,922 Mtoe
Demand from power generators outstrips domestic production of fossil
fuels (coal and gas). As a result, coal imports have been rising to support
the operation of plants not ordinarily functioning on imported coal.
Generation losses due to coal supply shortages have also been
increasing. India’s energy requirement is expected to grow four times the
current level to 2.0 BMT/year by 2031. To meet this demand, domestic
coal production has to grow between 7% and 9%. During the XII planning
period, thermal power plants are expected to require 842 MMT of coal,
against an estimated domestic availability of 604 MMT. The 238 MMT
shortfall is expected to be bridged by imports.
134 185 199
249 305
159
186 206
197
168
FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
Gap,MMSCMD
Supply,MMSCMD
473
293
371 405
446 Projected Gas Demand, MMSCMD
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Source:
Power Sector Snapshot (cont'd) (charts show Indian fiscal years)
Capacity Addition Targets (MW) for the XII Plan (2012-2017)
Private Sector Vs Total Capacity Additions
XI Plan (2007-12) Capacity Addition - Target Vs Actual
Energy Availability and Peak Supply Gaps
NTPC, Association of Power Producers (APP), CEA
Hydro, 9,204
Nuclear, 2,800
Gas, 1,086
Coal, 62,695
Total: 75,785 MW
82.7% 12.14%
3.7%
1.43%
39,829
27,952
10,760 15,220 16,732
23,012
Central Sector, MW State Sector, MW Private Sector, MW
Target Actual
38%
214%
60%
5,061 2,671
23,012
42,131
19,015 21,180
54,964
75,785
IX Plan (1997-2002) X Plan (2002-2007) XI Plan (2007-2012) XII Plan (2012-2017)(F)
Private Sector Capacity Addition, MW Total Capacity Addition, MW
27%
56%
42%
13%
Private Sector Capacity Addition as Percent of Total
Capacity Addition
-11.10%
-10.10%
-8.50% -8.50% -8.71%
-11.90%
-13.30%
-9.80%
-10.60%
-9.00%
-16.00%
-12.00%
-8.00%
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Energy Requirement/Availability Gap, %
Peak Demand/Supply Gap, %
Actual as Percent of Target
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Source:
Utilities as Percent of GDP
Industrial Production Index - Electricity
Utilities as % of GDP
IPI Weight, FY 2014 GDP Growth Forecasts
CEIC, EMIS Insight calculations
41,587 45,161
49,370 52,436
55,054
831 882 928 988 1,029
2.00%
1.95%
1.88% 1.88% 1.87%
1.80%
1.85%
1.90%
1.95%
2.00%
2.05%
0
20,000
40,000
60,000
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
All India GDP, INR bn (Constant Prices, FY 2005 is base)GDP Electricity, Gas and Water Supply, INR bn (Constant Prices, FY 2005 is base)Electricity, Gas and Water Supply GDP as % of Total GDP
53,036 61,089
72,670
83,535
94,610
911 1,139 1,310 1,448 1,702
1.72%
1.86%
1.80%
1.73%
1.80%
1.60%
1.65%
1.70%
1.75%
1.80%
1.85%
1.90%
0
20,000
40,000
60,000
80,000
100,000
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
All India GDP, INR bn (Current Prices)
GDP Electricity, Gas and Water Supply, INR bn (Current Prices)
Electricity, Gas and Water Supply GDP as % of Total GDP
123 131
138
149
155
2.75%
6.08% 5.50%
8.19%
3.95%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
0
20
40
60
80
100
120
140
160
180
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Industrial Production Index - Electricity, FY 2005 is base % y/y change
With a weight of 10.32%, electricity is the fourth-largest contributor to India's
industrial production index (IPI), preceded by manufacturing with 75.53%,
mining with 14.16% and basic metals manufacturing with 11.34%,
respectively, the statistical supplement of the Economic Survey of India for
FY 2013 showed. Chemicals and chemical products have a weight of
10.06% and food products and beverages – of 7.28%.
In June 2013, the IMF revised its GDP forecast for India for the current fiscal
year (FY 2014) to 5.6% from 5.8% issued in April.
In September 2013, HSBC cut its forecast for India's GDP growth to 4.0%
from 5.5%, while in October the World Bank lowered its forecast for FY 2014
to 4.7% from 6.1% estimated in April.
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Source:
Wholesale Price Index (WPI)
Wholesale Price Index (WPI), Fuel and Power and Subsectors, FY 2005=base
Wholesale Price Index (WPI), Electricity Subsectors, FY 2005=base
CEIC
100
120
140
160
180
200
220
240
Mar-12Apr-12
May-12Jun-12
Jul-12Aug-12
Sep-12Oct-12
Nov-12Dec-12
Jan-13Feb-13
Mar-13Apr-13
May-13Jun-13
Jul-13Aug-13
Sep-13Oct-13
WPI Fuel and Power WPI Fuel and Power - Coal WPI Fuel and Power - Mineral Oils WPI Fuel and Power - Electricity
100
120
140
160
180
200
Mar-12Apr-12
May-12Jun-12
Jul-12Aug-12
Sep-12Oct-12
Nov-12Dec-12
Jan-13Feb-13
Mar-13Apr-13
May-13Jun-13
Jul-13Aug-13
Sep-13Oct-13
WPI Electricity - Domestic WPI Electricity - Commercial WPI Electricity - Agriculture WPI Electricity - Railway Traction WPI Electricity - Industry
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Source:
FDI in Utilities (charts show calendar years)
Foreign Investments in Power in India
The Electricity Act of 2003 makes provisions for 100% FDI in the
Indian power sector under an automatic approval scheme and
offers incentives such as 16% assured post-tax return on equity in
current dollars and a five-year tax holiday.
In spite of this, FDI inflows in the power sector have been very
moderate and have not shown a trend to increase over the years.
India's total FDI inflows are about a fourth of those of China.
Between April 2000 and March 2012, the Indian power sector
attracted FDI equity inflows of some 4%, compared to 19% by the
service sector and 7% by telecommunications.
In May 2010, the country got its first FDI in the power sector in 54
months, when Singapore-based Sembcorp announced plans to
invest in a 49% stake in a 1,320 MW thermal power plant in
Andhra Pradesh.
In December 2011, Mauritius-based private equity fund Multiples
Private Equity, set up by an Indian national, sought government
approval to acquire a minority stake in the Indian Energy
Exchange (IEX), one of the two power exchange platforms in the
country. The move sparked a debate on whether the government
needs to clarify rules on FDI in such enterprises.
According to comments by India's largest thermal power producer
NTPC, the low FDI inflow in the power sector is indicative of
concerns of the foreign investors over the government's slow
progress in dealing with the sector's structural problems.
Indian Investments Abroad
CEIC
12.35 11.32 7.88 11.97 4.86 0.48
253.37
179.77
137.73 158.63
148.62
52.22
4.87%
6.30% 5.72%
7.54%
3.27%
0.93%
0%
2%
4%
6%
8%
0
50
100
150
200
250
300
2008 2009 2010 2011 2012 2013(Jan-Jul2013)FDI Inflows, Power, USD bn
Total FDI Inflows, USD bn
FDI Inflows in Power as % of Total FDI Inflows
17.52 17.45
40.51
33.94
25.60 25.73
0.14 0.82 0.09
0.36
0.15 0.04 0.81%
4.71%
0.23%
1.07%
0.59% 0.14% 0%
1%
2%
3%
4%
5%
0
10
20
30
40
50
2008 2009 2010 2011 2012 2013(Jan-Oct
2013)Total FDI Outflows, USD mn
FDI Outflows - Electricity, Gas and Water, USD mn
Electricity, Gas and Water Outflows as % of Total Outflows
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Power Sector Forecast
Soaring
Demand
India's demand for electricity may cross 300 GW earlier than most estimates, consulting firm McKinsey said in a report. The reasons for the optimistic forecast include faster growth of India's manufacturing sector in the future compared to the past, the rapid increase in domestic demand as the quality of life of Indians improves, and connection to the grid of some 125,000 villages. A demand of 300 GW will require about 400 GW of installed capacity, the McKinsey analysts pointed out, adding that blackouts and load shedding currently suppress demand.
Capacity
Additions
India will need between 600 GW and 1,200 GW of new power generation capacity before 2050, according to the International
Energy Agency (IEA). The technology and fuel sources India adopts as it adds this capacity may have a significant impact on
global resource usage and the environment.
Reliance on
Imported Coal
With a share of 58.3% of India’s total installed generation capacity, coal is the single most important fuel in domestic electricity generation. Reliance on imported coal has been steadily increasing in the past decade, with volume more than doubling to 80 MMT in FY 2012 from 30 FY in fiscal 2010. In comparison, domestic production has remained stagnant. Reliance on imported coal for power generation in India is expected to continue. Imported coal is forecast to account for some 20% of the coal-based generation and 19% of all generation in India by fiscal year 2017.
Natural Gas
Deficit
Net natural gas production dropped 15.94% to 38,945.61 MCM in FY 2013, against 46,326.91 MCM in the previous year, due to lower than anticipated production by both the public and private/JV sectors. The gap between natural gas demand and supply is expected to grow. The gas requirement of the power sector in fiscal 2017 is forecast at 100 MMSCMD. Due to the unfavourable demand/supply balance of hydrocarbons in India, the government is encouraging national oil companies to pursue equity oil and gas opportunities abroad as well as explore domestic shale gas deposits.
Nuclear Power
India has a largely indigenous nuclear power program and expects to have 14,600 MWe nuclear capacity by 2020. It aims to supply 25% of electricity from nuclear power by 2050. The government has adopted a vision for the country to become a world leader in nuclear power, due to its expertise in fast reactors and thorium fuel cycle. The use of thorium for nuclear power generation was developed in India due to its limited availability of indigenous uranium and its being largely excluded from nuclear trade for some 30 years. The country is a nuclear power and has not signed the Nuclear Non-Proliferation Treaty.
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Comments
Source:
Electricity Utilisation, Consumption Forecast
The national, regional and state findings of the 18th Electric Power Survey of India were released in September 2011. The Electric Power Survey
Committee (EPSC) convened to forecast annual electricity demand for states, union territories, regions and the whole country, up to the end of the 12th
Planning Period in fiscal 2017. Another task on the committee agenda was to project electricity demand for the 13th and 14th Planning Periods, i.e. up to the
end of fiscal years 2022 and 2027, respectively.
Electricity Utilisation Pattern Forecast, % Rural, Urban Electricity Consumption Forecast, %
18th Electric Power Survey of India (most recent available)
26.38% 26.44%
10.60% 11.52%
18.96% 17.86%
35.79% 36.35%
8.27% 7.83%
0%
20%
40%
60%
80%
100%
120%
FY 2017 FY 2022
Domestic Commercial Irrigation Industrial Others
44.55% 31.23%
40.91%
61.64% 60.87%
41.24%
55.45% 68.77%
59.09%
38.36% 39.13%
58.76%
0%
20%
40%
60%
80%
100%
120%
Northern Western Southern Eastern North-Eastern All India
Urban Rural
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Source:
Energy Requirement and Peak Load Forecast
Energy Requirement Forecast, GWh
Energy Requirement and Peak Load Forecast by Region
All India Energy Requirement and Peak Load Forecast
18th Electric Power Survey of India
Region FY 2014 FY 2015 FY 2016
Northern 324,206 353,738 386,382
Western 313,465 337,289 362,901
Southern 280,709 301,823 324,033
Eastern 129,725 140,637 151,668
North-Eastern 12,621 13,703 14,878
All India 1,076,327 1,159,201 1,248,456
FY 2017 FY 2022 FY 2027 FY 2032
Region Energy
Requirement, GWh Peak Load, MW
Energy
Requirement, GWh Peak Load, MW
Energy
Requirement, GWh Peak Load, MW
Energy
Requirement, GWh Peak Load, MW
Northern 422,498 60,934 59,400 86,461 840,670 121,979 1,135,543 164,236
Western 394,188 62,015 539,310 86,054 757,318 120,620 1,028,974 163,222
Southern 357,826 57,221 510,786 82,199 727,913 118,764 1,017,526 165,336
Eastern 163,790 24,303 236,952 35,928 349,412 53,053 480,046 72,874
North-Eastern 16,154 2,966 23,244 4,056 33,952 6,169 46,921 8,450
All India 1,354,874 199,540 1,904,861 283,470 2,710,058 400,705 3,710,083 541,823
1,354,874 1,904,861 2,710,058 3,710,083
199,540
283,470
400,705
541,823
0
200,000
400,000
600,000
0
1,000,000
2,000,000
3,000,000
4,000,000
FY 2017 FY 2022 FY 2027 FY 2032
All India Energy Requirement, MU, (l) Al India Peak Load, MW, (r)
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Source:
Power Generation Forecasts
Coal Consumption Trend Forecast
Transmission and Distribution Losses Forecast, %
Power Generation Mix Forecast, %
CRIS Analysis, 18th Electric Power Survey of India
Region FY 2017 FY 2022
Northern 20.13 16.12
Western 19.12 14.91
Southern 16.78 15.44
Eastern 19.36 14.22
North-Eastern 22.71 18.65
All India 18.9 15.39
54% 54% 55% 53% 53%
14% 16% 17% 19% 19%
10% 9%
8% 8% 7%
22% 21% 20% 20% 19%
0%
20%
40%
60%
80%
100%
120%
FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
Domestic Coal Imported Coal Gas Hydro & Renewables
2%
11% 10% 10%
11%
15%
21%
15%
11%
3%
17% 18%
19% 19% 20%
FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
Increase in Domestic Coal Consumption, % Increase in Imported Coal Consumption, %
Imports as % of Total Coal Consumed
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Source:
Water Supply Forecast
Water Demand Forecast by Sectors, bcm
According to the Asian Development Bank (ADB), India's
population is likely to total around 1.6 billion people in
2050. Food requirement is estimated at 400 million metric
tonnes (MMT), against current food production at about
230 MMT.
From a water supply perspective, India will have to extend
irrigation to currently rain-fed areas to meet this demand.
The Ministry of Water Resources forecast total water
requirement in 2050 for all sectors including irrigation,
domestic, industry, power, inland navigation, ecological,
and evaporation losses, at 1,180 billion cubic meters
(bcm). The return flows have been estimated at 259 BCM,
giving a net requirement of 921 BCM for 2050.
Climate change impact is expected to increase
demand, mainly for agriculture, due to increased
evaporation from cropped areas.
An expert committee on Indian urban infrastructure and
services has estimated the total capital investment
needed in the urban water and sewage sector at INR
7,546.27bn over the next 20 years.
Average Annual Water Resource Potential, bcm, 2030
Ministry of Water Resources, Asian Development Bank, 2030 Water Resources Group, Planning Commission
543
43 37 19
807
111 81 70
Withdrawals forAgriculture
Withdrawals forMunicipal and
Household Use
Industrial Withdrawals Power Withdrawals
2010 2050 Water Requirement Projection for All Sectors, 2050 – 921 BCM
Surface Water (SW), BCM, 2,118
Ground Water (GW), BCM, 400
Available Water Resources
Surface Water (SW), BCM, 514
Ground Water (GW), BCM, 230
Utilizable Water Resources
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Source:
Employment and Salaries
Daily Average Number of Employees
Employment in Utilities
Average Daily Wages in Utilities
CEIC
946 940 920 910 870 860 850 850
800 840 840 830
41 50 40 50 50 50 40 50 50 60 60 70
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Employment in Electricity, Gas and Water Utilities - Public Sector, thou persons Employment in Electricity, Gas and Water Utilities - Private Sector, thou persons
FY 2009 FY 2010
Daily Avg No. of Employees in
Electric Power Generation,
Transmission and Distribution
26,913 28,926
Daily Avg No. of Contract Workers in
Electric Power Generation,
Transmission and Distribution
8,034 13,600
Daily Avg No. of Employees in Water
Collection, Treatment and Supply 833 452
Daily Avg No. of Contract Workers in
Water Collection, Treatment and
Supply
169 N/A
Daily Avg No. of Employees in
Sewerage 1,156 937
Daily Avg No. of Contract Workers in
Sewerage 170 385
472.27
263.59 291.5
550.71
462
365.17
Average Daily Wage in ElectricPower Generation,
Transmission and Distribution,INR
Average Daily Wage in WaterCollection, Treatment and
Supply, INR
Average Daily Wage inSewerage, INR
FY 2009 FY 2010
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II. Utilities Government Policy
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Source:
Power Sector Government Policy
Key Bodies
The Ministry of Power (MoP) of India - acts as a liaison between the central government and state utilities of public and private
ownership, as well as oversees rural electrification projects.
The Central Electricity Authority of India (CEA) – MoP's planning arm, provides advise to the central and state governments and
regulatory commissions on technical matters relating to generation, transmission and distribution of electricity. It also provides
operational advise to state governments and utilities.
Central Electricity Regulatory Commission (CERC) – a key regulator of the power sector in India, in charge of overseeing the tariffs
of state-owned power generating companies and regulating interstate transmission of energy.
Other
Institutions
The Ministry of Coal is in charge of exploration of the coal and lignite reserves of India, as well as of production, supply, distribution
and price of coal through government-owned coal major Coal of India Limited (CIL).
The Department of Atomic Energy (DAE) of India is a body directly under the Prime Minister, in charge of nuclear technology,
nuclear power and research.
The Ministry of New and Renewable Energy (MNRE) – the chief institution in charge of implementing renewable energy policies and
programs in India. It was established as Ministry of Non-Conventional Energy Sources in 1992 and assumed it current name in 2006.
The Petroleum & Natural Gas Regulatory Board (PNGRB) Act of 2006 provides the legal framework for the development of the
natural gas pipelines and city or local gas distribution networks.
Electricity Act
2003
The Electricity Act, 2003, is a key legislation regulating generation, distribution, transmission and trading in power in India. It replaced
laws adopted in 1910 and 1948 which were unable to meet modern-day electricity demand and realities. The act de-licenses power
generation, except for hydropower projects over a certain size, de-licenses distribution in rural areas and introduces a licensing regime
for distribution in rural areas. In addition, the act stipulates that 10% of the power distributed to consumers has to be generated from
renewable and non-conventional sources of energy.
Power Finance Corporation Ltd. (PFC) is the financial backbone of the Indian power sector. It provides financial assistance for
power projects across India and also provides funding to State Electricity Boards (SEBs) (which are both electricity regulation boards
and power generating companies), central and state sector power utilities and private companies.
CEA, Power Ministry, CERC, Coal Ministry, DAE, MNRE, PNGRB, PFC
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Power Sector Government Policy (cont'd)
Power
Legislation
National Electricity Policy, 2005 – adopted as required by the Electricity Act of 2003. Policy sets priority on hydropower, highlights the need for increased use of natural gas and nuclear power, pledges to make thermal power less polluting by using low-ash coal and sets recommendations for improving the transmission and distribution of power.
National Water Policy, 2005, Small Hydropower Policy, 2007 (for plants with capacity of below 20 MW), Hydropower Policy, 2008 - emphasis on development of India’s full hydropower potential, states encouraged to develop workable PPP projects.
The Energy Conservation Act of 2001 was adopted to promote energy saving, reduce India’s energy intensity and curb energy wastage. The act was amended in 2010. The Bureau of Energy Efficiency (BEE) is a Government of India agency under the Ministry of Power, in charge of encouraging the conservation and efficient use of energy in India. BEE was set up in 2002 under the provisions of the Energy Conservation Act of 2001.
Rural
Electrification
Scheme
(RGGVY)
A comprehensive scheme of rural electricity infrastructure and household electrification for providing access of electricity to all rural
households was launched by the government of India in Apr 2005. Under the scheme, called Rajiv Gandhi Grameen Vidyutikaran
Yojana (RGGVY), state capital subsidy is provided for projects under the following panels: Rural Electricity Distribution Backbone
(REDB), Creation of Village Electrification Infrastructure (VEI), Decentralised Distributed Generation (DDG) and Supply and
Electrification of Below Poverty Line Households. In addition, states develop their own Power Distribution and Rural Electrification
Projects. Some 80% of India's inhabited villages were electrified and 44% of the rural households had access to electricity, according
to the 2001 Census. As of July 31, 2011, 96% of India's villages had access to electricity, the Planning Commission said in its report
on Power in the XII Planning Period (2012-17).
Ultra Mega
Power
Projects
(UMPP)
Projects under this initiative, aimed at bridging the gap between India’s power demand and supply, are awarded to developers on the basis of competitive bidding, by the Ministry of Power in association with CEA and PFC. Each of the coal-based projects has about 4,000 MW capacity.
According to the government's Economic Survey for FY 2012, four UMPPs at Sasan in Madhya Pradesh, Mundra in Gujarat, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand, respectively, had been awarded to developers. The Mundra UMPP, owned by Tata Power and functioning on coal imported primarily from Indonesia, started operations in March 2012. The Tiliaya UMPP, awarded to Reliance Power, is expected to be up and running in 2015.
A 50,000 MW hydroelectric initiative, aimed at building a combined 50,000 MW of hydropower capacity in 16 states, was launched in 2003. UMPPs are regulated by the Revised Mega Power Project Policy of 2009.
World Resources Institute, Planning Commission, India Economic Survey 2011-12, Reliance Power
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Power Sector Government Policy (cont'd)
Energy
Efficiency
Management
National Mission on Enhanced Energy Efficiency (NMEEE) – an Indian government initiative designed to address inefficient energy
use, developed under the Energy Conservation Act of 2001. A major energy saving initiative is the Perform, Achieve, Trade (PAT)
scheme. PAT is a trading mechanism aimed at stimulating high-energy-consuming industries to implement energy efficiency measures
and to comply with energy consumption targets set by the Bureau of Energy Efficiency. Under PAT, 478 Designated Consumers (DCs)
have been selected from eight industrial sectors including the power sector. The DCs have been given targets to reduce energy
consumption by March 2015. If the DCs are unable to achieve the allocated targets, they would be either required to purchase Energy
Saving Certificates (ESCerts), or pay penalty corresponding to the shortfall in their target achievements.
Financial
Incentives to
Electrical
Utilities
India's Finance Act of 2012 provided a number of incentives to the domestic power sector. Steam coal has been fully exempted from
basic custom duty and countervailing duty (CVD) has been reduced to 1% until March 31, 2014. Coal mining projects have also been
fully exempted from basic custom duty on imports. Import duties on natural gas have been scrapped. Tax withholdings on External
Commercial Borrowing have been reduced to 5% from 20% and income tax exemption rules have been extended to power plants that
had started generation by the end of the FY 2012 in March.
Reforms in
Distribution
Power distribution is a highly regulated segment, so government policies play a crucial role in its development. Power distribution in
India, a link between power consumers and generators, is plagued by high distribution losses and low billing recovery, which results in
the poor financial health of utilities. The Accelerated Power Development and Reform Program (APDRP) was launched in FY 2003
to improve the financial viability of state utilities, reduce transmission and distribution (T&D) losses and improve the reliability, quality
and availability of power supply. In FY 2008, the government introduced the Re-Structured Accelerated Power Development and
Reforms Program (R-APDRP) to implement IT systems for distribution and launch large-scale distribution franchising.
NTPC, Tata Power, Chandigarh Engineering Dept.
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Renewable Energy Government Policy
Market
Mechanisms
Details
Significance
Technologies for power generation from Renewable Energy Sources (RES) are evolving and
the Indian RES market is expected to mature rapidly. As a result, the cost of renewable-based
generation is expected to decrease. The Indian RES market functions under two government-
promoted mechanisms – Renewable Energy Certificates (REC) and Renewable Purchase
Obligations (RPO). RECs are a policy mechanism to promote RE-based power generation in
India. RPO is being implemented throughout the country to create demand for renewable
energy. Under the Electricity Act 2003, the National Electricity Policy 2005 and the Tariff Policy
2006, State Electricity Regulatory Commissions (SERCs) are required to purchase a certain
percentage of power from renewable energy sources.
Various State Commissions have established an RPO obligation for their distribution companies. They have also determined the tariffs for RES generation based on different technologies. However, the specified RPO varies from 1% to 10% across the country. At the same time, there is wide divergence in the tariffs of different technologies set by different Regulatory Commissions. REC is aimed at addressing the mismatch between the availability of RE resources in states and the requirement of the obligated entities to meet the RPO. Under the REC mechanism, RE generators have two options - to sell the renewable energy at a preferential tariff or to sell the two cost components of RE generation – (1) electricity generation and (2) environmental attributes associated with RE generation - separately. The environmental attributes can be exchanged in the form of RECs.
Subsequent to the launch of the Jawaharlal Neru National Solar Mission (JNNSM) in 2010, almost every state announced a solar-specific percentage as a part of the overall RPO. These are currently in the range of 0.25% to 0.5% and are expected to go up to 3% by 2022. Solar generation is complemented by solar‐sector specific RECs. RECs are issued to RE generators for 1 MWh of RE electricity injected into the grid, and are valid for 365 days after the date of issuance. Purchase of RECs is equivalent to purchase of RE for RPO compliance. Strengthening the REC mechanism is expected to help manage the liquidity in the RE market by allowing states that lack RE sources to meet their RPO. There could be significant opportunities in the RE sector, depending on how the REC market evolves, and also on whether regulators penalise distribution companies that do not meet their RPO.
Mid-Term Potential
The Planning Commission estimated the total medium-term (up to FY 2032) potential for power generation from RE sources, such as wind, small hydropower plants, solar, waste-to-energy and biomass, in India at some 183,000 MW.
Government measures to boost RE energy
development:
Fiscal and financial incentives such as capital/interest subsidies and nil or lowered excise and customs duties.
Preferential tariff for grid-interactive renewable power in most states.
FDI of up to 100% under the automatic route.
JNNSM targeting 2,000MW of grid-connected solar power by 2022.
Council of Energy, Environment and Water, Tata Power, NTPC
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Source:
Urban Water Supply Government Policy
Strain on
Urban
Infrastructure
According to the United Nations Population Division, between 500 and 600 million Indians, equivalent to roughly half of the country’s
population, will live in cities by 2030. As a result, urban infrastructure is coming under severe pressure. In an attempt to boost urban
infrastructure development, the Indian government launched the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) in
December 2005 to fast-track the development of 65 cities across the country. The initiative envisaged spending USD 11bn over
seven years on water, sanitation, drainage, solid waste management, roads, transport and urban renewal. Water supply projects
under JNNURM focus on goals such as reducing non-revenue water (NRW) below 15% and introducing volumetric tariffs, 100%
metering of all connections as well as a 24-hour water supply, among others.
Urban
Renewal
Mission
JNNURM covered 65 Mission Cities and several hundred non-mission cities. The interventions in the Mission Cities are covered by
two sub-missions called Urban Infrastructure and Governance (UIG) and Basic Services to the Urban Poor (BSUP). The non-mission
cities, on the other hand, have two sub-schemes called Urban Infrastructure Development Scheme for Small and Medium Towns
(UIDSSMT) and Integrated Housing and Slum Development Programme (IHSDP). The UIG and UIDSSMT components are managed
by the Ministry of Urban Development (MoUD), while Ministry of Housing and Urban Poverty Alleviation (MoHUPA) is the nodal
agency for the other two components.
Steps to
Improve Urban
Water Sector
According to a report by ADB and another by the Indian Planning Commission on water guidelines for the 12th planning period ending
2017, measures that need to be adopted to address the issues faced by the urban water sector include making the installation of
rainwater harvesting systems mandatory for all public and private buildings, levying progressive water tariffs to discourage waste of
water while providing a basic quantity of water at a low price, introducing mandatory water supply metering, developing a suitable
strategy for operation and maintenance of the assets of water utilities, empowering local bodies to impose penalties for water wastage,
encouraging the usage of low-volume flushing cisterns and promoting the recycling of wastewater.
CEA, UN Population Division, Grant Thornton, ADB, Indian Planning Commission
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LPG, PNG Government Policy
Subsidy
Details
The total amount of the LPG subsidy was INR 19.89bn in FY 2013, according to data by the Petroleum Planning and Analysis Cell. As
of Aug 16, 2013, LPG's cost to Oil Marketing Companies (OMCs) (desired price) was INR 807.98 per cylinder. The price OMCs
charged to retailers (depot price) was INR 373.41, and the retail price charged to consumers was INR 410.66. The difference of INR
434.57 between the desired and the depot price represents the OMCs’ under-recoveries per cylinder as of that date. The central
government subsidy totalled INR 22.58. The remaining INR 411.99 (to INR 434.57) were shared by upstream (oil producing)
companies and the OMCs themselves.
Consumers
Must Make a
Choice
Households pay for PNG less than they do for subsidised LPG, which results in many using PNG, while continuing to get refills of their
LPG bottles. In early 2009, the government said households using PNG will have to give up their LPG connections. Authorities also
authorised state-owned OMCs to develop a mechanism for blocking multiple or back-up LPG connections, the newswire added.
According to a report by The Hindu dated Oct 20, 2013, India is home to some 140 million LPG connections, of which 25 million are
believed to be multiple LPG connections or to exist parallel to PNG infrastructure. Some 6.3 million of these have already been
blocked by OMCs.
LPG
Connection
Portability
In early 2013, the government launched an LPG portability scheme allowing consumers to change LPG dealers but not the supplying
oil company. In October, the scheme - which is available in 24 cities across India - was enhanced by the possibility for consumers to
buy small 5-kg cylinders at retail company-owned company-operated outlets (COCO), which account for some 3% of all filling stations
in the country. According to an Oil Ministry official, inter-company portability was not legally possible, as the current law required LPG
cylinders belonging to a particular company to be refilled only by that company. The ministry was looking into ways to amend the law
or allow users to return their bottles before signing up for a new connection to a different company, the official added.
The Indian government controls fully the prices of LPG and kerosene and partially de-controlled those of petrol and diesel in 2010 and 2013, respectively. Subsidies are provided on 14.2 kg LPG cylinders sold to households under the PDS Kerosene and Domestic LPG Scheme of 2002. Subsidised LPG is termed "domestic" and is only for residential usage. In September 2012, the government limited subsidised LPG to six cylinders per household a year but in December said it would raise the cap to nine cylinders per year. As of December 2012, subsidised LPG cost INR 410.66 per cylinder, against a market price of some INR 896 per 14.2-kg bottle. The price of 19-kg commercial-usage cylinders is market-linked and higher than the market price of the 14.2-kg bottle.
Petroleum Planning and Analysis Cell, International Institute for Sustainable Development/The Energy and Resources Institute, EMIS Insight
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III. Power Generation - Overview
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Power Sector Highlights
Installed
Capacity
India's power generation sector boasts the world's fifth-largest installed capacity, at 223.34 GW as of March 31, 2013. Captive
power plants generate additional 43.3 GW. Thermal power plants, fuelled by coal, gas and diesel, constituted more than 67% of
the installed capacity, with coal alone accounting for 58.3% of capacity at the end of FY 2013 in March. Hydro power plants and
those using renewable energy sources had shares of some 17.7% and 12.32%, respectively.
Demand
Outstrips
Availability
Electricity demand in India traditionally outstrips availability, both in terms of base load energy and peak availability. In FY 2013,
base load requirement was 998,114 GWh against availability of 911,209 GWh, which translated into an 8.7% deficit. The
percentage dipped slightly from FY 2012, when peak load demand was 130 GW, against availability of 116 GW, which resulted
in a 10.6% deficit. Peak load deficit was 9.0% in FY 2013.
Electricity
Subsidies
State governments sell electricity to consumers at discounted rates and also grant capital subsidies to the state utilities. Policies and electricity tariff rates differ among states and between consumer categories in each state. State utilities compute tariffs on the basis of revenue required and sales forecasts. Tariffs are subject to approval by state regulatory commissions. The approved tariffs are often lower than those suggested by the companies. State governments then compensate utilities with a cash subsidy that is supposed to be paid in advance for the upcoming financial year but is often paid later.
Network
Losses
India's transmission and distribution (T&D) losses totalled 23.65% of distributed electricity in FY 2012, against a world average
of some 15%. According to expert estimates, technical factors contribute up to 20% of total losses. Non-technical losses result
from illegal tapping of lines and the installation of faulty electric meters that underestimate actual consumption, among others.
Intermittent
Supply
More than 300 million Indians, comprising nearly half of the rural and 6% of the urban population, had no access to electricity
as of December 2011. Industry experts often criticise the electricity supply in India as intermittent and unreliable with blackouts
and power shedding interrupting irrigation and manufacturing across the country.
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Comments
Source:
Power Generation, Electricity Demand
In India, a kilowatt hour is called a unit of energy. Energy is traditionally measured in Million Units (MU) = million KWh and Billion Units (BU) = billion KWh.
1 MU = 1 Gigawatt hour (GWh), and 1 BU = 1,000 MU = 1 Terawatt hour (TWh). For example, 855 BU=855,000 MU=855 TWh. All power and electricity
figures taken from Indian sources and measured in MU and BU, have been converted to GWh and TWh for convenience.
On the other hand, 1 TWh per year = 114 megawatts (MW). [1 megawatt = 10^6 watts; 1 terawatt = 10^12 watts. 1 year = 8,765.813 hours.]
Power Generation, TWh, FY 2013 Electricity Consumption by Sectors, GWh, FY 2013
Tata Power, NHPC, NTPC, CEA, 18th Electric Power Survey of India Report
Household 185,858
Commercial 71,019
Industrial 382,670 Traction 15,431
Agriculture 140,960
Others 44,809
1.81%
17.95%
5.25%
21.79%
8.33%
44.87%
Total
Consumption
(figure by
CEA):
852,902 GWh 708.81
760.68
130.51 113.72
32.29 32.87
5.28 4.79
0
100
200
300
400
500
600
700
800
900
1,000
FY 2012 FY 2013
Import fromBhutan
Nuclear
Hydro
Thermal
912.06 876.89
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Comments
Source:
Installed Capacity and Capacity Additions in FY 2013
India's total installed capacity was 223.34 GW as of March 31, 2013, the world's fifth-largest. Capacity additions expected in FY 2014 total 18,432 MW,
comprising 15,234 MW of thermal, 1,198 MW of hydro and 2,000 MW of nuclear power stations. The country's gross energy generation from the power
plants in operation and those expected to be commissioned by the end of FY 2014, has been assessed at 975 TWh, the Central Electricity Authority (CEA)
said.
The number of villages with provided access to electricity jumped by 37,099 to 593,732 in FY 2013 from 556,633 in FY 2012.
Installed Generating Capacity (GW) by Type of Fuel, FY 2013 Installed Capacity by Sector (GW), FY 2013
Central Electricity Authority, Tata Power, NTPC, Infraline Reports
17%
Hydro 39.5
Coal (Thermal) 130.2
Gas (Thermal) 20.1
Diesel (Thermal) 1.2
Nuclear 4.8
RES 27.5
Total:
223.34 GW 58.3%
9%
12.32%
17.7%
2.15%
Companies owned by the Central Government
(Central Sector) 89.12
Companies owned by State
Governments (State Sector) 68.9
Private Companies
(Private Sector) 65.36
39.91%
68.9%
29.26%
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Comments
Source:
Capacity Utilisation and Per Capita Consumption
Capacity utilisation in the Indian power sector is measured by a Plant Load Factor (PLF). Plant Load Factor is the ratio of the actual output of a power
plant over a period of time and its output if it had operated a full capacity of that time period.
Plant Load Factor = Gross Generation / (Installed Capacity * Number of Hours).
Per Capita Consumption = Gross Electrical Energy Availability/Mid-Year Population.
Per capita electricity consumption in India about one-third of the world’s average, but is expected to reach 5,000-6,000 kWh by 2050, which would require
about 8,000 TWh per year.
Thermal Power Capacity Utilisation, PLF % All India Annual Per Capita Consumption of Electricity
CEA, NTPC, Sterlite Technologies
465
559
672
884
917
FY 1997 (End of 8th Plan)
FY 2002 (End of 9th Plan)
FY 2007 (End of 10th Plan)
FY 2012 (End of 11th Plan)
FY 2013 (1st Year of 12th Plan)
Per Capita Electricity Consumption, kWh
82.01%
68.35% 67.27%
76.19% 73.47%
79.18%
65.54% 62.16%
75.69%
69.93%
Central PLF, % State PLF, % IPP PLF, % Private PLF, % All India PLF, %
FY 2012 FY 2013
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Comments
Source:
Energy Requirement/Availability Gap
India's energy requirement and availability are forecast at 1,048,533 GWh and 978,301 GWh for FY 2014, respectively. This translates into a shortage of 70,232
GWh, or a deficit of 6.7%, according to CEA. India's energy requirement outstripped availability between FY 2009-2013. Both requirement and availability reported
annual increases in the observed years, so that the gap between requirement and availability remained essentially unchanged. In percentage terms, the energy
requirement deficit reported an average value of -9.4% between FY 2009-2013. Therefore, a constitutional gap between requirement and availability exists in the
country. In the future, as demand grows further, India will have to either boost generation capacities by exploiting more own resources, increase inter-state power
trading or rely on imports.
All India Energy Requirement/Availability Gap Requirement/Availability Gap by Regions, FY 2013
CEA, EMIS Insight calculations
300,
774
296,
475
281,
842
107,
457
11,5
66
273,
240
286,
683 23
8,05
8
102,
510
10,7
18
-9.20%
-3.30%
-15.50%
-4.60%
-7.30%
-18%
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Northern Western Southern Eastern North-Eastern
Requirement (GWh) Availability (GWh) Demand Deficit, %
-4,947 -43,784 -9,792
-848 -27,534
Deficit, GWh
777,
039
830,
594
861,
591
937,
199
998,
114
691,
038
746,
644
788,
355
857,
886
911,
209
-11.10%
-10.10%
-8.50% -8.50% -8.71%
-12%
-10%
-8%
-6%
-4%
-2%
0%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Requirement (GWh) Availability (GWh) Demand Deficit, %
-79,313 -73,236
-83,950
-86,905
-86,001
Deficit, GWh
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Comments
Source:
Peak Load Demand/Supply Gap
India's peak demand and supply are forecast at 144,225 MW and 140,964 MW for FY 2014, respectively. This translates into a shortage of 3,261 MW, or a
deficit of 2.3%, according to CEA's Annual Load Generation Balance Report (LGBR) for FY 2014. Considering transmission constraints, however, the
anticipated peak shortage increases to 6.2%, CEA added. Similarly to energy requirements and availability commented on in the previous slide, peak load
demand and supply reported increases between FY 2009-2013. Deficit remained large, at an average value of -10.9%, but in the years after FY 2010, it
has been smaller compared to 2010, perhaps due to utilities striving to add capacities to reduce power cuts. Peak load demand is set to further increase in
the future, not only because of current consumer usage, but also as a result of new consumer additions under the rural and urban electrification programs.
Peak Demand-Supply Gap Peak Demand-Supply Gap by Regions, FY 2013
CEA, EMIS Insight calculations
45,8
60
40,0
75
38,7
67
16,6
55
1,99
8
41,7
90
39,4
86 31
,586
15,4
15
1,86
4
-8.90%
-1.50%
-18.50%
-7.40% -6.70%
-20%
-18%
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Northern Western Southern Eastern North-Eastern
Demand (MW) Supply (MW) Demand Deficit, %
-1,240 -7,181
-589
-134
-4,070
Deficit, MW
109,
809
118,
472
122,
000
130,
006
135,
453
96,7
85
102,
725
110,
000
116,
191
123,
294
-11.90%
-13.30%
-9.80% -10.60%
-9.00%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Demand (MW) Supply (MW) Demand Deficit, %
-12,000 -15,747
-13,024
-13,815
Deficit, MW
-12,159
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IV. Power Generation by Type of Fuel
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Source:
Coal
Sufficiency of Coal Reserves in Meeting India's Power Demand
With a share of 58.3% of India's total installed generation
capacity, coal is the single most important fuel in domestic
electricity generation.
Some 75 thermal power projects depend on government-
owned Coal India Ltd. (CIL) for supplies. Power projects
absorb about 80% of domestic output. It takes some 5,000
tonnes of coal to generate 1 MW of power.
CIL accounted for about 81% of the total coal produced in
India in FY 2013. The country’s ever-increasing demand for
coal is expected to total 980 million tonnes by FY 2017. The
power sector is to account for some 70% of this demand.
In FY 2013, CIL reported output of 452.21 million tonnes of
coal, against 435.84 million tonnes in FY 2012.
Domestic coal availability is challenged by a number of
issues including bottlenecks in capacity expansion of CIL and
coal block allocation, tribal land acquisition and
environmental and forest clearances. Most of India’s coal
deposits are located under forest land.
Coal-based plants also face issues related to water
availability and ash disposal.
Thermal coal imports are needed to bridge the gap between
demand and domestic coal availability.
Reliance on imported coal has been steadily increasing in the
past decade, with volume more than doubling to 80 MT in FY
2012 from 30 MT in FY 2010. In comparison, domestic
production has remained stagnant.
Share of Coal-Fired Plants in Total Installed Capacity, 2012
Tata Power, Sterlite Technologies, CRIS Analysis, Coal India
39,761 24,492 12,879 9,297 8,871 5,490
40
22
12 9 9
5
0
5
10
15
20
25
30
35
40
45
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Jharkhand Orissa Chhattisgarh AndhraPradesh
MadhyaPradesh
Maharashtra
Top 6 States with Proven Coal Reserves (million tonnes)
No. of Years Reserves Can Support India's Power Requirement
56%
92%
77% 76%
India South Africa China Australia
Share of Coal-Fired Plants in Total Installed Electricity Capacity, 2012
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Source:
Coal (cont'd)
CIL Production and Dispatch to Power Sector
As of March 31, 2013, the President of India held 90% in
CIL. The remaining 10% were owned by Indian and
overseas financial institutions, pension funds and other
investors, following a 2010 IPO. The government of India
has repeatedly stated it aimed to further reduce its stake
in CIL through share offers in the markets, a Sep 2013
report by the Institute for Energy Economics and Financial
Analysis (IEEFA) and Greenpeace said.
CIL's current measure of its extractable reserves, by its
own research subsidiary the Central Mine Planning and
Design Institute Limited (CMPDIL), is 16% below the
estimates contained in the 2010 IPO papers, the IEEFA
and Greenpeace report added.
There remains significant uncertainty about the true extent
of CIL’s extractable reserves. The Indian Chamber of
Commerce considers an accurate account of CIL’s
extractable reserves as a critical reform to India’s coal
policies.
Domestic coal prices have grown at a slower rate than
imported coal prices over the past five years. Imported
coal is forecast to account for some 20% of the coal-
based generation and 19% of all generation in India by FY
2017, CRISIL said.
As the reliance on imported fuel grows, power tariffs need
to become more reflective of costs and fuel prices, the
research agency added.
Indian Coal Production and Imports
Tata Power, CRIS Analysis, Ministry of Coal, IEEFA, Greenpeace
395 420 430 440 452
285 299 304 310 312
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
CIL Production, MT Dispatch to Power Sector, MT
362 397
419 440 442
27 28 30 46 80
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012
Domestic Coal Production, MT Imported Coal, MT
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Source:
Legal Framework for IPP Projects in India
Legal Options for Establishing IPP Projects in India
Trilegal
Power off-take
arrangements
depend upon
the scheme
the IPP is set
up by.
The power producer does not enter
into long term off-take arrangements,
and instead sells power on a short-
term basis on the spot market or
through .a power exchange.
In January 2011, the Ministry of Power decreed that all long-term power procurement by state governments and
distribution companies should be made under the competitive bidding process.
The Competitive Bidding Guidelines require project developers to bid on the basis of a level annual tariff.
Winning bidders sign a standard-form power purchase agreement (PPA) drafted by the Power Ministry.
The Competitive Bidding Guidelines provide for
two bidding models:
Case I Route - the project developer is
responsible for arranging consents, land and
fuel for the power project; and
Case II Route - the procurer undertakes to
bear higher risk by arranging land and fuel
linkages for the project.
The effect of the introduction of competitive
bidding has been estimated as positive, but a
major problem is that the contractual
framework does not provide power producers
with flexibility to react to issues such as coal
shortage or increase in coal prices, leading to
project developers running a significant risk of
default. Considerable certainty on fuel price
and availability is necessary for bidders to
accurately price their bids. However, obtaining
an assured domestic coal supply arrangement
has become a challenge resulting in producers
often failing to meet their agreements with off-
takers.
A memorandum of understanding
(MoU) is negotiated and executed
with a state government for setting
up the project within its jurisdiction.
A merchant plant
Under the negotiated
route (MoU route)
Under a competitive
bidding process
The IPP candidate bids for an
identified project under the
Competitive Bidding Guidelines.
Power procurement in the Indian
market is increasingly being done
through competitive bidding.
In India,
there are
three options
for setting up
an
Independent
Power
Producer
(IPP) project:
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Source:
Competitive Bidding Policy
Coal Supply
Coal Supply
Problems
Way Out of
Coal Supply
Problems
The Ministry of Coal grants coal allocation under a long-term or a short-term linkage. To
obtain a long-term linkage, project developers file an application with the Ministry, which
issues a letter of assurance (LoA). Following fulfilment of milestones set out in the LoA, the
IPP signs a standard-form Fuel Supply Agreement (FSA) with a government-owned coal
producer [e.g. Coal India Limited (CIL)]. Under the FSA, the coal supplier guarantees up to
50% of the IPP’s requirements, which is a significant risk for the project developer. In
agreements signed in late 2012 and Jan 2013, CIL guaranteed coal supplies meeting at
least 80% of plants’ requirements (see next slide).
IPPs are entitled to full capacity charges when selling power only if their plants operate at "normative availability", which was 85% as per tariff regulations in force in January 2012. Under the standard PPA, if availability falls below a pre-agreed threshold, the IPP is required to pay a penalty to the power purchaser. The power purchaser can terminate the PPA if average availability falls below 65% of normative availability for a specified period. Thus, IPPs are penalised for failing to achieve normative availability due to fuel supply problems outside their control. On the other hand, existent coal reserves cannot be transported to IPPs due to transportation network problems.
In an attempt to insure themselves against coal supply risks, IPPs may seek to buy
imported coal in which case they will face a substantial increase in fuel supply and
power generation costs. IPPs may seek to pass this increase on to power distributors
(which they sell power to), and ultimately to consumers. However, the Competitive
Bidding Route forbids the passing on of increased fuel supply costs. As a result, IPPs
risk incurring significant losses if they use imported coal to generate power and sell it
at the tariff agreed under their PPAs.
Policy Changes Needed
Coal suppliers should be required to commit to supply 100% of IPPs’ requirements or provide compensation;
IPPs should not be penalised for failing to perform their obligations under the PPA to the extent of the effect of the reasons outside their control;
Allowing passing on of fuel price increases to the extent beyond the control of IPPs should be allowed;
⌑⌑
Power distribution companies are also required to bid for power procurement under the Competitive Bidding Policy. However, the negotiating process is seriously challenged as procurers are unwilling to take fuel price risks and would like them to be built into the tariff. As a result, distribution companies prefer to procure power under the MoU route with a fuel price increase pass-on, or under competitive bids on fixed charges and efficiency.
Trilegal, Tata Power
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Source:
The Fuel Supply Agreement (FSA)
Coal Demand
Above
Production
Capacity
With the nationalisation of coal mines in 1973, the government of India became responsible for managing the country's coal mines through Coal of
India (CIL) and its subsidiaries. The shortage of coal supply in recent years has limited the ability of power companies to generate at full capacity
and meet their purchase agreements with off-takers. In an effort to address coal supply uncertainties, the Ministry of Coal decreed that by March 31,
2012, CIL and its subsidiaries sign Fuel Supply Agreements (FSA) with power projects that had entered into long-term PPAs with distribution
licensees, and started operations after March 31, 2009 or are scheduled to become operational by March 31, 2015. CIL’s independent directors
strongly opposed the move saying that the aggregate demand under the FSAs will exceed the company’s and its subsidiaries’ current and near
future production capacities. In April 2012, the President of India issued a decree requiring CIL to commit to supplying 80% of the coal requirements
of projects that started operations between March 31, 2009 and 2011. In case of a failure to do so, the company had to pay a penalty of 0.01% of the
value of the deficit measured against the supply commitment, or import coal to bridge the shortfall.
Controversy
over Coal
Supplies
The presidential decree sparked off a multi-level debate. Experts questioned its legality since there is no judicial precedent of a decree regulating the
management of a company. Others voiced concerns as to whether coal supplies to power producers were a public or a commercial interest. CIL
independent directors said the decree undermined their fiduciary duties to act in the best interest of the company. Power producers demanded
higher penalty, claiming that the proposed threshold of 0.01% of commitment deficit may make CIL consider penalty payment a more viable option to
importing coal. In the same time producers argued that if CIL chose to import coal to bridge its supply deficit, it may transfer higher coal costs to
them, thus making the production and delivery of power under an agreed tariff impossible. Other contentious issues included coal quality and the
need to sign multiple FSAs for multiple units of the same plant.
India’s largest thermal power producer, NTPC, declined to sign the FSA, saying the pact was lacking in commitment. As a result of the growing
pressure, the CIL Board of Directors requested the Prime Minister’s Office (PMO) to review the FSA provisions in May 2012.
Attempts at
Solution
The PMO recommendations, which NTPC deemed acceptable, included fuel supply commitment of 65% instead of 80%, and a penalty of between
20% and 40% of the value of the deficit in the first four years of the agreement. Interested parties voiced enthusiasm over the Prime Minister’s
recommendations, but India’s legal order makes them less binding to CIL than those of the President.
On December 10, 2012, CIL and NTPC officials met to smooth out their differences over the FSA provisions and set a date for signing the pact.
NTPC agreed to sign the FSA in June 2013 on mutually agreed terms and conditions. In August 2013, CIL modified the FSA to allow a third party to
collect samples and determine the quality of the dry fuel. As of September 6, 2013, the coal producer had signed FSAs with 140 power plants, out of
the 173 that depend on it for coal supplies. In the meantime, in the summer of 2013, CIL came under the scrutiny of India’s Competition Commission
over allegations that it abused a dominant market position in supplying fuel to power plants.
Trilegal, Local media
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Source:
Gas and Liquid-Fuel-Based Generation
Deficit in Domestic Natural Gas
India was home to 20.1 GW of gas-based installed
generation capacity as of Mar 31, 2013.
The price of the gas power generators receive from state-
owned GAIL are decided by the government under the
Administered Price Mechanism (APM) regime. Gas can also
be domestically sourced from companies exploiting the
Panna Mukta Tapti (PMT) fields, both at APM and non APM
prices. Generators sign Gas Sales and Transmission
Contracts (GSTCs) and long term agreements for gas
supplies.
In FY 2012, the Ministry of Petroleum and Natural Gas
(MPNG) said India’s gas output was expected to fall by 35%
by the end of the year and by additional 12% in years 2013
and 2014. For this reason, the Central Electricity Authority
(CEA) issued a statement advising investors not to plan new
capacities based on domestic gas supplies until the end of
FY 2016 in March. The embargo did not affect FY 2012
capacity additions which were a little above 1,000 MW.
The ban will also not be applicable to power projects planned
on imported LNG, which, according to comments by Tata
Power, is a direct substitute for domestic natural gas but at
almost double the price.
As a result, electricity produced from imported LNG will
increase the cost of generation, the recovery of which will be
uncertain due to highly regulated transmission. The
production of such electricity may not be financially viable.
LNG Imports, million tonnes
Tata Power; Deloitte Touche Tohmatsu; Petroleum Planning and Analysis Cell; NTPC;
7.958
8.922 9.73
11.632
10.901
-3.54%
12.11%
9.06%
19.55%
-6.28%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
2
4
6
8
10
12
14
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Total LNG Imports (Long-Term, Spot), million tonnes % y/y change
85 86 84.6 89.7
129.5 142.6
132.5
103.9 111.9 115.8 120
163.9 179.8 178.8
FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Est.
Supply of Domestic Natural Gas (MMSCMD)
Total Consumption of Gas (MMSCMD)
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Source:
Gas and Liquid-Fuel-Based Generation (cont'd)
Production and Availability of Natural Gas
With a share of 9%, natural gas was India’s fourth power
generation source in FY 2013, after coal with 58.3%, hydro
power with 17.7% and RES with 12.32%, respectively.
The average global share of natural gas in primary energy
consumption is some 24%. It is expected that the share of
natural gas in India's energy basket will double to 20% by
2025.
The demand for natural gas is largely met through
domestic production with imports contributing less than
30% of the total gas consumption.
With an import of 20.5 million tonnes in 2012, India has
become the fourth largest importer of LNG in the world,
ONGC said.
The main producers of natural gas are Oil & Natural Gas
Corporation Ltd. (ONGC), Oil India Limited (OIL) and
Reliance Industries. LNG is imported by state-owned
company Petronet LNG Ltd. As of March 2013, GAIL held
some 60% in India's gas marketing.
The demand for natural gas is expected to reach
more than 450 thou mmscmd by end of the XII five-year
plan ending in FY 2017, and over 600 thou mmscmd by the
end of the XII five-year plan ending in FY 2022.
In such a scenario, India will have to boost domestic
natural gas production as well as create sufficient
infrastructure for LNG imports to meet demand.
PPAC, CEA, GAIL, OIL, ONGC, Ministry of Petroleum and Natural Gas
31,4
78.5
7
31,7
51.0
2
46,4
85.8
8
51,2
29.2
9
46,3
26.9
1
38,9
42.6
1
26,9
47
27,0
63
40,8
31.1
0 46,0
42
41,0
25
34,3
03
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Natural Gas Net Production, mmscm
Natural Gas Available for Sale, mmscm
Natural Gas Available for Sale is
derived by deducing internal use
of gas by producing companies.
CAGR Natural Gas Available for
Sale FY 2008-2013: 4.95%
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Source:
Hydropower Generation
All India Hydropower Generation, GWh
Hydropower generation accounted for 17.7%, or 39.5 GW, of
India’s total installed capacity as of Mar 31, 2013.
In the early 2000s, the Indian government adopted a strategy
to boost hydropower development in the country in an effort
to achieve a hydro-to-thermal ratio of 40:60.
Some 68% of India’s identified hydropower capacities were
still to be developed as of Nov 30, 2012.
The following hydropower projects exist in India: storage
schemes, Run-of-River (RoR) Schemes without Poundage,
RoR Schemes with Poundage and Pumped Storage
Schemes.
Problems affecting the development of the hydropower
sector include land acquisition, resettlement and
rehabilitation issues, delays in environment and forest
clearances, landslides affecting capacity construction
schedules, tunnelling in inaccessible sites and inter-states
water disputes.
The Indian government has established special mechanisms
and committees to encourage hydropower cooperation with
neighbouring Nepal, Bhutan and Myanmar, as well as with
Afghanistan.
Hydropower projects are capital-intensive, have a long
gestation period and require large investments, which all
hinders the full exploitation of India’s hydropower potential.
Since water is a state subject in India, state governments are
demanding incentives, such as free power, which results in
higher tariffs.
Hydropower Stations in India as on Aug 31, 2013
CEA, hydropowerstation.com, NHPC
118,924.80 109,026.30
119,905.80
135,714.00
118,514.79
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
All India Hydropower Generation, GWh
No. of Stations No. of Units Capacity (MW)
Northern Region 61 206 15,523.25
Western Region 28 101 7,392.00
Southern Region 67 240 11,387.45
Eastern Region 17 61 4,078.70
North Eastern 10 29 1,242.00
All India (Total) 183 637 39,623.40
Note: Figures show installed capacity of stations with capacity above 25 MW
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Source:
Hydropower Generation (cont'd)
Hydropower Potential Development by Region Hydropower Potential Development by Basin
CEA
Percentages are shown in terms of Identified Capacity Above 25 MW (which is assumed to equal 100%).
Figures are as of Nov 30, 2012.
Capacity Identified Operating Capacity Capacity Under
Construction
Capacity Under
Operation and
Under Construction
Capacity Yet To
Be Developed
Total
(MW)
Above
25 MW MW % MW % MW % MW %
Northern
Region 53,395 52,263 15,643.30 29.93 6,903 13.21 22,546.30 43.14 29,716.80 56.86
Western
Region 8,928 8,131 5,552 68.28 400 4.92 5,952 73.20 2,179.00 26.80
Southern
Region 16,458 15,890 9,426.90 59.33 510 3.21 9,936.90 62.54 5,953.20 37.46
Eastern
Region 10,949 10,680 3,138.70 29.39 2,482 23.24 5,620.70 52.63 5,059.30 47.37
North-
Eastern
Region
58,971 58,356 1,242 2.13 2,810 4.82 4,052 6.94 54,304 93.06
All India,
Total 148,701 145,320 35,002.9 24.09 13,105.00 9.02 48,107.80 33.10 97,212.20 66.90
Percentages are shown in terms of Identified Capacity Above 25 MW (which is assumed to equal 100%).
Figures are as of Nov 30, 2012.
Capacity Identified Operating Capacity Capacity Under
Construction
Capacity Under
Operation and
Under Construction
Capacity Yet To
Be Developed
Total
(MW)
Above
25 MW MW % MW % MW % MW %
Indus 33,832 33,028 11,244.3 34.04 5,596.0 16.94 16,840.3 50.99 16,187.7 49.01
Ganga 20,711 20,252 4,987.2 24.63 1,307.0 6.45 6,294.2 31.08 13,957.6 68.92
Central
Indian
Rivers
4,152 3,868 3,147.5 81.37 400.0 10.34 3,547.5 91.71 320.5 8.29
West
Flowing
Rivers
9,430 8,997 5,660.7 62.92 100.0 1.11 5,760.7 64.03 3,236.3 35.97
East
Flowing
Rivers
14,511 13,775 7,843.2 56.94 410.0 2.98 8,253.2 59.91 5,521.9 40.09
Brahmaput
ra Basin 66,065 65,400 2,120.0 3.24 5,292.0 8.09 7,412.0 11.33 57,988.0 88.67
All India,
Total 148,701 145,320 35,002.8 24.09 13,105.0 9.02 48,107.8 33.10 97,212.2 66.90
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Source:
Nuclear Power
Indian Nuclear Power Capacity Expansion, MW
India has a 42-year history of nuclear power generation
with 20 nuclear power reactors operating in six states.
The country’s three-stage nuclear power program
includes a closed-fuel cycle of Pressurised Heavy Water
Reactors (PHWR) in the first stage, Fast Breeder
Reactors (FBR) in the second stage and uranium and
thorium usage in the third stage. Efforts are made towards
progressively increasing the share of nuclear power in the
country’s electricity portfolio.
India's integrated energy policy aims to reach 63,000 MW
of nuclear power generation by 2032.
The Nuclear Power Corporation of India Ltd. (NPCIL) is a
state-owned nuclear power company, in charge of
generation, construction and operation of the first stage
PHWRs and Light-Water Reactors (LWR).
As of March 31, 2013, NPCIL operated 20 nuclear power
reactors with a total installed capacity of 4,780 MW. A
total six reactors, with an aggregate capacity of 4,800 MW
were under various stages of construction and
commissioning. A total eight projects with a cumulative
capacity of 16,100 MW have been proposed for launch in
the 12th Five-Year Plan.
Nuclear Power Generation
World Nuclear Association, NPCI, Department of Atomic Energy (DAE), EMIS Insight calculations
14,921
18,798 26,469
32,451 32,863
25.98%
40.81%
22.60%
1.27% 0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Electricity Generation by NPCIL, GWh % y/y change
320 470
1,010
1,890
4,120
4,780
46.9%
114.9%
87.1%
118%
16%
0%
20%
40%
60%
80%
100%
120%
140%
0
1,000
2,000
3,000
4,000
5,000
6,000
FY 1969 FY 1979 FY 1989 FY 1999 FY 2009 FY 2011
Indian Nuclear Power Capacity Expansion, MW
% change CAGR FY 1969 – FY 2011: 71.3%
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Source:
Nuclear Power (cont'd)
Nuclear Plants in Operation, as of Mar 31, 2012 Projects Proposed for Launch in the XII Plan (2012-17)
NPCIL
Plant Name Unit Type Capacity,
MW
Launch
Year
Tarapur Atomic Power Station (TAPS),
Maharashtra
1 BWR 160 1969
2 BWR 160 1969
3 PHWR 540 2006
4 PHWR 540 2005
Rajasthan Atomic Power Station (RAPS),
Rawatbhata, Rajasthan
1 PHWR 100 1973
2 PHWR 200 1981
3 PHWR 220 2000
4 PHWR 220 2000
5 PHWR 220 2010
6 PHWR 220 2010
Madras Atomic Power Station (MAPS),
Kalpakkam, Tamil Nadu
1 PHWR 220 1984
2 PHWR 220 1986
Kaiga Generating Station (KGS), Karnataka
1 PHWR 220 2000
2 PHWR 220 2000
3 PHWR 220 2007
4 PHWR 220 2011
Narora Atomic Power Station (NAPS), Uttar
Pradesh
1 PHWR 220 1991
2 PHWR 220 1992
Kakrapar Atomic Power Station (KAPS), Gujarat 1 PHWR 220 1993
2 PHWR 220 1995
Plants under Different
Stages of Construction and
Commissioning
Capacity (MW) Type Expected Commercial
Operation
Kudankulam Nuclear Power
Project, Tamil Nadu 2 x 1,000 LWR Unit 1 - FY 2014
Unit 2 - FY 2014
Kakrapar Atomic Power
Project, Gujarat 2 x 700 PHWR Unit 3 - FY 2017
Unit 4 - FY 2017
Rajasthan Atomic Power
Project, Rajasthan 2 x 700 PHWR Unit 7 - FY 2017
Unit 8 - FY 2017
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Source:
Renewable Energy
India’s Renewable Energy Basket, FY 2013
The installed capacity of India's renewable energy sector
increased significantly from 3.9 GW in FY 2003 to about
27.5 GW in FY 2013. Capacity was at 24 GW in Jan 2012.
Wind energy dominates India's renewable energy
industry, accounting nearly 70% of installed capacity (18.6
GW). It is followed by small hydropower (3.5 GW),
biomass power (1.26 GW) and solar power (1.45 GW).
A total capacity of 18,635 MW was installed up to January
2013 in the country, making India the fifth-largest wind
power producer in the world, after the U.S., Germany,
Spain and China. India is a major producer of wind
turbines.
The slowdown in the growth of the wind power sector in
FY 2013 that can be attributed to the withdrawal of
accelerated depreciation for investments made in the
sector, MNRE said.
A total 1,067 MW of wind power projects started
operations in FY 2013 .
A total 12,760 villages and hamlets have been covered
under the Remote Village Electrification Program as of
December 31, 2011. In FY 2013, a total 66,000 biogas
plants were installed across India, taking the total number
of biogas plants to 4.54mn.
Off-Grid/Captive Power Capacities as of Jan 31, 2013
Ministry of New and Renewable Energy (MNRE)
Wind Power 68.27%
Small Hydro Power 13.01%
Biomass Power and Gasification
4.63%
Bagasse Cogeneration
8.43%
Waste to Power 0.35%
Solar Power 5.30%
Off-Grid/Captive Power (Capacities in MW eq) Capacities in MW eq, as of Jan 31,
2013
Waste-to-Energy 116
Biomass (non-bagasse) Cogeneration 443
Biomass Gasifiers
Rural 17
Industrial 140
Aero-Generators/Hybrid Systems 2.08
SPV Systems 107.8
Water mills/Micro Hydel 2,323 (number)
Bio-Gas Based Energy System 0.65
TOTAL 826.1
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Source:
Share of RES in Power Generation, Capacity
RES as % of Total Generating Capacity in India
RES as % of Total Energy Generation in India
CEA
245,438 287,029
395,889
517,439
670,654 722,626
741,167
799,850 844,846 928,113
6 39 876
2,085
9,860 25,210 27,860 36,947 41,150 51,226
0% 0.01% 0.22% 0.40%
1.47%
3.49% 3.76%
4.62% 4.87%
5.52%
0%
1%
2%
3%
4%
5%
6%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1990 1992 1997 2002 2007 2008 2009 2010 2011 2012
Total Gross Energy Generation in India, GWh Total Gross RES Energy Generation, GWh RES as % of Total
63,636 69,065 85,795
105,046 132,329
143,061 147,965 159,398 173,626
199,877
318,414
18 32 902
1,658
7,761 11,125 13,242 15,521
18,455 24,503
54,503
0.03% 0.05% 1.05% 1.58%
5.86%
7.78% 8.95%
9.74% 10.63%
12.26%
17.12%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
31-Mar-90 31-Mar-92 31-Mar-97 31-Mar-02 31-Mar-07 31-Mar-08 31-Mar-09 31-Mar-10 31-Mar-11 31-Mar-12 31-Mar-17 (F)
Total Installed Generating Capacity in India, GW Total Installed RES Generating Capacity, GW RES % of Total Capacity
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.
…
Source:
Power Generation SWOT Analysis
India offers different models of power sale including integrated utilities,
single buyers (MoU-based regulated generation), wholesale
competition (Ultra Mega Power Projects), captive power generation and
sale to captive users, as well as retail competition (open access).
Economic growth and policy reforms are triggered by social factors
such as urbanisation. Increased environmental responsibility drives
efforts to replace current polluting technologies with more sustainable
sources.
Delays in land acquisition, environmental clearances and indigenous
population policies block the development of power projects.
Distribution companies sell power at prices below procurement costs,
which hurts their liquidity and solvency and results in high subsidies.
The low tariff hikes approved by authorities limit the cost recovery
possibilities of companies. The ban on the pass-on of increased costs
to consumers adds to the problem. T&D losses need to be limited
through metering, feeder separation and other measures.
Domestic coal supply is estimated to last less than a century and is a
concern because of policy and logistic issues. Imported coal will result
in higher fuel and generation costs. Shortage of domestic gas and
expensive LNG imports could hamper the financial viability of gas-
based power plants. The availability and cost of capital for funding new
projects is also a problem, as power projects are highly capital-
intensive. The fresh water requirements of power plants can be met by
developing coastal capacities and building desalination plants.
The need for regular and sustainable sourcing of fuel will result in
company efforts to decentralise generation and distribute capacities
among various resources and technologies. Diversified generation will
be challenged by technology maturity and grid infrastructure issues.
New business models will result from regulatory intentions to privatise
distribution and transmission companies and allow distribution
franchisees as a way to bring private investment into the sector. Clarity
in commercial policies and regulations will be crucial.
Power Sector
SWOT Analysis
Strengths Opportunities
Weaknesses Threats
Tata Power, NTPC
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V. Power Transmission and Distribution
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Power Transmission and Distribution Highlights
Electricity Grids
India has five electricity grids - Northern, Eastern, North-Eastern, Southern and Western. All of them are interconnected in
synchronous mode into a National Grid, except the Southern grid, which is connected asynchronously. All are run by the state-
owned PowerGrid Corporation of India Ltd. (PGCI), which operated more than 100,200 circuit km of transmission lines at end-
March 2013. One-third of the population is not connected to any grid. Installed transmission capacity is about 14% of
generation capacity. Part of India’s national power strategy is to have a country-wide synchronous grid by 2014.
Power
Allocation
Electricity end-consumers are largely served by their respective State Electricity Boards (SEBs). Each SEB has an allocated
share of the electricity generated by the central sector and public-private companies, which is provided, and expected to be
drawn, at a certain price. Pricing is controlled by the central and state governments. The amount of electricity drawn below or
above the allocated daily share is called Unscheduled Interchange (UI) and is priced at a separate UI rate. PowerGrid
transmitted some 50% of the total power generated in India as of end-March 2013.
Electricity
Tariffs
End-user electricity tariffs consist of fixed- and variable-charge components, determined by the Central Electricity Authority
(CERC). The fixed-charge component covers fixed costs such as property, plant and equipment maintenance and salary
expenses; the variable-charge component covers the costs of generating electrical energy, including fuel costs linked to
generation. The actual amounts of charge components depend on each beneficiary’s claim on the generation capacity used.
Power Trading
Power generation and transmission are highly capital-intensive so the fixed-charge components make up a major part of the
tariff. Thus, the average tariff becomes sensitive to the generation capacities’ Plant Load Factor (PLF). Investing in higher grid
interconnection that would enable trading of power from state utilities reporting surplus to those reporting deficit, could help
defer or reduce investment in additional generation capacity, would increase PLF and reduce the average cost of power for
utilities and consumers.
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Power Transmission and Distribution Highlights (cont'd)
Power Trading
Problems
India is currently home to two power exchange platforms – PXIL and IEX. According to B2B portal electricityindia.com, the
issues hampering the quicker development of inter-regional electricity exchange include relative lack of commercial awareness
by SEBs, lack of statutory provisions for direct sale by Independent Power Producers (IPPs) and Captive Power Plants (CPPs)
outside the state, and inadequate transmission capacity, among others.
Debt Recast
In September 2012, the Indian government approved a plan to relieve the debt burden of state-run power distribution
companies by taking over half of their short-term debt over the next two to five years. According to international media, the
distribution companies will issue bonds to lenders backed by the state governments against this debt. For the remaining short-
term debt, lenders will relax the terms, including extending the time of repayment. The central government will also provide
fiscal incentives to states which adopt the plan.
Temporary
Relief
The implementation of the plan is at the discretion of states, which could be a hurdle to its success. As of Sep 2013, six states
have approved the scheme, and two of them – Tamil Nadu and Haryana, have already issued bonds. According to Standard
and Poor’s, the plan would provide only temporary relief as it fails to address tariff regulations and unreliable fuel supply.
Reliable fuel supply, according to the rating agency, depends on the existence of a transparent framework for producing fuel
and adequate infrastructure for transporting it.
Electricity
Tariffs
More than 30 states and Union Territories have raised electricity tariffs since January 2012. The move was an attempt to
improve the financial position of distribution companies, whose accumulated losses (at INR 2.4tn in FY 2013) prevent them
from meeting payment deadlines from lenders and generating companies. The average price increase was 16%. Tamil Nadu
was the state that reported the highest increase – 37%, followed by Kerala – 30%, Mumbai – 28%, Kolkata – 24% and Delhi –
21%.
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Power Transmission and Distribution Highlights (cont'd)
Grid Inter-
Connection
Milestones
Grid management on regional basis started in the 1960s in India. Integrating regional grids to establish a national grid was conceptualised in the early 1990s. State grids were initially interconnected to form regional grids. The initial inter-regional links were planned for exchange of operational surpluses amongst the regions. Later the planning philosophy evolved from regional to national self-sufficiency. The North-Eastern and Eastern grids were connected in 1991. The Western and Northern grids joined the network in 2003 and 2006, respectively. The Southern grid is connected to the synchronous grid network through HVDC links. Part of India’s national power strategy is to have a country-wide synchronous grid by 2014. As of March 31, 2013, India had inter-regional transmission capacity of 29.8 GW, against 28 GW (some 14% of generation capacity) in the previous year. Inter-regional transmission capacity is expected to grow to 58.7 GW by 2015 and some 65 GW by the end of the XII Plan in March 2017.
Private
Participation
In an effort to meet the growing power demand of the country, the government of India has developed a legal framework for
private sector participation in power generation. Private power generating companies, called Independent Power Producers
(IPPs), are required to transmit the power they generate to state and regional load centres. Regional Load Dispatch Centres
(RLDC) are the bodies in charge of the daily management of local grids. Their operations are overseen by the National Load
Dispatch Centre (NLDC), set up in 2009. Government-controlled company PowerGrid is in charge of granting Long-Term
Access (LTA) to private power producers. To facilitate the long-distance transfer of power generated from IPP projects,
PowerGrid will build 11 High-Capacity Power Transmission Corridors, nine of which are scheduled to be completed in the XII
plan ending Mar 2017.
Power
Transmission
Corridors
The 11 High-Capacity Power Transmission Corridors will be worth an estimated INR 750bn, newswire The Hindu reported,
quoting a top PowerGrid official as saying. The company planned to raise the funds it needed through bond issues. The first
phase of a 6,000 MW sub-station in the eastern state of Odisha, part of High-Capacity Power Transmission Corridor-1
(HCPTC-1) is expected to be completed in by March 2014, a May 2013 report by the Power Ministry said. HCPTC-1 will help
bring about 10,000 MW power from Independent Power Projects (IPP) to the state and will improve its transmission capacity.
The sub-station will require some 300 acres of land in and around four villages.
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Source:
Performance of State Power Utilities
Revenue Growth in State Power Sector
Aggregate Losses of All State Power Utilities
Capital Employed by State Power Utilities
Power Finance Corporation Ltd.
1,729.48
2,073.47 2,421.89
9.83%
19.89%
16.80%
0%
5%
10%
15%
20%
25%
0
500
1,000
1,500
2,000
2,500
3,000
FY 2010 FY 2011 FY 2012
Sales, INR bn % y/y Growth
-245.96 -304.30
-516.02
-625.81 -534.92
-644.63
-742.91
-928.45
-377.73
-453.82 -539.86
-670.06
FY 2009 FY 2010 FY 2011 FY 2012
Aggregate Book Losses, All Utilities, INR bn
Aggregate Losses w/o Accounting for Subsidy, All Utilities, INR bn
Aggregate Losses on a Subsudy Received Basis, All Utilities, INR bn
150 53 -318
448 437 551
2,632
3,285
3,811
31
39
57
206
244
302
262
240
304
FY 2010 FY 2011 FY 2012
Consumer Contribution,INR bn
Grants towards CapitalAssets, INR bn
Other Loans, INR bn
Loans from FinancialInstitutions, Banks, Bonds,INR bn
State Govt. Loans, INR bn
Networth, INR bn
INR 3,729.36bn
INR 4,707.92bn
INR 4,297.84bn
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Source:
Performance of Utilities Selling Directly to Consumers
Subsidies Booked and Released
Cost Recovery of Utilities Selling Directly to Consumers
Total Income and Energy Sold
AT&C Losses by Region
PFC
38.72% 37.03%
29.22%
19.21%
24.47% 26.04%
42.61%
34.85% 31.49%
18.62%
24.86% 27%
Eastern North-Eastern Northern Southern Western Total
FY 2011 FY 2012
340.14 226.66 302.42
190.74 202.95 258.32
56.08%
89.54% 85.42%
0%
20%
40%
60%
80%
100%
0
50
100
150
200
250
300
350
400
FY 2010 FY 2011 FY 2012
Subsidy Booked, INR bn Subsidy Released, INR bn
% Subsidy Released
2,287.31 2,684.47
578,698
622,504
540,000
560,000
580,000
600,000
620,000
640,000
2,000
2,200
2,400
2,600
2,800
FY 2011 FY 2012
Total Income Excl. Subsidy for Utilities Selling Directly to Consumers, INR bn
Total Energy Sold, GWh
1,906.98 2,287.31 2,684.47
2,529.32 2,998.15 3,555.01
75.39%
76.29%
75.51%
75%
75%
76%
76%
77%
0
1,000
2,000
3,000
4,000
FY 2010 FY 2011 FY 2012
Aggregate Turnover of Utilities (SEBs, Power Departments and DISCOMs) Excl. SubsidyBooked, INR bnAggregate Expenditure, INR bn
Cost Recovery, INR bn
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Source:
Performance of Utilities Selling Directly to Consumers (cont'd)
Power Sales by Region
Gap between Electricity Cost of Supply and Consumer Price
Receivables and Payables of Utilities Selling to Consumers
PFC
FY 2010 FY 2011 FY 2012
Region
Revenue
from Sale
of Power,
INRbn
Energy
Sold, GWh
Revenue
from Sale
of Power,
INRbn
Energy
Sold, GWh
Revenue
from Sale
of Power,
INRbn
Energy
Sold, GWh
Eastern 149.57 44,124 187.56 47,957 231.03 48,656
North-Eastern 24.8 6,116 27.52 7,010 32.55 7,664
Northern 509.45 166,530 591.91 184,605 686.72 198,005
Southern 489.44 168,116 604.6 176,042 684.3 187,026
Western 556.21 143,420 661.87 163,084 787.29 181,153
All India 1,729.48 528,086 2,073.47 578,698 2,421.89 622,504
0.87
0.94
1.07
0.4
0.64
0.7
FY 2010
FY 2011
FY 2012
Gap with Subsidy, INR/KWh Gap w/o Subsidy, INR/KWh
109 105 102
100
116
151
646.41
807.02
1,077.50
504.08
686.07
1,075.53
0
200
400
600
800
1,000
1,200
0
20
40
60
80
100
120
140
160
As of Mar 31, 2010 As of Mar 31, 2011 As of Mar 31, 2012
No of Days of Customer Receivables Outstanding, (l)
No of Days of Payables for Purchase of Power, (l)
Total Receivables for Sale of Power of Utilities Selling Directly toConsumers, INR bn, (r)
Total Payables for Purchase of Power of Utilities Selling Directlyto Consumers, INR bn, (r)
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Source:
Power Exchange and Trading
Price of Electricity Transacted
The Electricity Act of 2003 recognised power trading as a new
segment apart from generation, transmission and distribution.
Inter-state trading in electricity started in 2004. The two power
exchanges, IEX and PXIL, started operations in Jun 2008 and
Oct 2008, respectively. The number of CERC-licensed traders
rose to 56 in FY 2012 from 13 in FY 2005. A total 13.79 TWh
were traded through IEX and 1.03 TWh through PXIL in FY
2012.
Although unscheduled interchange (UI) is not a market
mechanism, electricity transacted under UI is considered part of
short-term transactions, as is electricity transacted directly
between distribution companies, without involving trading
licensees or power exchanges.
In FY 2013, the volume of UI transactions was 24.76 TWh and
that of transactions directly between distribution companies -
14.52 TWh (see tables on next slide).
Developments expected to lead to further growth in power
trading in the future include open access to consumers,
increased share of merchant power from independent power
plants, establishment of distribution franchisees and supply of
power to investment-promoting projects such as the Special
Economic Zones (SEZs).
Rising competition among power exchange players reduces
trade margins. Independent power producers are selling below
their estimates, as, when faced with a deficit, power distribution
companies prefer load shedding to buying market-priced
electricity and thus increasing their expenses. In spite of the
Electricity Act provisions, open access is only slowly granted to
consumers, which is a further barrier to growth and competition
in the sector.
Short-Term Transactions by Participants, FY 2013
Central Electricity Regulatory Commission (CERC), Tata Power, NTPC
7.29
5.26 4.79
4.18 4.33
7.49
4.96
3.47 3.57 3.67
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Price of Electricity Transacted Through Traders, INR/kWh
Price of Electricity Transacted Through Power Exchanges, INR/kWh
UI Transactions 25.0%
Bilateral Through Traders 36.5%
Power Exchange Transactions
23.8%
Bilateral Between Distribution
Companies 14.7%
Long-term
transactions
accounted for
89% of all
power trading
transactions in
FY 2013. Short-
Term
transactions
were 11% of the
total.
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Source:
Power Exchange and Trading (cont'd)
Volume and Price of Electricity Transacted Through UI
Volume of Electricity Transacted Directly Between Discoms
Electricity Transacted by Trading Licensees, Sept 2013
CERC, CEA
Volume of UI
Transactions,
TWh
Volume of Short-
Term
Transactions,
TWh
Volume of UI as
% of Short-Term
Transactions
UI Price
(INR/kWh)
FY 2010 25.81 65.9 39% 4.62
FY 2011 28.08 81.56 34% 3.91
FY 2012 27.76 94.51 29% 4.09
FY 2013 24.76 98.94 25% 3.86
Volume of Electricity
Transacted Directly
Between Distribution
Companies, TWh
Volume of Short-
Term Transactions,
TWh
Volume of Direct
Bilateral Transations
as % of Short-Term
Transactions
FY 2010 6.19 65.9 9%
FY 2011 10.25 81.56 13%
FY 2012 15.37 94.51 16%
FY 2013 14.52 98.94 15%
Name of the Trading Licensee %
PTC India Ltd. 33.87%
Tata Power Trading Company Ltd. 14.79%
JSW Power Trading Company Ltd. 12.68%
Shree Cement Ltd. 6.21%
Reliance Energy Trading Ltd. 4.76%
Jaiprakash Associates Ltd. 4.67%
Mittal Processors Ltd. 4.31%
Adani Enterprises Ltd. 3.36%
Knowledge Infrastructure Systems Ltd. 3.13%
NTPC Vidyut Vyapar Nigam Ltd. 2.75%
Manikaran Power Ltd. 1.78%
GMR Energy Trading Ltd. 1.70%
National Energy Trading & Services Ltd. 1.46%
Instinct Infra & Power Ltd. 1.30%
RPG Power Trading Company Ltd. 1.27%
Essar Electric Power Development Corp. Ltd. 0.77%
Arunachal Pradesh Power Corporation Ltd. 0.73%
Pune Power Development Ltd. 0.33%
Customised Energy Solutions India Ltd. 0.12%
Ambitious Power Trading Company Ltd. 0.02%
Total 100.00%
Top 5 trading licensees 72.30%
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VI. Water Supply and Sanitation (WSS)
India’s fiscal year runs from Apr 1 to March 31. Thus, FY 2012 (also called fiscal 2012) means Apr 1, 2011 – Mar 31, 2012. In Indian documents, FY (fiscal) 2012 is also labeled FY11-12.
Indian fiscal year 2013 ends in March 2013 and the remaining nine months of calendar 2013 belong to fiscal year 2014.
In order to better align with calendar years and make international comparisons more meaningful, Emerging Markets Insight has chosen to label data by the year in which most of the result
occurred. Unless otherwise stated, in graphs throughout this report, 2011, for example, means the 12 months between Apr 1, 2011 - Mar 31, 2012, or what in India is referred to as fiscal 2012.
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Water Supply and Sanitation (WSS) Highlights
Top Priority
India's rapid economic growth and urbanisation are widening the demand/supply gap of water and managing the country’s
water resources rationally and sustainably is one of the government of India's priorities for the 12th Planning Period (2012-
2017).
Scarcity
According to the Asian Development Bank, per capita water availability is expected to fall to 1,140 cu m by 2050 from 1,588 cu
m in 2010 and 5,200 cu m in 1951. India's current water consumption is roughly in line with its availability, but by 2030, water
consumption is estimated to be 100% higher than the water available, the deputy chairman of the Indian Planning Commission,
Montek Singh Ahluwalia, was quoted as saying. The uneven distribution of water resources, both geographically and
seasonally, aggravates the problem.
Intermittent
Supply
According to the World Bank, more than 90% of India's urban population has access to drinking water, and more than 60% of
the population has access to basic sanitation. However, less than 50% of the urban population has access to piped water. No
Indian city receives piped water 24 hours a day, 7 days a week. Utility companies provide piped water for never more than a
few hours per day, regardless of the quantity available. The government urges power generators to reduce fresh water
consumption in plants under the Reduce, Reuse & Recycle principle.
Water Losses
The World Bank estimates Non Revenue Water (NRW), unaccounted for due to leakages, unauthorised connections and billing
and collection inefficiencies, at some 40% to 70% of the water distributed. Operations and maintenance (O&M) cost recovery
through user charges is at about 30% to 40%. Most urban water utilities survive on operating subsidies and capital grants.
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Source:
Water Utilities in India
Indian Water Utilities Performance Trend
Indian Water Utilities Industry Turnover Forecast
Indian Water Utilities Industry Volume
Indian Water Utilities Industry Volume Forecast
Marketline
819 858 930
990
1,140
4.69%
8.36%
6.49%
15.22%
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
200
400
600
800
1,000
1,200
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012
Indian Water Utilities Turnover, INR bn % y/y change
728
744
761
773
791
2.24% 2.24%
1.63%
2.22%
0%
1%
1%
2%
2%
3%
680
700
720
740
760
780
800
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012
Indian Water Utilities Industry Volume, bn cu m % y/y change
1,140 1,214 1,335
1,469 1,617 1,783
6.45%
9.98% 10.01% 10.09% 10.29%
0%
2%
4%
6%
8%
10%
12%
0
500
1,000
1,500
2,000
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
Indian Water Utilities Industry Turnover Forecast, INR bn % y/y change
791
806
822 838
853 869
1.97%
1.95%
1.90%
1.86% 1.84%
1.75%
1.80%
1.85%
1.90%
1.95%
2.00%
740
760
780
800
820
840
860
880
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
Indian Water Utilities Industry Volume Forecast, INR bn % y/y change
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Urban Water and Sewage Highlights
Sewage
Upgrade
As of January 2012, most Indian cities did not have sewage treatment plants for biological and chemical waste, the Planning
Commission said in a report. Technologies used are not adapted to treating chemical waste or operating within a limited
capacity of the receiving environment to assimilate treated waste. Sewage technology issues include price of capital, availability
of land and operation and maintenance costs. The increasing pollution of the receiving environment highlights the need for
more advanced and expensive sewage technologies.
Upgrade Costs
Tertiary treatment plants, capable of cleaning water for reuse in households and industries are being built in India, but are
expensive. According to the Planning Commission, cities can partially recover construction costs by restricting freshwater use
and promoting the sale and use of treated sewage water. Companies that build their own pipelines and connect them to the
city’s sewage treatment plants can recover their costs by buying treated water at a lower price than the industrial tariff.
Public-Private
Partnerships
Current models of public-private water partnerships include concessions for treatment plants and service contracts for billing,
tariff collection and metering. Most projects are publicly funded and focus on distribution improvement by employing the
managerial and technical expertise of private companies. Examples of cities with privately-run citywide distribution include
Jamshedpur, where a company of industrial conglomerate Tata Group has set up a water supply system, and Tirupur where a
public-private company is in charge of water distribution.
Attracting
Private Capital
The Planning Commission believes that the role of private companies in water distribution and sewage treatment must be encouraged. The current experience, however, is that the private sector is reluctant to engage in capital and operational investments. In order to promote private participation, city authorities will have to better consider the financial sustainability of projects, keep accurate base-line data on water and sewage, provide correct project designs and relax procedures for renegotiating of tendered agreements in case of an inaccuracy significantly altering the performance or financial scopes of projects.
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Source:
Water Supply
Per Capita Water Availability in India (cu m/per year)
Water availability in India is very unevenly distributed, with
75%-80% of precipitation falling during the monsoon
season from July to September. This, coupled with India’s
billion-strong population and increasing household and
industrial demand, is the major cause for water scarcity in
the country.
Because of India's rapid population growth, annual per
capita water availability is declining and is forecast at just
about the water stress line in 2015.
According to the Indian Planning Commission, the
drinking water requirements of most big cities in the
country are generally met with a combination of
groundwater (75%) and surface water supply (25%)
from nearby irrigation/multi-purpose reservoir schemes.
India's average annual water resource potential, meaning
the total runoff generated from rainfall, is estimated at
1,869 billion cubic meters (BCM), the Asian
Development Bank said.
Utilisable water resources are assessed at 1,123 BCM
and include water that can be utilised economically within
the limitations of the technology available, the
physiographic, hydrological and socio-political conditions,
as well as the existing environmental, legal and
constitutional constraints.
Water Resources by Source and Consumers
Ministry of Water Resources, Asian Development Bank
5,177
2,200 1,869
1,341 1,140
0500
1,0001,5002,0002,5003,0003,5004,0004,5005,0005,500
1951 1991 2001 2015 2050
Per Capita Water Availability in India (cu m/per year)
Water Scarcity
Water Stress
Surface Water (SW), BCM, 690
Ground Water (GW), BCM, 433
Total:
1,123
BCM
Utilizable Water Resources in
India (Publ. Oct 2011)
Industry
1.90%
Agriculture
59.70%
Water Utilities by Major
Consuming Sectors, FY 2012,
% Households
38.40%
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Source:
Water Supply and Sewage
Central Government Investment in Water and Sewage
Improving water and utility management and ensuring
equal supply to all is India’s main urban water objective
the XII plan (fiscal 2012-17), according to a Jan 2012
report by the Planning Commission’s body on water
resources and sanitation.
Water utilities are mostly run by cities and municipalities,
making India’s water supply network very fragmented.
Water utilities comprise the following legal forms:
municipal council, municipal corporation, private
company, city board and autonomous local body.
In most cities, water is supplied from distant sources.
Long pipelines result in higher leakage and losses, which
the Planning Commission estimated at some 50% of the
water that enters pipes. Electricity makes up 40%-60% of
water supply costs.
Pipes are distributed unevenly in cities, with some parts
getting nearly all the water and other parts getting none.
City water agencies have no records of the amount of
groundwater which is privately extracted in cities.
Cities keep no national accounts on the load of sewage
generated because of the different ways in which people
source water and dispose of sewage. According to the
Planning Commission, India treats 30% of the sewage it
generates, with the cities of Delhi and Mumbai claiming
40% of the country’s installed capacity.
Types of PPP Contracts in Water Supply and Sewage
Planning Commission, JNNURM, World Resources Institute
Period (FY) INR bn
Central Assistance for Water and Sewage 1980-2005 37
Central Assistance for River Conservation 1995-2010 50
Central Assistance under JNNURM (urban renewal mission) 2005-2011 430
Management Contract
Service Contract
Design-Build-Operate Contract (DBO)
Long-Term Lease
Build-Own-Operate Contract (BOO)
Build-Operate-Transfer (BOT) – Variations: Build-Transfer-Operate
(BTO), Build-Rehabilitate-Operate-Transfer (BROT), Build-Lease-
Transfer (BLT), Build-Own-Operate-Transfer (BOOT)
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VII. City Gas Distribution (CGD)
India’s fiscal year runs from Apr 1 to March 31. Thus, FY 2012 (also called fiscal 2012) means Apr 1, 2011 – Mar 31, 2012. In Indian documents, FY (fiscal) 2012 is also labeled FY11-12.
Indian fiscal year 2013 ends in March 2013 and the remaining nine months of calendar 2013 belong to fiscal year 2014.
In order to better align with calendar years and make international comparisons more meaningful, Emerging Markets Insight has chosen to label data by the year in which most of the result
occurred. Unless otherwise stated, in graphs throughout this report, 2011, for example, means the 12 months between Apr 1, 2011 - Mar 31, 2012, or what in India is referred to as fiscal 2012.
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City Gas Distribution (CGD) Highlights
Natural Gas
Overview
Indian natural gas production was 1.4% of global production in 2011, down from 1.6% in the previous year. Domestic natural
gas consumption accounted for 1.9% of global consumption in 2011. With a share of 9%, natural gas is India's fourth energy
source, after coal with 58.3%, hydro with 39.5% and RES 12.32%, respectively. Natural gas held a 10% share in India's
installed capacity in FY 2012. About a fifth of natural gas demand is currently met by imports. It is expected that the share of
natural gas in the country’s energy basket will grow to 20% by 2025.
City Gas
Distribution
Gas requires expensive infrastructure and complex pipeline networks to ensure constant flow. As of March 2012, India was
home to gas pipelines of a total length of 13,428 km, 70% of which were operated by public gas transporter and marketer GAIL.
City gas distribution was available in 43 geographical areas and consumed some 14 MMSCMD of gas, of which 6.63
MMSCMD is from re-gasified liquefied natural gas (RLNG), according to the government's Economic Survey for FY 2013.
PNG/CNG
City gas projects based on PNG/CNG started operations in the early 1990s in Delhi and Mumbai. Piped Natural Gas (PNG), in
this context also termed "cooking gas" is for household and commercial usage, and Compressed Natural Gas (CNG) is used as
transportation fuel. Before the government's Oil Sector Vision 2015 was adopted in 2009, PNG/CNG was available in 35 cities,
reached 860,000 households and was used by 500,000 vehicles. By 2015, a total 200 cities are envisaged to be covered. India
had some 1.6 million PNG connections in mid-2012.
LPG
In its Oil Vision 2015, the government pledged to secure 55 million new connections to raise population coverage from 50% to
75%. The total number of LPG customers is thus set to reach 160 million, with most of the newly joined households coming
from rural India. The government vowed to provide 100% LPG coverage to all towns with a population of more than 500,000.
Portability of LPG connections, similar to that for mobile phone numbers, is also on the agenda.
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Source:
PNG in India
Piped Natural Gas Status as of Mar 31, 2013
PPAC
State City Covered Company Domestic PNG Commercial PNG Industrial PNG
Delhi Delhi, Noida, Greater Noida, Ghaziabad IGL 386,226 962 418
Maharashtra Mumbai, Thane, Mira-Bhayandar, Navi Mumbai, Pune,
Kalyan, Ambernath, Panvel, Bhiwandi MGL, MNGL 647,790 1,990 98
Gujarat Ahmedabad, Baroda, Surat, Ankeleshwar GSPC, SABARMATI GAS, GUJRAT GAS,
HPCL, VMSS,ADANI GAS 1,144,424 12,693 3,686
Uttar Pradesh Agra, Kanpur, Bareilly, Lucknow Green Gas Ltd. (Lucknow),
CUGL(Kanpur) 7,090 55 430
Tripura Agartala TNGCL 11,431 256 41
Madhya Pradesh Dewas, Indore, Ujjain, Gwalior GAIL GAS, AGL 1,775 6 49
Rajasthan Kota GAIL GAS 177 0 16
Assam Tinsukia, Dibrugarh, Sibsagar, Jorhat ASSAM GAS CO. LTD 23,632 759 366
Andhra Pradesh Kakinada, Hyderabad, Vijaywada, Rajamundry BGL 1,802 15 1
Haryana Sonepat, Gurgaon, Faridabad GAIL GAS, ADANI GAS, HARYANA CITY
GAS 11,508 43 123
TOTAL 2,235,855 16,779 5,228
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Source:
CNG Sales, Stations and Vehicles
CNG Sales as of Mar 31, 2013 CNG Stations and Vehicles as of Mar 31, 2012
Petroleum Planning and Analysis Cell (PPAC)
State Company Name FY 2012,
thou tonnes
FY 2013
(Prov.),
thou
tonnes
Gujarat GAIL Gas/ Adani Energy/ Gujrat
Gas,GSPC, GGCL, SGL,HPCL 409.1 441.8
Delhi Indraprastha Gas (IGL) New Delhi 649.3 695.1
Rajasthan
(Kota) GAIL 0.2 0.8
Maharashtra Mahanagar Gas Ltd.(MGL) Mumbai,
MNGL Pune. 382.8 425.1
Andhra Pradesh Bhagyanagar Gas Ltd.( BGL)
Hyderabad. 15.8 24.7
U.P. Green Gas Ltd. (Lucknow),
CUGL(Kanpur) 112.6 137.7
Tripura Tripura Natural Gas Co. Ltd.(TNGCL)
Agartala. 3.2 4.3
M.P. Avantika Gas (Indore) / GAIL Gas Ltd. 10.7 14.5
Haryana Haryana City Gas Ltd. 54 73.2
West Bengal GEECL 0 0.6
Total 1,637.7 1,817.8
State Company Name No of CNG
Stations
No of CNG
Vehicles,
mln
Gujarat GAIL Gas/ Adani Energy/ Gujrat
Gas,GSPC, GGCL, SGL,HPCL 313 638,422
Delhi / NCR Indraprastha Gas (IGL) New Delhi 286 654,158
Maharashtra Mahanagar Gas Ltd.(MGL) Mumbai,
MNGL Pune. 203 334,810
Andhra Pradesh Bhagyanagar Gas Ltd.( BGL) Hyderabad. 29 19,958
Rajasthan Gail Gas. 2 1,085
U.P. Green Gas Ltd. (Lucknow),
CUGL(Kanpur) 30 56,857
Tripura Tripura Natural Gas Co. Ltd.(TNGCL)
Agartala. 3 4,682
M.P. Avantika Gas (Indore) / GAIL Gas Ltd. 16 10,878
Haryana Haryana City Gas Ltd. 14 85,560
West Bengal GEECL 7 1,201
All India 903 1,807,611
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VIII. Major Players
India’s fiscal year runs from Apr 1 to March 31. Thus, FY 2012 (also called fiscal 2012) means Apr 1, 2011 – Mar 31, 2012. In Indian documents, FY (fiscal) 2012 is also labeled FY11-12.
Indian fiscal year 2013 ends in March 2013 and the remaining nine months of calendar 2013 belong to fiscal year 2014.
In order to better align with calendar years and make international comparisons more meaningful, Emerging Markets Insight has chosen to label data by the year in which most of the result
occurred. Unless otherwise stated, in graphs throughout this report, 2011, for example, means the 12 months between Apr 1, 2011 - Mar 31, 2012, or what in India is referred to as fiscal 2012.
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Source:
Top M&A Deals
Top M&A Deals in the Indian Utilities Sector in 2013
DealWatch
Date Target Company Deal Type Buyer Seller Deal Value USD (mn) Stake %
Sep 11, 2013 Transmission and distribution (T&D)
business of Vijai Electricals Ltd Acquisition Toshiba Corporation Vijai Electricals Ltd 200 N/A
Mar 4, 2013 Gujarat Gas Company Ltd Tender Offer Gujarat State Petroleum Corp (GSPC) Minority Shareholders 62.46 8.58%
Jun 5, 2013 ReNew Wind Power Pvt Ltd Minority stake
purchase; PE Entry Goldman Sachs Capital Partners N/A 135 N/A
Jul 5, 2013 150MW Gujarat wind mill project Acquisition Bharat Light and Power Pvt Ltd DLF Ltd. 53.41 100.00%
Apr 8, 2013 Wind power facility of VRL Logistics Acquisition Amplus Infrastructure Developers Pvt Ltd VRL Logistics Ltd 42.15 100.00%
Jul 30, 2013 110 MW Chuzachen Hydro-Electric
Project in East Sikkim Minority Stake Purchase GE Energy Financial Services
Gati Infrastructure Private
Limited 43.29 21.63%
Apr 23, 2013 NSL Renewable Power Pvt Ltd Minority stake
purchase; PE Entry
Asia Clean Energy Ltd., DEG Investitions und
Entwicklungsgesellschaft mbH, FE Clean Energy
Group Inc., GS Power Co.Ltd., International Finance
Corp (IFC), Proparco - Societe de Promotion et de
Participation pour la Cooperation Economique SA
N/A 60 N/A
Oct 9, 2013 AES Saurashtra Windfarms Pvt Ltd Acquisition Tata Power Company Ltd AES Corp 24.4 100.00%
Apr 4, 2013 Tamil Nadu wind mill of DLF Acquisition Tulip Renewable Powertech Pvt Ltd DLF Ltd 34.62 N/A
Nov 15, 2013 Dans Energy Consulting Pvt Ltd Minority Stake Purchase Equis Funds, Singapore N/A 18.96 N/A
Jan 23, 2013 Bharat Light and Power Pvt Ltd
Minority stake
purchase; PE Entry, VC
Entry
Draper Fisher Jurvetson Venture Capital, UTI Capital
Pvt Ltd, VenturEast, N/A 18.64 33.96%
Jun 13, 2013 Atria Brindavan Power Minority stake
purchase; PE Entry BanyanTree Finance Pvt Ltd N/A 8.62 N/A
Apr 4, 2013 Rajasthan wind mill of DLF Acquisition Violet Green Power Pvt Ltd DLF Ltd 10.9 N/A
Sep 15, 2013 Kudgi Transmission Ltd Acquisition L&T Infrastructure Development Projects Ltd (L&T-
IDPL) Rural Electrification Corp Ltd 2.39 100.00%
Oct 30, 2013 5.7 MW hydro plant in Uttarakhand Acquisition Pan Global Corp Regency Yamuna Energy Ltd 6.6 100.00%
Aug 30, 2013 Vizag Transmission Ltd Acquisition Power Grid Corpn. of India Ltd REC Transmission Projects
Co Ltd N/A 100.00%
Aug 26, 2013 Two wind farms in Madhya Pradesh Acquisition Continuum Wind Energy Sravanthi Group N/A 100.00%
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Source:
Possible M&A Activity in Utilities
Companies Looking to Buy Companies Looking to Sell
Local media
Tata Power Co Ltd is evaluating renewable energy projects totaling over
2,800 MW for acquisition, the Business Line reported on December 2,
2013. In October, the company had acquired a 39-MW wind farm in
Gujarat.
Jindal Steel and Power (JSPL) will acquire a majority stake of 53.63%
in Gujarat NRE Coke's loss-making Australian subsidiary through a
complex deal, which involves issue of convertible notes, placement of
shares and option to acquire shares at a later stage, the Financial Express
reported on October 28, 2013. The deal, announced in September, was
cleared on October 27, 2013 by the shareholders of Gujarat NRE Coking
Coal, which is the Australian subsidiary of Kolkata-based Gujarat NRE
Coke.
Public sector company SJVN Ltd. may acquire two hydro electric projects
owned by Jaypee Group if the later goes for open bidding, the Hindu
reported on September 16, 2013. SJVN Chairman and Managing Director
R. P. Singh said the private sector company was selling two of its major
hydro projects, the 1,000 MW Karcham Wangtoo and 300 MW Baspa
hydro electric projects, to square off some of its debts. The Jaypee Group
is believed to be in touch with many players including the UAE
Government-owned Abu Dhabi Water and Electric Authority (ADWEA) and
might choose not to go for an open international bidding.
State-owned NHPC was in the process of buying back its shares worth up
to INR 23.68bn between November 29 and December 12, Business Today
reported. The company was to buy back 123,00,74,277 fully paid-up equity
shares of INR 10 each at a price of INR 19.25 per share, which
represented 8.89% of its total paid-up equity share capital and free
reserves as of June 30, 2013. Prior to the buyback, the government held
86.36% in NHPC.
Essar Energy, the India-focused and London-listed oil, gas and power arm
of the Essar group, will be divesting its exploration and production (E&P)
assets globally to raise funds for further growth, the Financial Express
reported on November 26, 2013. Essar Energy CEO Sushil Maroo did not
give any deadline for completing the process or the amount that the
company would raise, but alluded to the fact that Essar Energy would look
at exiting most of its non-core or non-performing assets in the near future.
On Nov 7, 2013, the Indian government approved a secondary share sale
of PowerGrid Corp., open from Dec 3 to Dec 5 for institutional buyers and
to Dec 6 for retail investors, the Economic Times of India reported.
PowerGrid’s follow-on public offer (FPO) got subscribed 0.06 times on day
1 and 1.06, 4.77 and 6.74 times on days 2, 3 and 4 respectively. The offer
included a government disinvestment of 4% and the sale of 601.9 million
new shares, equivalent to 13% of the existing paid-up capital. Post-issue,
the government’s holding in PowerGrid came down to 57.89% from
69.42%. The shares were offered at INR 85-90 per share and could fetch
around INR 70.83bn at the upper end of the price range. The company
may raise some INR 57.17bn, while the government may receive some
INR 17.58bn. PowerGrid’s IPO was held in October 2007. The
government has set a target to raise some INR 400bn from disinvestment
in the current fiscal year, ending Mar 31, 2014.
The Jaypee Group is in talks with Abu Dhabi National Energy
Company PJSC (TAQA) to sell its hydro-power projects, Business Line
reported on September 17, 2013. Earlier in September, the group, whose
interests range from engineering and construction to cement and sports,
sold its Gujarat cement unit for INR 38bn to UltraTech Cement of the
Aditya Birla Group.
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Source:
Liquidity and Solvency Ratios of Major Players
Liquidity Ratios of Major Players
Solvency Ratios of Major Players
Cash Flow/Earnings Index of Major Players
Comments
Company data, EMIS Insight calculations
PowerGrid NTPC NHPC Tata Power GAIL
Debt-to-Assets
2012 61.36% 36.09% 34.18% 35.84% 20.28%
Debt-to-Assets
2011 59.2% 35.7% 33.44% 31.65% 14.79%
Debt-to-Capital
2012 72.21% 41.97% 40.09% 44.53% 27.22%
Debt-to-Capital
2011 69.45% 40.69% 40.10% 39.47% 19.82%
Debt-to-Equity
2012 259.87% 72.33% 66.91% 80.29% 37.41%
Debt-to-Equity
2011 227.36 68.6% 66.94% 65.20% 24.72%
PowerGrid NTPC NHPC Tata Power GAIL
Cash
Flow/Earnings
Index 2012
2.61 1.23 0.81 0.42 1.25
Cash
Flow/Earnings
Index 2011
1.97 1.16 0.75 0.56 1.23
Liquidity, measured by the current ratio, improved for GAIL and NHPC and
worsened for the other three observed companies in 2012. The quick ratio
reflects the y/y increase in current liabilities, observed in all companies
except NHPC, and the decrease or non-proportional increase in cash and
receivables. The cash ratio shows that NTPC and NHPC had more cash
relative to current liabilities compared to the other three companies.
Solvency weakened for all five observed companies. The three solvency
ratios were similar for the three power generators – NHPC, NTPC and Tata
Power, and widely different for the other two companies, active in electricity
and gas transmission and distribution, respectively.
A Cash Flow/Earnings Index of 1.0 would indicate parity between a
company’s net operating cash flows and net income. An index below 1.0
could be a sign of high levels of debt financing.
PowerGrid NTPC NHPC Tata Power GAIL
Current Ratio
2012 0.43 1.82 1.91 0.83 1.01
Current Ratio
2011 0.56 2.17 1.76 1.33 0.86
Acid Test 2012 0.22 1.06 1.24 0.43 0.55
Acid Test 2011 2.68 4.05 4.05 2.62 1.49
Cash Ratio 2012 0.13 0.82 0.92 0.15 0.27
Cash Ratio 2011 0.22 1.03 0.92 0.43 0.13
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Highlights
Source:
GAIL India Ltd.
Financial Performance
Physical Performance by Segments
Gail India Ltd., headquartered in New Delhi, is the largest
state-owned gas transporter and marketer in India. The
company is active in the following segments: transmission
of natural gas and LPG, natural gas trading, production of
petrochemicals, LPG and liquid hydrocarbons, and
telecommunications.
GAIL, formerly known as the Gas Authority of India Ltd.,
was set up in 1984 to create gas infrastructure in the
country. GAIL began city gas distribution in New Delhi in
1997. GAIL Gas Ltd. is a wholly-owned subsidiary of GAIL,
set up in 2008, to manage its PNG/CNG business.
As of March 31, 2013, GAIL held some 60% market share
in gas marketing in India. The company claimed 75% in the
gas transmission business in the country.
GAIL is the only company in India, which owns and
operates LPG transmission pipelines for third-party usage.
The company has seven LPG plants in the country which
produced a total 1.38 million tonnes of liquid hydrocarbons
between April 1, 2012 and March 31, 2013.
In the Exploration and Production (E&P) segment, the
company has been awarded exploration rights for a total 32
blocks, 30 of which in India and two overseas.
GAIL has international presence, including stakes in JV
companies, wholly-owned subsidiaries and representative
offices, in China, Egypt, Myanmar, Singapore and the
United States.
Company data
Unit 2011 2012
Natural Gas Throughput mmscmd 117.62 104.90
Natural gas Trading mmscmd 84.17 81.44
Liquid Hydrocarbon Sales thou tonnes 1,441 1,371
Polymer Sales thou tonnes 448 427
LPG Transported thou tonnes 3,362 3,136
244 254
329
408
480
42 46 52 53 61 28 31 36 37 40
2008 2009 2010 2011 2012
Gross Sales, INR bn Profit Before Tax, INR bn Profit After Tax, INR bn
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Source:
GAIL India Ltd. (cont'd)
Five-Year Gas Throughput/Production Overview
Statement of Cash Flows
Its wholly-owned subsidiary GAILTEL operates in
bandwidth and infrastructure leasing.
GAIL moved from being a captive renewable energy
producer to being a commercial producer, after launching
some 100 MW of wind energy projects in 2011. In its
annual report, the company announced plans to further
expand its wind and solar energy portfolio.
GAIL is one of the three upstream companies that share
the under-recoveries of Oil Marketing Companies (OMCs)
by selling them petroleum products at a discount. In an
effort to make LPG affordable to domestic consumers, the
company has contributed a total INR 165.19bn since 2003.
GAIL’s contribution to OMCs’ under-recovery burden
totalled INR 26.87bn in 2012, slightly down from INR
31.83bn in the previous year.
The gas transporter and marketer is listed on both Indian
stock exchanges as well as on the London Stock
Exchange.
GAIL's operating cash flows were not sufficient to finance
investments in 2011 and 2012. Long-term borrowing
increased in 2012 compared to 2011. Unlike in 2011, in
2012 GAIL took on short-term debt. Cash increased by INR
14.27bn in 2012 compared to a net decrease of INR 12bn
in the previous year.
Company data
Unit 2008 2009 2010 2011 2012
Natural Gas MMSCMD 83.29 106.73 117.62 117.91 104.9
LPG M/T
(metric tonnes) 1,087,986 1,099,554 1,068,156 1,124,341 1,077,866
SBP
Solvent/Naphtha M/T 101,493 102,479 111,140 146,123 147,988
Pentane M/T 58,392 58,551 34,523 23,144 20,739
Propane M/T 152,671 179,274 155,152 146,015 129,570
Ethylene M/T 431,580 429,992 428,444 457,080 448,534
HDPE/LLDPE M/T 420,108 417,147 416,396 441,136 441,051
2011,
INRbn
2012,
INRbn
Cash Flow from Operating Activities 44.88 50.33
Cash Flow from Investing Activities -71.42 -54.72
Cash Flow from Financing Activities 14.54 18.65
Net Increase/Decrease in Cash and Cash Equivalents -12.00 14.27
Cash and Cash Equivalents at the Beginning of the
Year 21.31 9.31
Cash and Cash Equivalents at the End of the Year 9.31 23.58
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Highlights
Source:
NHPC Ltd.
Financial Performance
Power Generation Overview
NHPC Ltd. is a hydropower generating company based in Faridabad in the state of Haryana. As of Mar 31, 2012, the government of India controlled 86.36% in the company.
NHPC, which is listed on both the Bombay and National Stock Exchanges, had a total five subsidiaries and joint venture companies in 2012. The utility was awarded a Miniratna status in 2008.
NHPC, set up in 1975, operated 16 power stations with an installed capacity of 4,227 MW as of March 31, 2013. In addition, it operated two power stations of its subsidiary, NHDC Ltd., with an installed capacity of 1,520 MW. As of Mar 31, 2012, the company had a 14.55% share of India’s installed hydroelectric power capacity (5.75 GW out of 39.5 GW).
NHPC launched the 231-MW Chamera-III hydro project in Himachal Pradesh in Jul 2012, the 44-MW Chutak project in Jammu & Kashmir in Jan 2013 and the 132-MW Teesta Low Dam III HEP project in West Bengal in May 2013. In addition, all the three units of the 45-MW Nimmo Bazgo project were launched at partial load.
Six hydropower projects with an installed capacity of 4,050 MW were under construction at the end of the company’s most recent completed financial year in March 2013. Two of these projects, the 760-MW Uri-II and Parbati-III were in advanced stages of completion.
NHPC has also been working on capacity additions of 3,686 MW to be developed through JVs with central and state utilities.
Net cash from operations decreased in 2012 (see next slide) but was sufficient to cover the company’s investments. The company took on less debt compared to 2011 but repaid more, resulting in negative cash from financing activities. The company reported lower ending cash and increased borrowing in 2012 compared to 2011.
Company data
26.72
42.19 40.47
55.10 50.49
10.75
20.91 21.67
27.72 23.48
3.25 6.77 7.38 8.61 7.38
2008 2009 2010 2011 2012
Sales, INR bn Net Profit, INR bn Dividend Proposed/Paid, INR bn
9,863 11,046 11,286
12,567 13,049
14,813
16,689 16,960
18,604 18,683 18,923
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Power Generation, GWh
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Source:
NHPC Ltd. (cont'd)
NHPC Borrowings
Other Lines of Business
Statement of Cash Flows
Number of Employees
Company data
13,017
13,648 13,470
13,118
12,768
12,341 12,028
11,712 11,420
11,036
10,410
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Number of Employees
NHPC is registered with the World Bank, the Asian Development
Bank, the African Development Bank, the Kuwait Fund for Arab
Economic Development and the Central Water Commission as a
consultant in the area of hydropower.
The company has so far completed 84 consultancy assignments and
has 17 assignments under progress.
Apart from hydropower generation, NHPC has taken up initiatives in
solar power.
70.22 71.67 75.32
99.56
122.34 138.68 145.69
176.41 186.27
2004 2005 2006 2007 2008 2009 2010 2011 2012
Borrowings, INR bn (include current maturities of long-term borrowings)
2012, INRbn 2011, INRbn
Net Cash from Operating Activities 18.98 20.84
Net Cash (Used in) Investing
Activities -12.95 -19.76
Net Cash Flow from Financing
Activities -9.91 5.45
Net Increase/Decrease in Cash and
Cash Equivalents -3.88 6.54
Cash and Cash Equivalents at the
Beginning of the Year 60.04 53.5
Cash and Cash Equivalents at the
End of the Year 56.16 60.04
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Highlights
Source:
NTPC Ltd.
Financial Performance
Commercial Capacity and ESO (standalone)
NTPC Ltd, formerly called National Thermal Power Corporation, is India's largest power utility. The Delhi-based company, set up in 1975, is listed on both Indian stock exchanges and was awarded a Maharatna status in 2010.
As of March 31, 2013, the utility was 75.00% owned by the government of India.
The company's core business is engineering, construction and operation of power plants. It also provides consultancy services to both Indian and foreign power utilities.
As of March 31, 2012, NTPC had an installed generation capacity of 34.82 GW, which accounted for 15.7% of India's total installed capacity of 223 GW. Standalone coal-based and gas-based plants had capacity of 31.9 GW and 3.96 GW, respectively. Group generation capacity was 41.18 GW in 2012, against 37 GW a year earlier. With standalone power generation of 232.03 TWh, the company claimed a 25% share of India’s total generation in 2012.
As of March 31, 2012, NTPC had five subsidiaries and 21 joint venture companies. JVs reported a total 5.36 GW of capacity, 3.4 GW and 1.94 GW of which were fuelled by coal and gas, respectively.
Standalone number of employees was 23,865 in 2012 against 24,011 in 2011, and group employees were 25,484 against 25,511 in 2011, respectively.
NTPC's operating cash was sufficient to cover its investment activities in both 2012 and 2011. Long-term debts increased which drove ending cash up at the end of the period. The dividends NTPC paid out accounted for 44% of net profit in 2012, compared to 40% in 2011.
Company data
452.29 492.34
573.99
645.15 679.31
82.01 87.28 91.03 92.24 126.19
0
100
200
300
400
500
600
700
800
2008 2009 2010 2011 2012
Total Revenue, INR bn Net Profit, INR bn
27,850 28,840 29,830 30,990
34,820
193.69
205.09 206.58 206.68
215.92
180
185
190
195
200
205
210
215
220
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2008 2009 2010 2011 2012
Commercial Capacity , MW Energy Sent Out (ESO), TWh
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Source:
NTPC Ltd. (cont'd)
Capacity and Generation by Regions, 2012
NTPC Long and Short-Term Debt
Number of Employees
Statement of Cash Flows
Company data
Number of Stations -
Fuel Type By Station Capacity MW
Gross
Generation,
GWh
Northern Region 4 - Coal 5,990 44,372
National Capital Region 2 - Coal; 4- Gas 4,869 29,421
Western Region 4 - Coal; 2 - Gas 12,154 71,540
Eastern Region 4 - Coal 7,900 51,670
Southern Region 2 - Coal; 1 - Liquid
Fuel 4,960 35,025
Total 35,872 232,028
23,639
23,743
23,797
24,011
23,865
2008 2009 2010 2011 2012
Number of EmployeesNote: Figures exclude joint venture companies and
subsidiaries
2012, INRbn 2011, INRbn
Net Cash from Operating Activities 154.95 107.10
Net Cash (Used in) Investing Activities -140.17 -78.81
Net Cash Flow from Financing Activities -7.52 -28.69
Net Increase/Decrease in Cash and
Cash Equivalents 7.26 -0.40
Cash and Cash Equivalents at the
Beginning of the Year 161.42 161.82
Cash and Cash Equivalents at the End of
the Year 168.68 161.42
345,663 377,836
431,750
502,671 581,457
14.20
133.90 132.60 122.60
0.00 0
20
40
60
80
100
120
140
160
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2008 2009 2010 2011 2012
Long-Term Loans, INR mn Short-Term Loans, INR mn
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Highlights
Source:
PowerGrid Corporation of India Ltd.
Financial Performance
Power Transmitted and Length of Transmission Lines
PowerGrid Corporation of India Ltd. is the country’s Central
Transmission Utility (CTU) active in bulk power transmission
and in charge of operating the national and regional power
grids of India. PowerGrid also plans and supervises the
development of India’s inter-state transmission system.
The company, set up in 1989, was listed on both Indian stock
exchanges in 2007 and as of March 31, 2013 was 69.42%
controlled by the President of India. In 2008, it was awarded a
Navratna status, meaning it has the autonomy to undertake
new transmission projects of any amount without the approval
of its Board of Directors.
As of March 31, 2013 the company owned and operated a
transmission network of some 100,200 ckt km of inter-state
transmission lines and 197 EHV & HVDC substations with
transformation capacity of about 164,763 MVA.
PowerGrid had three subsidiaries and held stakes in 12 joint-
venture companies as of Mar 31, 2013. As of Nov 2013, it also
operated an all-India broad-band telecom network of some
29,300 km.
The company has worked as consultant and developer of
projects in Afghanistan, Bangladesh, Bhutan, Ethiopia, Nigeria,
Nepal, Kenya, Myanmar, Sri Lanka, Tajikistan and UAE.
Cash from operating and financing activities was insufficient to
cover investment both in 2011 and 2012, and the company
reported net cash decreases in both years. Borrowing
increased y/y in 2012, weakening both liquidity and solvency.
Company data
53.24
67.01
79.02
95.44
121.63
61.39
75.04
90.99
107.85
133.29
16.91 20.41 26.97
32.55 42.35
2008 2009 2010 2011 2012
Transmission Charges, INR bn Total Revenue, INR bn Net Pprofit, INR bn
71,500 75,290 82,355 92,981 100,200
334,013 363,723
400,596 430,992
450,027
2008 2009 2010 2011 2012
Length of Transmission Lines, ckt km
Power Transmitted on PowerGrid network, GWh
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Source:
PowerGrid Corporation of India Ltd. (cont'd)
Sources of Funds, %, 2012
Cash Flow Statement
PowerGrid Total Debt, INR bn
Number of Employees (l), Sub-Stations (r)
Company data
8,214
9,162
9,775
9,670
9,347
2008
2009
2010
2011
2012
Number of Employees
120
124
135
150
167
2008
2009
2010
2011
2012
Number of Sub-Stations
277 332 372
491
631
22
26
31
8 13
15
17
20
0
100
200
300
400
500
600
700
800
2008 2009 2010 2011 2012
Short-Term Loans, INR bn
Current Maturities of Long-Term Loans, INR bn
Total Long-Term Loans,INR bn
534.02
408.83
344.17
284.65
681.88
Bonds (Incl. Foreign Currency Bonds) 43.91%
Reserves 21.08%
Foreign Currency Loans 18.87%
Deferred Tax & Net Current
Liabilities 7.78%
Equity 4.52%
Short-Term Loans 1.95%
Loans from Banks and Financial
Institutions 1.78%
Grants 0.11%
2012, INR bn 2011, INR bn
Net Cash from Operating Activities 110.46 64.03
Net Cash (Used in) Investing
Activities -217.11 -158.34
Net Cash Flow from Financing
Activities 99.90 80.89
Net Increase/Decrease in Cash and
Cash Equivalents -6.75 -13.43
Cash and Cash Equivalents at the
Beginning of the Year 23.37 36.80
Cash and Cash Equivalents at the
End of the Year 16.62 23.37
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Highlights
Source:
Tata Power Ltd.
Standalone and Consolidated Financial Performance
Ten-Year Standalone Generation, Net Profit Overview
Tata Power, which assumed its current name in 2000, is one of India’s leading privately-held utilities with a significant international presence.
As of March 31, 2013, the company had an installed generation capacity of 8,521 MW in India and a presence in all the segments of the power sector - generation (thermal, hydro, solar and wind), transmission, distribution and trading. It is also a partner in a number of public-private projects in power generation, transmission and distribution in India.
As of March 31, 2012, Tata Power, which is listed on two Indian stock exchanges, had a wind generation installed capacity of 398 MW (375 MW in 2011) and plants spread across Maharashtra, Gujarat, Tamil Nadu and Karnataka – the leading states in promoting wind power generation in India.
Tata Power’s international investments include a stake in coal mines and a geothermal project in Indonesia; a coal supply project in Singapore; a joint venture to develop projects in South Africa, Botswana and Namibia; an investment in geothermal and clean coal technologies in Australia; and a hydro project in partnership with The Royal Government of Bhutan.
As of March 31, 2013, Tata Power owned 23 subsidiaries (14 wholly owned), 26 joint venture companies and 10 associates. Including major subsidiaries, the company employed 4,830 people, against 4,709 a year earlier.
Company data
84.96 95.67
260.01 330.25
11.70 10.25
-9.68 0.99
2011 2012 2011 2012
Standalone Consolidated
Revenue from Operations (Net of Excise Duty), INR bn Net Profit, INR bn
12,917 13,283 13,746 14,269 14,717 14,807 15,946 15,325 15,230 15,770
5.09 5.51 6.11
6.97
8.7 9.22 9.39 9.41
11.7
10.25
0
2
4
6
8
10
12
14
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Generation, GWh, (l) Net Profit, INR bn (r)
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Source:
Tata Power Ltd. (cont'd)
Installed Capacity of the Tata Power Group of Companies Tata Power Group of Companies - Other Businesses
Company data
Fuel Source Location State
Installed
Capacity
MW
Total
Capacity by
Category,
MW
Thermal –
Coal/Oil/Gas
Mundra Maharashtra 4,000
7,407
Trombay Jharkhand 1,580
Maithon Gujarat 1,050
Jojobera Jharkhand 428
IEL – Jojobera Jharkhand 120
Rithala New Delhi 108
Belgaum Karnataka 81
Lodhivali Maharashtra 40
Thermal –
Waste Heat Recovery
IEL – Jojobera Jharkhand 120 240
Haldia West Bengal 120
Hydro
Bhira Maharashtra 300
447 Khopoli Maharashtra 75
Bhivpuri Maharashtra 72
Renewables
Wind farms
Maharashtra,
Gujarat,
Karnataka, Tamil
Nadu
398
427
Solar Photovoltaic (PV) Maharashtra,
Gujarat 28
Total 1 8,521
Business Location Details
Transmission
Mumbai Over 1,110 ckm of transmission lines, connecting
generating stations to 19 receiving stations.
Eastern/North
Eastern Regions
Installed transmission lines which transmit surplus
power from the Eastern/North Eastern region
(Siliguri) to Uttar Pradesh (Mandaula), covering a
distance of 1,166 km.
Distribution Mumbai Over 2,500 ckm of distribution lines.
New Delhi Over 10,500 ckm of distribution lines.
Retail
Mumbai
Over 380,000 customers with sales of over 6,500
MUs in FY13, emerging as the largest Distribution
Company in Mumbai.
New Delhi Over 1.3 million customers with sales of over
7,760 MUs in FY13.
Strategic Electronics Mumbai
One of the leading suppliers of defence
equipment and solutions amongst the Indian
Private Sector.
Power Services Mumbai
One of the leading service providers for Project
Management, O&M and specialised services in
the power sector.
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Source:
Tata Power (cont'd)
Performance by Major Items
Standalone and Consolidated Cash Flow Statements
Comments
Company data
2012 2011 Change,
INRbn % Change
Revenue from Power
Supply and
Transmission
Charges, INRbn
9,081.33 8,051.53 1,029.80 13
Finance Costs,
INRbn 6.78 5.15 1.63 32
Depreciation and
Amortisation, INRbn 3.64 5.70 -2.06 -36
Tata Power reported higher Revenue from Power Supply in 2012 compared
to 2011 mainly because of higher fuel costs.
The company reported higher financing costs mainly due to the fresh issue
of INR 15bn of 10.75% Redeemable and Non-Convertible Debentures.
Depreciation was lower mainly due to a one-time impact of a change in the
depreciation rate and methodology authorised by the Ministry of Corporate
Affairs (MCA) for companies engaged in the generation and supply of
electricity.
In 2012, standalone net operating cash decreased 34% y/y. The company
invested less in 2012 compared to the previous year, took on more short-
and long-term debt, but, unlike in 2011, did not issue Unsecured Perpetual
Securities which are classed as equity instruments. This resulted in a
deepened net decrease in cash and 39% less ending cash compared to
2011.
2012, INR bn 2011, INR bn 2012, INR bn 201, INR bn
Net Cash from Operating Activities 4.32 6.51 32.80 11.47
Net Cash Used in Investing Activities -14.94 -19.88 -42.86 -61.28
Net Cash from Financing Activities 8.03 11.63 -5.87 57.98
Net Increase/Decrease in Cash and Cash
Equivalents -2.60 -1.74 -15.93 8.17
Cash and Cash Equivalents at the
Beginning of the Year 6.61 8.35 31.22 21.41
Cash and Cash Equivalents at the End of
the Year 4.01 6.61 17.90 31.22
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IX. Appendix
India’s fiscal year runs from Apr 1 to March 31. Thus, FY 2012 (also called fiscal 2012) means Apr 1, 2011 – Mar 31, 2012. In Indian documents, FY (fiscal) 2012 is also labeled FY11-12.
Indian fiscal year 2013 ends in March 2013 and the remaining nine months of calendar 2013 belong to fiscal year 2014.
In order to better align with calendar years and make international comparisons more meaningful, Emerging Markets Insight has chosen to label data by the year in which most of the result
occurred. Unless otherwise stated, in graphs throughout this report, 2011, for example, means the 12 months between Apr 1, 2011 - Mar 31, 2012, or what in India is referred to as fiscal 2012.
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Source:
Table of Terms and Abbreviations
Table of Terms and Abbreviations
Reference sources
kWh A unit of energy equivalent to one kilowatt (1 kW), or 1,000 watts, of power expended for one hour (1 h) of time.
MW A unit of electric power equal to one million (10^6) watts
GW A unit of electric power equal to one billion (10^9) watts, one thousand megawatts
MU, BU Million Units, Billion Units; 1 MU = 1 GWh, 1 BU = 1 TWh. For example, 855 BU=855,000 MU=855 TWh
MMT, BMT Million Metric Tonnes, Billion Metric Tonnes
Plant Load Factor (PLF) Plant Load Factor is the ratio of the actual output of a power plant over a period of time and its output if it had operated a full capacity of
that time period. PLF = Gross Generation / (Installed Capacity * Number of Hours)
Load Shedding The deliberate shutdown of parts of a power distribution system to prevent the failure of the entire system when demand strains capacity.
MWe Megawatt electrical, used in the electric power industry
MWth or MW t Megawatt thermal, refers to a unit of tehrmal power produced
ckt km, circuit kilometers The route kilometers of revenue producing circuits in service, determined by measuring the length in terms of kilometers, of the actual
path followed by the transmission medium.
MMBtu One million Btu = British Thermal Unit, a unit of energy used for natural gas. Approximately 1,000 ft3 of natural gas ≈ 1 MMBtu ≈ 1 GJ
(gigajoule).
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Source:
Ratio Calculation Formulas
Calculation of Liquidity Ratios
Calculation of Solvency Ratios
Emerging Markets Insight;
Ratio Name What it Measures Calculation
Debt-to-assets The percentage of total assets financed with debt Total interest-bearing debt (long-term borrowings+current portion of long-term borrowings+short-term
borrowings) ÷ Total Assets
Debt-to-Capital The percent of total capital (debt+equity) financed through
debt Total debt ÷ (Total Debt + Total Shareholders' Equity)
Debt-to-Equity The amount of debt financing relative to equity financing Total debt ÷ Total Shareholders' Equity
Cash Flow/Earnings Index Operating cash generated per rupee of net income Net Cash Flow from Operations ÷ Net Income
Ratio Name What it Measures Calculation
Current Ratio A unit of current assets per unit of current liabilities.
Higher ratio means higher level of liquidity. Current Assets ÷ Current Liabilities
Quick (Acid Test) Ratio
More conservative than the current ratio. Reflects the
fact that certain current assets cannot be easily
converted into cash.
(Cash + Current Investments + Receivables) ÷ Current Liabilities
Cash Ratio The most stringent liquidity ratio. A measure of a
company’s liquidity n a crisis. (Cash + Current Investments) ÷ Current Liabilities
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