POWER SECTOR Industry Analytics

ALLIANCE BUSINESS SCHOOL

INDUSTRIAL ANALYTICS

PGP-IPower sector

SUBMITTED TO : PROF. SAMIK SHOME

DATE : 6/4/2009

SECTION : C

SUBMITTED BY: GROUP NO: 2

ADITHYA RAJ (08PG136)

ARVIND KUMAR SHARMA (08PG156)

LOKESH MAHAJAN (08PG168)

POONAM RATHI (08PG179)

SAUMYA SAURABH (08PG192)

SWATI AGARWAL (08PG204)

Power Sector Report (Apr - 2009)

CONTENT

TOPIC PAGE NO.

EXECUTIVE SUMMARY 7

Chapter 1 OVERVIEW OF POWER SECTOR

1.1 Introduction 10

1.2 Global Overview 11

Chapter 2 REVIEW OF LITERATURE 16

Chapter 3 POWER SECTOR IN INDIA

3.1 Power Sector in India 22

3.1.1 Emergence of regional Power systems 23

3.1.2 Generation 23

3.1.3 Transmission 26

3.1.4 Power for All by 2012 31

3.1.5 Distribution 33

Chapter 4 SEGMENTS IN POWER GENERATION

4.1 Thermal Power 41

4.2 Hydro Power 45

4.3 Nuclear Power 47

4.4 Solar 48

4.5 Wind 49

4.6 Small Hydro 50

Chapter 5 REFORMS IN POWER SECTOR

5.1.1 Pre – Reform Stage 52

5.1.2 Electricity Act 2003 55

5.1.3 Electricity Act 2007 60

Chapter 6 IMPACT OF POWER SECTOR

Power Sector Report – ABS, Bangalore 2 | P a g e


6.1 Impact of Power Sector 64

6.1.1 Local Impact 64

6.1.2 Regional Impact 65

6.1.3 Global Impact 66

6.2 National Environmental Legislation Affecting the Sector 66

6.3 National Environmental Policies Relevant to Sector 67

Chapter 7 STUDY OF SELECTED COMPANIES

7.1 NTPC Ltd. 70

7.2 Reliance Infrastructure 75

7.3 Tata Power Ltd. 78

7.4 Power Grid Corporation 82

7.5 Torrent Power Ltd. 85

7.6 JP Hydropower 87

7.7 Energy Develop 89

7.8 KSK Energy 90

7.9 GVK Power 92

7.10 Indowind Energy 95

Chapter 8 ANALYSIS OF POWER SECTOR

8.1 Ratio Analysis 99

8.2 Regression Analysis 120

8.3 Trend Analysis 124

8.4 Judgemental Analysis 128

8.5 Expert’s Opinion 129

8.6 Porter’s Five Force Model 131

8.7 SWOT Analysis 133

Chapter 9 ISSUES AND CHALLENGES 137

Chapter 10 CONCLUSION AND FINDINGS 140

REFERENCES 143

APPENDIX 147



LIST OF TABLES

TOPIC PAGE NO.

1. OECD Multinational Electricity companies 13

2. Gap between demand and supply of power 24

3. Growth of Transmission 28

4. Details of Sub-stations region 29

5. Details of Funds released under APDRP 35

6. Power Sector Reforms 52

7. Ratio Analysis of NTPC 103

8. Ratio Analysis of Power Grid Corp. 104

9. Ratio Analysis of Reliance Infra 105

10.Ratio Analysis of Tata Power 106

11.Ratio Analysis of Torrent Power 107

12.Ratio Analysis of Indowind Energy 108

13.Ratio Analysis of Energy Develop 109

14.Ratio Analysis of GVK Power 110

15.Ratio Analysis of JP Hydro 111

16.Ratio Analysis of KSK Energy 112

17.Comparative Ratio Analysis (Top 5 Companies) 113

18.Comparative Ratio Analysis(Bottom 5 Companies) 116

19.Trend Analysis 123

20.Porter’s Five Forces analysis 130



LIST OF FIGURES

TOPIC PAGE NO.

1. World Marketed Energy Consumption,1980-2030 12

2. Comparative Per Capita Consumption of Electricity 14

3. Comparison of Energy Intensity 44

4. State-wise hydro-power generation 46

5. Growth of NTPC 73

6. NTPC Performance 74

7. Output of trend Analysis – Exponential method 124

8. Output of trend Analysis – Moving Average method 125

9. Porter’s Five Force Model 129

10.SWOT Analysis 131

11.SWOT Analysis Framework 132



POWER SECTOR


http://en.wikipedia.org/wiki/File:Electricalgrid.jpg


EXECUTIVE SUMMARY

Availability of power is one of the important ingredients for industrial growth. It is an

important infrastructure facility without which no industrial activity can be thought of in

modern times. Increasing automation of Indian industries has created huge demand of power

in India. This huge demand has resulted into demand supply gap in India in recent times.

This report is based on the extensive study of the power sector in India. Both global and

domestic perspectives of power sector focusing more on Indian players have been looked

upon in this report. It includes the literature review by scholars which has analyzed the

subject of power sector more extensively. The objective of this report is to get a

comprehensive and apparent knowledge of the power sector, and to study the changes in

power sector over a period of time there by analyzing various aspects of the power sector. In

the report the power generation companies of the industry chosen, are the top five and bottom

five companies of the power sector in India, based on the sales turnover. The trends in the

demand, supply and generation in the power sector is discussed through the trend analysis.

Before 2001, India’s electricity-supply was mainly owned and operated by public sector. It

was running under the risk of bankruptcy. This created a serious impediment to investments

in the sector at the time when India desperately needed them. This led to the emergence of

Private players in the power sector.

The NTPC, Reliance Infra, Tata Power, Power Grid, & Torrent Power are the market leaders

in the power sector and have high Cumulative Annual Growth Rate (CAGR). This is because

of the government support, inflow of foreign investment, growing demand and use of latest

technology for power generation and transmission. The best management policies are

adopted by these companies. The small players GVK power, Indowind Energy, Energy

Development, JP Hydro, and KSK energy are also imparting new technology, and

management policies to survive the competition and meet the demand of power sector.



The methodology used in report includes comparative analysis of the top 5 and bottom 5

companies of the sector. The Potter’s five forces analysis, SWOT analysis, Trend analysis &

Ratio analysis are used to analyze the industry of power sector. The various analysis shows

that there has been a continuous growth in generation and consumption of power in India.

Thermal, hydro and nuclear are three major source of power generation From the installed

capacity of only 1,362mw in 1947, has increased to 97000 MW as on March 2000 which has

since crossed 100,000 MW mark India has become sixth largest producer and consumer of

electricity in the world equaling the capacities of UK and France combined. The number of

consumers connected to the Indian power grid exceeds is 75 million. Rural electrification is

one significant initiative of the industry to trigger economic development and generate

employment by providing electricity as an input for productive uses in agriculture and rural

industries, and improve the quality of life of the rural people.

The International Energy Outlook 2006 (IEO2006) projects strong growth for worldwide

energy demand over the 27-year projection period from 2003 to 2030. Much of the growth in

energy demand is among the developing countries in Asia, which includes China and India;

demand in the region nearly triples over the projection period. Total primary energy

consumption in the developing countries grows at an average annual rate of 3.0 percent

between 2003 and 2030. In contrast, for the developed countries—with its more mature

energy-consuming nations—energy use grows at a much slower average rate of 1.0 percent

per year over the same period. This huge increase in projected demand of energy in India and

China makes analysis of energy sector of these countries very important.

World electricity generation rose at an average annual rate of 3.7% from 1971 to 2004,

greater than the 2.1% growth in total primary energy supply. Total world consumption of

marketed energy is projected to increase by 50 percent from 2005 to 2030.



CHAPTER 1

OVERVIEW OF POWER SECTOR



1.1. INTRODUCTION

An economy’s growth, development, ability to handle global competition is all dependent on

the availability, reliability and quality of the power sector. As the Indian economy continues

to surge ahead, electrification and electricity services have been expanding concurrently to

support the growth rate. The demand for power is growing exponentially and the scope of

growth of this sector is immense.

Existing generation suffers from several recurrent problems. The efficiency and the

availability of the coal power plants are low by international standards. A majority of the

plants use low-heat-content and high-ash unwashed coal. This leads to a high number of

airborne pollutants per unit of power produced. Moreover, past investments have skewed

generation toward coal-fired power plants at the expense of peak-load capacity. In the context

of fast-growing demand, large T&D losses and poor pooling of loads at the national level

exacerbate the lack of generating capacity.

India is one of the main manufacturers and users of energy. Globally, India is presently

positioned as the 11th largest manufacturers of energy. It is also the worlds’ 6th largest energy

users. In spite of its extensive yearly energy output, Indian power sector is a regular importer

of energy because of huge disparity.

Global and Indian economy have decelerated, but power is one of the few commodities in

short supply in India. So, despite the sluggishness in production and demand for

manufactured products, India remains power hungry, both in terms of normal and peak power

demand. Power is derived from various sources in India. These include thermal power,

hydropower or hydroelectricity, solar power, biogas energy, wind power etc. The distribution

of the power generated is undertaken by Rural Electrification Corporation for electricity

power supply.



1.2. GLOBAL OVERVIEW

The energy required to support our economies and lifestyles provides tremendous

convenience and benefits. Energy consumption is reportedly higher in countries where less

than 5 % of the population lives below the poverty line than it is in countries where most

people live in poverty -- four times higher. For example, Americans make up less than 5 % of

the world’s population yet consume 26 % of the world’s energy. World electricity generation

rose at an average annual rate of 3.7% from 1971 to 2004, greater than the 2.1% growth in

total primary energy supply. This increase was largely due to more electrical appliances,

development of electrical heating in several developed countries and rural electrification

programmes in developing countries.

De-regulation in areas of the global energy markets has led to fierce competition. Now more

than ever electricity has to be produced at a lower cost with many countries imposing ever

tightening environmental legislation to reduce the impact power generation has on the

environment. The enormous challenges are recognised in providing electricity as efficiently

as possible and strive to develop technology to meet your needs. Collectively, developing

countries use 30% of the world's energy, but with projected population and economic growth

in those markets, energy demands are expected to rise 95 %. Overall global consumption is

expected to rise 50 % from 2005 to 2030.

World energy consumption is projected to expand by 50% from 2005 to 2030 in the IEO2008

reference case projection. Although high prices for oil and natural gas, which are expected to

continue throughout the period, are likely to slow the growth of energy demand in the long

term, world energy consumption is projected to continue increasing strongly as a result of

robust economic growth and expanding populations in the world’s developing countries.

Energy demand in the OECD economies is expected to grow slowly over the projection

period, at an average annual rate of 0.7%, whereas energy consumption in the emerging

economies of non-OECD countries is expected to expand by an average of 2.5 % per year.



China and India—the fastest growing non-OECD economies—will be key contributors to

world energy consumption in the future. Over the past decades, their energy consumption as

a share of total world energy use has increased significantly. In 1980, China and India

together accounted for less than 8 % of the world’s total energy consumption. In 2005 their

share had grown to 18 %. Even stronger growth is projected over the next 25 years, with their

combined energy use more than doubling and their share increasing to one-quarter of world

energy consumption in 2030 in the IEO2008 reference case. In contrast, the U.S. share of

total world energy consumption is projected to contract from 22 % in 2005 to about 17 % in

2030. Energy consumption in other non-OECD regions also is expected to grow strongly

from 2005 to 2030, with increases of around 60 % projected for the Middle East, Africa, and

Central and South America. A smaller increase, about 36 %, is expected for non-OECD

Europe and Eurasia (including Russia and the other former Soviet Republics), as substantial

gains in energy efficiency result from the replacement of inefficient Soviet-era capital stock

and population growth rates decline.

Fig .1: World Marketed Energy Consumption, 1980 - 2030

Source: EIA International Energy Annual 2005(June-October 2007)



Oil for power generation has been displaced in particular by dramatic growth in nuclear

electricity generation, which rose from 2.1% in 1971 to 15.7% in 2004. The share of coal

remained stable, at 40% while that of natural gas increased from 13.3% to 19.6%. The share

of hydro-electricity decreased from 23.0% to 16.1%. Due to large programmes to develop

wind and solar energy in several OECD countries, the share of new and renewable energies,

such as solar, wind, geothermal, biomass and waste increased. However, these energy forms

remain limited: in 2004, they accounted for only 2.1% of total electricity production. The

share of electricity production from fossil fuels has gradually fallen, from just under 75% in

1971 to 66% in 2004. This decrease was due to a progressive move away from oil, which fell

from 20.9% to 6.7%.

Table 1: OECD Multinational Electricity Companies

Company Activity Assets Countries Active

AES Generation 1666MW China, India, Pakistan, Sri Lanka

EDF Generation 1684MW China, Laos, Vietnam

TractebelGeneration &

supply848MW China, Thailand, Laos

Enron Generation 204MW Philippines, Guam

Intergen Generation 1830MWChina, Philippines, Singapore,

Australia

Mirant Generation 2261MW Philippines

Transalta Generation 280MW Australia

IP Generation 3817MW Australia, Pakistan, Thailand, Malaysia

CDC Generation 810MW Bangladesh

Source: http://www.tni.org/books/yearb05corporations.pdf.

As per the recent survery, the global electrical & electronics market is worth $1,038.8 billion,

which is forecasted to grow to $ 1,216.8 billion at the end of the year 2008. If electrical &

electronics production statistics are considered, the industry accounted for $1,025.8 billion in

2006, which is forcasted to reach $1,051.5 billion in future.


http://www.tni.org/books/yearb05corporations.pdf


Fig.2: Comparative Per Capita Consumption Of Electricity (Kwh)

The per capita consumption is seen to be far behind from the world average and very less

when compared to other countries. So there is a need to improve it.

Though India has achieved many milestones in generation still the there is a wide gap

between demand and supply of power. This is the most important issue to be concerned.



CHAPTER 2

LITERATURE REVIEW



2.1 REVIEW OF LITERATURE

Schwartz (2008), Studies the business of NAILD distributor through this article. The NAILD

is an organisation supporting lighting distributors in the US with publications, training, and

conferences. According to him, recent changes and trends in the lighting market provide new

opportunities. The keys to taking advantage of the opportunities is to understand the market,

know where to get more information, provide updates to your customers, and turn

information into active marketing and promotional efforts. The Energy Independence and

Security Act of 2007 add to the programs and efforts introduced in EPACT 2005. A key

component of the ENERGY STAR qualified light fixtures program is the Advanced Lighting

Package (ALP). As market trends and legislation move purchasers away from inefficient

technologies and towards energy-efficient products, NAILD distributors that become

ENERGY STAR Partners have an opportunity to increase sales and profits.

Sreekumar (2008) reviews the market-oriented power sector reforms initiated in India in the

early 1990s. It brings out a public interest oriented critique of the three phases of the reforms

—firstly, privatization of generation, secondly, state sector restructuring and finally, the

ongoing reforms since the passage of the Electricity Act 2003. Reforms were taken up as a

response to the crisis in the sector. The article questions the success of the process in solving

the crisis. While acknowledging positive elements like increase in transparency and

participation, it criticizes the process for neglect of development issues like rural

electrification and energy efficiency. The article concludes with some thoughts on developing

an alternate reform approach.

Augustine (2007), tries to put forth a model pertaining to transportation because India is

facing a huge increase in power consumption. The model is done with an aid of GAMS



(General Algebraic Modelling System). The power sector is represented in the model by

production capacities, cost of production and transmission, demand for power and the

distances between power plants and consumption centres. The author has considered major

power generating areas of the country like Ranchi, Bhopal, bhubwaneshwar, dhanbad,

Vishakhapatnam etc. The model described is very realistic, scalable and easy to implement,

but has only considered coal, hydroelectric and natural gas technologies. It can be expanded

to include other technologies and also can be made dynamic to provide solutions for different

time periods representing the maturing of the power generation plants during the duration of

the model.

Remes (2007) talks about Russia fourth largest user of electricity in the world, he talks about

RAO UES which controls all the transmission, distribution and supply of electricity, it

controls everything except nuclear power. Anatoly Chubais, The very core of the reform has

been to separate competitive businesses from natural monopolies, both legally, functionally

and regulatory. Consequently, competitive parts – generation companies, supply/sales

companies and service companies – have been separated into legally different companies

from natural monopolies – from Transmission Company, distribution companies and system

Operator Company. It is of utmost importance for the future, to prevent the creation of any

monopoly structures on the markets. UES is suggesting a change in the law allowing the

Antimonopoly Agency to interfere immediately when the share of any company in any

regional free-flow markets. Finally, concluding it can be said that Russia is ahead of the EU

in the reform of the power sector and power sector monopolies. Russia has been able to

create very sophisticated markets, with new elements, and with rational elements to the

regulations.

Yemula, Medhekar, Maheshwari, Khaparde, Joshi(2007) have put their opinion about

Interoperability in the power sector. According to Wikipedia, Interoperability is a property

referring to the ability of diverse systems and organizations to work together (inter-operate).

The term is often used in a technical systems engineering sense, or alternatively in a broad

sense, taking into account social, political, and organizational factors that impact system to



system performance. Basically they have considered organizational, application, information

and technical level interoperability. They believe that organization interoperability is ensured

by standard inter-organization protocol, which expresses the way in which organization share

data. Application Interoperability is achieved by enforcement of inter-application protocol.

Information interoperability is ensured at lower level by the compliance of standard

information model. Technical Interoperability is the result of application of standard device

level protocols.

Singh (2006) address the Power sector reforms in India. Reforms were initiated at a juncture

when the sector was plagued with commercial losses and burgeoning subsidy burden.

Investment in the sector was not able to keep pace with growing demand for electricity. This

paper takes stock of pre-reform situation in Indian power sector and identifies key concerns

that led to initiation of the process of reform. The paper discusses major policy and

regulatory changes undertaken since the early 1990s. The paper also illustrates changes in the

market structure as we move along the reform process. It also discuss some of the major

provisions of the recently enacted Electricity Act 2003 that aims to replace the prevailing acts

which govern the functioning of the power sector in the country. In this context, it discuss

two issues arising out of it, namely open access and multi-year tariff that we think would

have a significant bearing on the performance of the sector in the near future. The paper also

evaluates the reform process in the light of some of the regulatory changes undertaken.

Finally, the paper briefly discusses the issues involved in introduction of competition in the

power sector primarily through development of a market for bulk power.

Kumar, Khetan & Thapa (2005) highlights that India has set itself an ambitious target of

more than doubling per-capita electricity consumption by 2011. Indian power sector, with

current electricity shortages of over 11% of peak and 7% of energy, will be one of the key

determinants to future growth. The Indian government has worked steadily to liberalise the

sector and initiated reforms that culminated in the Electricity Act 2003. The Act brought

together structural and regulatory reforms designed to foster competitive markets, encourage

private participation and transform the state’s role from service provider to regulator. The Act



afforded consumers the ability to directly source their electricity from suppliers using

existing networks and recognised trading as a separate line of business. Despite the potential

offered by the India’s power sector, investors have long been weary of the sector’s

bureaucracy and regulatory complexity. With a critical mass of progress in regulatory reforms

and soaring economic growth, the Indian power sector is now primed for take off. How India

deals with the remaining challenges of the restructuring process and emerging fuel shortages

will dictate what happens in the years to come.

Newbery (2005) says that Modern infrastructure, particularly electricity, telecom and roads,

is critical to economic development. Electricity provides light, the ability to use modern

equipment, computers and access to ICT. Telecom facilitate information exchange and access

to the rest of the world, while transport infrastructure is critical for trade, and by lowering

transport costs extends the market and increases competition. If there is a surplus of

infrastructure, more investment adds little to total output, but if there is a deficit, then

shortages constrain total output, magnifying the impact, so that the return to reducing that

deficit can be very high indeed.

Banerjee (2004) says that the earliest electric power systems were distributed generation

(DG) systems intended to cater to the requirements of local areas. Subsequent technology

developments driven by economies of scale resulted in the development of large centralized

grids connecting up entire regions and countries. The design and operating philosophies of

power systems have emerged with a focus on centralized generation. During the last decade,

there has been renewed interest in DG. This paper reviews the different technological options

available for DG, their current status and evaluates them based on the cost of generation and

future potential. The relevance of these options for a developing country context is examined

using data for India.

Different definitions of DG have been proposed. Some have linked this to the size of the

plant, suggesting that DG should be from a few kW to sizes less than 10 or 50MW. This

provides a review of alternative definitions of DG and suggests that DG be defined as the



installation and operation of electric power generation units connected directly to the

distribution network or connected to the network on the customer site of the meter. DG is

also referred to as dispersed generation or embedded generation. DG options can be

classified based on the prime movers used—engines, turbines, fuel cells or based on the fuel

source as renewable or non-renewable. There are a large number of possible system

configurations.

Swain, Singh and Kumar (2004) ,describes there were many inhibitors to growth in power

sector but the main problem in the growth was Government Policy, which made it difficult

for a private player to enter. This further created the problem that Indian entrepreneurs didn’t

have enough knowledge and experience in developing power projects. A whole new system

was evolved where private players were invited to be an active participant. The system

demanded financial, political and other major requirement in roads and communication.

Some of the bold steps taken in the Act were moving generation and distribution out of

‘License Raj’, opening access to national grid and demolishing the ‘Single Buyer’ model.

The failure of the large structure and the changing global scenario has forced Government to

think of ways to revive this fundamental infrastructure sector. Two ways that government can

count on for future growth of this sector are “Small Power Plants” and “Clean Development

Mechanism”.

Soronow, Pierce & Wang(2003), introduces FEA's Power Sector Model as the next step in

derivatives pricing. Here the authors identified weather and marginal fuel prices as

independent variables driving load levels and power prices. This is grounded in the

understanding that, to a large extent, weather dictates load conditions, which, together with

the marginal fuel price, determines the power price. The second step is to conduct a detailed

empirical study of the nature and relationships among the various components under

analysis. The goal of the study is twofold: to understand the relationship between the

variables, as well as to determine the seasonal aspects inherent in each component. The

approach is capable of capturing the essential power price characteristics such as seasonality

in price and volatility, mean-reversion, price spikes, volatility clustering, and regional



correlations. The model is self-contained, and when fully calibrated, Monte Carlo simulation

provides the basis for valuing power contracts and generation assets directly.

Tongia (2003), describes that India’s power sector is undergoing significant reforms,

beginning in 1991, which are changing and diminishing the role of the government, which

functioned earlier as the near monopoly integrated utility. Because of significant financial

difficulties faced by the SEBs 1991 saw the enactment of legislation, the 1991 Electricity

(Supply) Act, which opened up the sector to private participation, primarily in generation.

The current thrust of reforms is on the distribution sector, reducing losses and increasing

efficiency. This might just be a precursor to privatization, but there is a goal to full

electrification by 2012. In the last few years, the T&D losses have stabilized somewhat, but

there is only limited interest of private players into the sector, especially new players. Those

who state that overall financial losses have increased after the reforms do not factor in the

increase in costs due to generator price increases regardless of reforms, even from

government generators and PSUs. Electricity Bill 2001 opens up the sector to private

participation with limited approval obligations. This sector is vital to India’s growth and

development. At the same time they have not sufficiently addressed structural changes for

grid operation and discipline (dispatch), such as based on load duration curves, or access and

penetration for the poor (especially how that affects financial performance). They are a step

in the right direction, ending years of Government control and mindset.



CHAPTER 3

POWER SECTOR IN INDIA

3.1. POWER SECTOR IN INDIA

The process of electrification commenced in India almost with the developed world, in the

1880s, with the establishment of a small hydroelectric power station in Darjeeling. However,

commercial production and distribution started in 1889, in Calcutta (now Kolkata). In the

year 1947, the country had a power generating capacity of 1,362 MW. Generation and

distribution of electrical power was carried out primarily by private utility companies such as

Calcutta Electric. Power was available only in a few urban centers; rural areas and villages

did not have electricity. After 1947, all new power generation, transmission and distribution

in the rural sector and the urban centers (which was not served by private utilities) came



under the purview of State and Central government agencies. State Electricity Boards (SEBs)

were formed in all the states.

Legal provisions to support and regulate the sector were put in place through the Indian

Electricity Act, 1910. Shortly after independence, a second Act - The Electricity (Supply)

Act, 1948 was formulated, paving the way for establishing Electricity Boards in the states of

the Union.

In 1960s and 70s, enormous impetus was given for the expansion of distribution of electricity

in rural areas. It was thought by policy makers that as the private players were small and did

not have required resources for the massive expansion drive, the production of power was

reserved for the public sector in the Industrial Policy Resolution of 1956. Since then, almost

all new investment in power generation, transmission and distribution has been made in the

public sector. Most of the private players were bought out by state electricity boards.

From the installed capacity of only 1,362mw in 1947, has increased to 97000 MW as on

March 2000 which has since crossed 100,000 MW mark India has become sixth largest

producer and consumer of electricity in the world equaling the capacities of UK and France

combined. The number of consumers connected to the Indian power grid exceeds is 75

million.

India's power system today with its extensive regional grids maturing in to an integrated

national grid, has millions of kilometers of T & D lines criss-crossing diverse topography of

the country.

However, the achievements of India's power sector growth looks phony on the face of huge

gaps in supply and demand on one side and antediluvian generation and distribution system

on the verge of collapse having plagued by inefficiencies, mismanagement, political

interference and corruption for decades, on the other. Indian power sector is at the cross road

today. A paradigm shift is in escapable- for better or may be for worse.

3.1.1. EMERGENCE OF REGIONAL POWER SYSTEMS



In order to optimally utilise the dispersed sources for power generation it was decided right at

the beginning of the 1960’s that the country would be divided into 5 regions and the planning

process would aim at achieving regional self sufficiency. The planning was so far based on a

region as a unit for planning and accordingly the power systems have been developed and

operated on regional basis. Today, strong integrated grids exist in all the five regions of the

country and the energy resources developed are widely utilised within the regional grids.

Presently, the Eastern & North-Eastern Regions are operating in parallel. With the proposed

inter-regional links being developed it is envisaged that it would be possible for power to

flow any where in the country with the concept of National Grid becoming a reality during

12th Plan Period.

3.1.2. GENERATION

India has installed power generation capacity of 1,41,079.84 MW as on January 31, 2008,

which is about 100 times the installed capacity of 1362 MW in the year 1947. Power

generation has showcased a robust growth rate which is steadily improving year after year.

There has been significant improvement in the growth in actual generation over the last few

years. As compared to annual growth rate of about 3.1% at the end of 9th Plan and initial

years of 10th Plan, the growth in generation during 2006-07 and 2007-08 was of the order of

7.3% and 6.33% respectively.

The electricity generation target for the year 2008-09 has been fixed at 744.344 BU

comprising of 631.270 BU thermal; 118.450 BU hydro; 19.000 BU nuclear; and 5.624 BU

import from Bhutan.

Abbreviation:

SHP = Small Hydro Project

BG = Biomas Gasfier

BP = Biomass Power



U & I = Urban & Industrial Water Power

RES = Renewable Sources.

Table.2: Gap Between Demand And Supply Of Power

Source: http://www.indexmundi.com/India/electricity_production.html

The table shows the average shortage of electricity in India every year to be approximately

between 7-8%.

3.1.2.1. STRATEGIES

The various strategies followed to achieve the goal in power sector are,

Power Generation Strategy with focus on low cost generation, optimization of capacity

utilization, controlling the input cost, optimization of fuel mix, Technology up gradation and

utilization of Nonconventional energy sources


http://www.indexmundi.com/India/electricity_production.html


Transmission Strategy with focus on development of National Grid including Interstate

connections, Technology up gradation & optimization of transmission cost.

Distribution strategy to achieve Distribution Reforms with focus on System up gradation,

loss reduction, theft control, consumer service orientation, quality power supply

commercialization, Decentralized distributed generation and supply for rural areas.

Regulation Strategy aimed at protecting Consumer interests and making the sector

commercially viable.

Financing Strategy is to generate resources for required growth of the power sector.

Conservation Strategy to optimize the utilization of electricity with focus on Demand Side

management, Load management and Technology up gradation to provide energy efficient

equipment gadgets.

Communication Strategy for political consensus with media support to enhance the general

public awareness.

To achieve the above objectives National Electric Policy has been designed. To fulfill the

objectives of the NEP, a capacity addition of 78,577 MW has been proposed for the 11th plan.

This capacity addition is expected to provide a growth of 9.5 % to the power sector.

The Tenth Plan for fiscal years 2002 to 2007 targeted a capacity addition of 41,110 MW,

which was subsequently revised to 30,641 MW; however at the end of the Tenth Plan period,

only 21,180 MW of capacity was added. This shows that India is not upto the mark in

achieving the targets of generation. Our planning is perfect but our path to achieve the target

is not perfect.

3.1.2.2. INVESTMENTS IN GENERATION



The total fund requirement for generation projects, during the Eleventh Plan period is

estimated at Rs. 4,108,960 million, with Rs. 2,020,670 million being required for the central

sector, Rs. 1,237,920 million being required for the state sector and Rs. 850,370 million

being required for the private sector. The total fund requirement includes the fund

requirement estimated at Rs. 1,891,950 million for start-up generation projects benefiting in

the Twelfth Plan.

3.1.3. TRANSMISSION

Transmission of electricity is defined as bulk transfer of power over a long distance at high

voltage, generally of 132 kV. In India bulk transmission has increased from 3708 ckm in

1950 to more than 256,000 ckm today.

The Government of India has an ambitious mission of ‘POWER FOR ALL BY 2012’. This

mission would require that our installed generation capacity should be at least 2, 00,000 MW

by 2012 from the present level of 1, 14,000 MW. To be able to reach this power to the entire

country an expansion of the regional transmission network and inter regional capacity to

transmit power would be essential. The latter is required because resources are unevenly

distributed in the country and power needs to be carried great distances to areas where load

centres exist.

Ability of the power system to safely withstand a contingency without generation

rescheduling or load-shedding was the main criteria for planning the transmission system.

However, due to various reasons such as spatial development of load in the network, non-

commissioning of load centre generating units originally planned and deficit in reactive

compensation, certain pockets in the power system could not safely operate even under

normal conditions. This had necessitated backing down of generation and operating at a

lower load generation balance in the past. Transmission planning has therefore moved away

from the earlier generation evacuation system planning to integrated system planning.

While the predominant technology for electricity transmission and distribution has been

Alternating Current (AC) technology, High Voltage Direct Current (HVDC) technology has



also been used for interconnection of all regional grids across the country and for bulk

transmission of power over long distances.

Certain provisions in the Electricity Act 2003 such as open access to the transmission and

distribution network, recognition of power trading as a distinct activity, the liberal definition

of a captive generating plant and provision for supply in rural areas are expected to introduce

and encourage competition in the electricity sector. It is expected that all the above measures

on the generation, transmission and distribution front would result in formation of a robust

electricity grid in the country.

3.1.3.1. GROWTH OF TRANSMISSION

Table.3: CUMLATIVE GROWTH IN TRANSMISSION SECTOR &

PROGRAMME FOR 11th PLAN



UnitAt the end of VIII Plan ie March 1997

At the end of IX Plan ie

March 2002

At the end of X Plan ie

March 2007

At the end of XI Plan ie

March 2012

TRANSMISSION LINES

VIII Plan IX Plan X Plan XI Plan765 kV ckm 409 971 1704 7132

HVDC +/- 500kV ckm 3138 3138 58728 11078

HVDC 200kV Monopole

ckm 0 162 162 162

400kV ckm 36142 49378 75772 125000230kV/220Kv ckm 79601 96993 114629 150000

Total Transmission

Lineckm 119290 150642 198089 293372

SUBSTATIONS VIII Plan IX Plan X Plan XI Plan

HVDC BTB MW 1500 2000 3000 3000

HVDC Bipole+Monopole

MW 1500 3200 5200 11200

Total-HVDC Terminal Capacity

MW 3000 5200 8200 14200

765kV MVA 0 0 2000 53000400Kv MVA 40865 60380 92942 145000

230/220Kv MVA 84177 116363 156497 230000Total-AC Subtation Capacity

MVA 125042 176743 251439 428000

Source: National Electricity Plan (vol-II) Transmission

3.1.3.2. TRANSMISSION NETWORK

Table.4: Details of Existing Lines and Sub-Stations Region

Details of Existing Lines and Sub-Stations Region

HVDC 400KV 220KV 132KV (MVA)

1 Northern Region



J&K - 300 687 - 1260

HP - 572 192 - -

Delhi - 397 - - 1575

Haryana - 1789 66 - 2025

Punjab - 1170 401 - 1130

Rajasthan - 791 1032 - -

UP 817 2933 870 - 630

Total NR 817 7952 3248 0 6620

2 Western Region

MP - 5791 - - 945

Maharashtra - 1127 - - NIL

Gujarat - 1195 852 - 630

Total WR - 8113 852 0 1575

3 Southern Region

AP - 2762 - - 3150

Karnataka - 965 - - NIL

Kerala - 260 156 - 630

Tamil Nadu - 1647 64 - 1575

Total SR - 5634 220 0 5355

4 Eastern Region

Bihar - 1057 82 - 1860

Orissa - 1034 - - 2520

West Bengal - 1287 872 333 2025



DVC - 344 - - 630

Total ER - 3722 952 333 7035

5 N.E.Region

Assam - 1978 171 79 1015

Maghalaya - - - 67 -

Nagaland - - 320 189 100

Manipur - - - 443 6.3

Mizoram - - - 178 -

Tripura - - - 147 5

Arunachal Pradesh - 333 - 42 -

Total NER - 2311 491 1145 1126

Total All India 817 27732 5763 1478 21711

Source: http://cercind.gov.in/powergrid.htm

According to this table about 2.5% of Indian villages still remain unelectrified. In addition to

state boards Power Grid Corporation of India Limited has a major role in transmission

Power Grid Corporation of India limited (POWERGRID) was incorporated on October 23,

1989 with an authorized share capital of Rs. 5,000 Crore as a public limited company, wholly

owned by the Government of India. POWERGRID started functioning on management basis

with effect from August, 1991 and it took over transmission assets from NTPC, NHPC,

NEEPCO and other Central/Joint Sector Organizations during 1992-93 in a phased manner.

In addition to this, it also took over the operation of existing Regional Load Dispatch Centers

from CEA, in a phased manner, which has been upgraded with State of-the-art Unified Load

Dispatch and Communication (ULDC) schemes. According to its mandate, the Corporation,


http://cercind.gov.in/powergrid.htm


apart from providing transmission system for evacuation of central sector power, is also

responsible for Establishment and Operation of Regional and National Power Grids to

facilitate transfer of power within and across the Regions with Reliability, Security and

Economy on sound commercial principles. Based on its performance POWERGRID was

recognized as a Mini-ratna company by the Government of India in October 1998.

POWERGRID, notified as the Central Transmission Utility of the country, is playing a major

role in Indian Power Sector and is also providing Open Access on its inter-State transmission

system.

3.1.4. FUTURE PLANS FOR POWER FOR ALL BY 2012

The country’s transmission perspective plan for eleventh plan focuses on the strengthening of

National Power Grid through addition of over 60,000 ckm of Transmission Network by

2012. Such an integrated grid shall carry 60% of the power generated in the country. The

existing inter-regional power transfer capacity is 17,000 MW, which is to be further enhanced

to 37,000 MW by 2012 through creation of “Transmission Super Highways”. Based on the

expected generation capacity addition in XI plan, an investment of about 75,000 Crore is

envisaged in Central Sector and Rs. 65,000 Crore is envisaged in the State Sector.

POWERGRID is working towards achieving its mission of “Establishment and Operation of

Regional and National Power Grids to facilitate transfer of power within and across the

regions with reliability, security and economy, on sound commercial principles".

The exploitable energy resources in our country are unevenly distributed, like Coal resources

are abundant in Bihar/Jharkhand, Orissa, West Bengal and Hydro Resources are mainly

concentrated in Northern and North-Eastern Regions. As a result, some regions do not have

adequate natural resources for setting power plants to meet their future requirements whereas

others have abundant natural resources. Demand for power continues to grow unabated. This

calls for optimal utilization of generating resources for sustainable development. Thus,

formation of National Power Grid is an effective tool to achieve this as various countries



have adopted the model of interconnecting power grid not only at national level but also at

international level.

Further, acquiring Right of Way (ROW) for constructing transmission lines is getting

increasingly difficult, especially in eco-sensitive areas like North-Eastern Region, Chicken

neck area, hilly areas in Jammu & Kashmir and Himachal Pradesh. At the same time, these

areas are also endowed with major hydro potential of the country. This necessitates creation

of “Transmission Super Highways”, so that in future, constraints in ROW do not cause

bottleneck in harnessing generating resources. Inter-connection of these highways from

different part of the country would ultimately lead to formation of a high capacity “National

Power Grid”.

Thus, developments in power sector emphasize the need for accelerated implementation of

National Power Grid on priority to enable scheduled/unscheduled exchange of power as well

as for providing open access to encourage competition in power market. Formation of such a

National Power Grid has been envisaged in a phased manner.

Initially, considering wide variations in electrical parameters in the regional grids, primarily

HVDC interconnections were established between the regions. This was completed in the

year 2002, thereby achieving inter-regional power transfer capacity of 5000 MW.

In the next phase, inter-regional connectivity is planned to be strengthened with hybrid

system consisting of high capacity EHV/UHV AC and HVDC links. Such a National Power

Grid is envisaged to disperse power not only from Mega sized generation projects but also to

enable transfer of bulk power from one part of the country to another in different operational

scenarios say, in varying climatic conditions across the country: Summer, Winter, Monsoon

etc. Commissioning of links under this phase has already begun with the commissioning of

2000 MW Talcher-II HVDC Bipole, Raipur – Rourkela 400kV D/C AC transmission line

having Series Compensation, augmentation of Gazuwaka HVDC (500MW) back to back link

and Tala transmission system. The inter-regional transfer capacity of 16,200 MW is available

as on date. Further strengthening of National Power Grid is envisaged through high capacity

AC EHV lines, 765 kV UHV AC lines/ HVDC lines. This phase is planned to be

implemented by 2012 when inter-regional power transfer capacity will be enhanced to about

37,700 MW by the end of XI Plan, depending upon planned growth of generation capacity.



3.1.5. DISTRIBUTION

The total installed generating capacity in the country is over 1, 35,000 MW and the total

number of consumers is over 144 million. A vast network of sub transmission in distribution

system has also come up for the utilization of power by the ultimate consumer.

However, due to lack of adequate investment on T&D works, the T&D losses have been

consistently on higher side, and reached to the level of 32.86% in the year 2000-01.The

reduction of these losses was essential to bring economic viability to the State Utilities.

As the T&D loss was not able to capture all the losses in the net work, concept of Aggregate

Technical and Commercial (AT&C) loss was introduced. AT&C loss captures technical as

well as commercial losses in the network and is a true indicator of total losses in the system.

High technical losses in the system are primarily due to inadequate investments over the

years for system improvement works, which has resulted in unplanned extensions of the

distribution lines, overloading of the system elements like transformers and conductors, and

lack of adequate reactive power support.

The commercial losses are mainly due to low metering efficiency, theft & pilferages. This

may be eliminated by improving metering efficiency, proper energy accounting & auditing

and improved billing & collection efficiency. Fixing of accountability of the personnel /

feeder managers may help considerably in reduction of AT&C loss.

With the initiative of the Government of India and of the States, the Accelerated Power

Development & Reform Programme (APDRP) was launched in 2001, for the strengthening

of Sub – Transmission and Distribution network and reduction in AT&C losses.

The main objective of the programme was to bring Aggregate Technical & Commercial

(AT&C) losses below 15% in five years in urban and in high-density areas. The programme,

along with other initiatives of the Government of India and of the States, has led to reduction

in the overall AT&C loss from 38.86% in 2001-02 to 34.54% in 2005-06. The commercial

loss of the State Power Utilities reduced significantly during this period from Rs. 29331

Crore to Rs. 19546 Crore. The loss as %age of turnover was reduced from 33% in 2000-01 to

16.60% in 2005-06.



The APDRP programme is being restructured by the Government of India, so that the desired

level of 15% AT&C loss could be achieved by the end of 11th plan.

Since incentive financing is proposed to be integrated with the existing investment program

to achieve commercial viability of SEBs / Utilities and link it to the reform process, the

original APDP was rechristened to Accelerated Power Development & Reforms Programme

(APDRP) during 2002-03 for 10th five year plan.

The objectives of APDRP are:

Improving financial viability of State Power Utilities

Reduction of AT & C losses

Improving customer satisfaction

Increasing reliability &quality of power supply

The scheme has two components as below:

a. Investment component – Government of India provides Additional Central

Assistance for strengthening and up gradation of sub-transmission and distribution

network. 25% of the project cost is provided as Additional central plan assistance in

form of Grant to the state utilities. To begin with the Govt. also provided loan to the

tune of 25% of the project cost. However in accordance with the recommendation of

12th finance commission, the loan component has been discontinued from FY 2005-

06. Now utilities have to arrange remaining 75% of the project cost from FIs like

PFC/REC or their resources. Special category state (like NE states, J&K, H.P,

Uttaranchal and Sikkim) are entitled for 90% assistance in form of grant and balance

10% fund.

b. Incentive component - An incentive equivalent to 50% of the actual cash loss

reduction by SEBs/ Utilities, is provided as grant. The year 2000-01 is the base year

for the calculation of loss reduction, in subsequent years. The cash losses are

calculated net of subsidy and receivables.



Funds Released:

Table.5: The details of the cash loss reduction and incentives released to various states

under APDRP (As on 31 March 2008)

Sl. No.

State Claim YearIncentive Amount Recommended for released to MoF

Amount Released by MoF

1 Andhra Pradesh 2002-03 265.11 265.11

2 Gujarat

2001-02 236.38 236.382002-03 148.08 148.082003-04 366.82 366.822004-05 288.03 288.03

3 Haryana 2001-02 105.49 105.49

4 Kerala2002-03 64.94 64.942004-05 82.99 82.99

5 Madhya Pradesh 2002-03 297.61 297.616 Maharashtra 2001-02 137.89 137.897 Rajasthan 2001-02 137.71 137.71

8 West Bengal

2002-03 73 732003-04 302.76 302.762004-05 5.88 5.882005-06 115.1 115.1

9 Punjab 2003-04 251.94 251.94Total 2879.63 2879.63

Source: http://www.powermin.nic.in/distribution/apdrp/projects/about_apdrp.htm

Schemes undertaken under APDRP are for renovation and modernization of sub-stations,

transmission lines & distribution transformers, augmentation of feeders & transformers,

feeder and consumer meters, high voltage distribution system (HVDS), consumer indexing,

SCADA, computerized billing etc.

1. Project Formulation

The State utilities to prepare for each of the high-density areas in order of priority, Detail

Project Reports (DPRs), based on the Technical Manual prepared by the Expert Committee

on Distribution, constituted by the Ministry of Power. These DPRs are to be vetted by NTPC

or PGCIL and put up to MOP for sanction. The different project components shall include:


http://www.powermin.nic.in/distribution/apdrp/projects/about_apdrp.htm


2. Energy meters on Feeders

Static meters on 11 kV out-going feeders and HT consumers have been contemplated.

Though the Chief Minister’s conference held in March 2001 decided to complete the

implementation of the feeder meters by December 2002, due to various reasons their

procurement and installation is yet to be completed. Since these feeders provide the metering

at the points of bulk deliveries in the distribution system, these are of paramount importance

for carrying out energy audits. Actions for procurement & installation of these are being

pursued vigorously. It is also necessary that the meters be provided with on-line

communication facility so that reliable, continuous data from all the substations are made

available without manual intervention.

3. Energy meters on DTs & Consumers and energy accounting

In many areas it has been planned to install suitable energy meters at distribution

transformers to facilitate detailed accounting of energy flows and these have to be planned

with suitable data transmission / collection facilities convenient to the utilities. Such meters

can also help in keeping track of the distribution transformer loading and thereby reduce their

outages apart from providing useful information on consumption patterns for demand side

management.

4. 11 kV Feeder as Profit Centre

Administrative measures are considered a powerful tool in our overall reform strategy

because of the tremendous benefits it can provide in a short time span and with least burden

to the SEB's. Recently, Andhra Pradesh has planned to entrust the distribution in selected 11

kV feeders and below levels to selected agencies with the requisite capabilities and have

invited tenders for such tasks. Karnataka has come out with the program of Grama Vidyut

Pradhinidhis for distribution in selected 11kv feeder areas. Success of such endeavors would

go a long way in finding a solution to the issues of the Indian power sector.

5. Technical Loss reduction measures

Measures for technical loss reduction include Installation of capacitors at all levels;

Re-conductoring of over loaded sections

Re-configuration of feeder lines & distribution transformers so as to reduce the length

of LT lines



Make the system less LT oriented by installation of smaller size energy efficient

distribution transformers so that each transformer supplies power to 10 to 15 households

only

Development of digital mapping of the entire assets of distribution system

Computerized load flow studies so that investments could be undertaken for long-term

strengthening of the distribution system.

6. Improving customer satisfaction

Customer satisfaction can be improved through providing better quality power in terms of

voltage fluctuations and reliability by reducing outages. These necessarily call for technical

intervention in firstly ensuring that the assets already created are maintained in proper

working condition and secondly through augmenting the system. Further, customer complaint

redressal mechanisms are to be made more responsive and proactive through building

transparent and reliable system with the help of computerization. The system should be

capable enough to meet the growing demand of information conscious customers.

7. Computerization

Creation of comprehensive, up to date consumer index and system databases on

computerized platforms are essential for creation of platforms for efficient commercial and

technical operation and management of any distribution system. The APDRP program has

laid emphasis on this basic need and actions are on in many areas for creation of such

databases. The energy accounting, billing and revenue management platforms are also

planned under the APDRP program for realizing the objectives outlined above and provide

better services to the customers. Implementations for these are under various stages in

different areas. In addition provisions of computerized automatic data acquisition at the

substations are planned. Based on the needs these would be hooked up to suitable

Supervisory Control and Data Acquisition systems.

8. Turnkey Implementation

The schemes proposed under APDRP have to be implemented in a very short time frame so

that benefits of the investments are perceived and confidence is generated in the FIs that

investments in the distribution sector can be bankable. Execution of the scheme adopting



conventional arrangement of ordering each of the components separately would be time

consuming and delay in arranging any one component could lead to overall time delays.

With the present day manpower position in most of the SEBs it would also not be practical to

coordinate the efforts of multiple agencies. By awarding the works under a turnkey contract

the scheduling of equipment would be the responsibility of the contractor and shall keep in

adhering to the time schedules. Hence turnkey packaging concept would be adopted for

execution of works preferably through empanelled turnkey contractors to expedite project

implementation schedule. Performance Guarantee Mechanism having adopted a turnkey

concept for execution it would be possible to bind the contractor in terms of

- Work completion schedule

- Overall costs

- Equipment performance.

A scheme of incentives for early completion and penalties for delays or failure to meet

performance guarantees can also be worked out in the turnkey contracts. If required

performance guarantee contract mechanisms will be introduced whereby the turnkey

companies would implement projects with guaranteed AT&C loss reduction with their own

investments. The returns are expected from the guaranteed incremental loss reduction.

Implementation of various activities / interventions will be prioritized to ensure quick

improvements in reliability and quality of power supply, reduction in AT&C losses, increase

in revenues and reduction in outages. The focus will be on 11 KV feeders, Distribution

transformers and the Consumers.

Therefore, the SEBs/State Utilities shall be urged to implement projects sanctioned under this

programme on turnkey basis through pre-qualified turnkey contractors selected on a

competitive basis to ensure quality and expeditious implementation.

9. Technical Specification & Standardization

The Expert Committee has also recommended standardization of technical specifications of

equipment used in the distribution sector. Specifications are being drawn up for energy

efficient and standardized equipments like electronic and static meters, transformers,



capacitors, conductors, insulators etc., with the assistance of the Indian Electrical and

Equipment Manufacturing Association, the Confederation of Indian Industry and the Bureau

of Indian Standards etc. Appropriate Expert Committees have been set up for this purpose.

NTPC and PGCIL have also prepared model bidding documents which are available for use

by the utilities.

10. Accreditation

Project formulation for up gradation of distribution network is a highly specialized job that

involves detailed energy balancing and network reconfiguration necessary for a high voltage

or low voltage distribution system. The SEBs may or may not have adequate skills in the area

and, therefore, may like to acquire the expertise and skills on an outsourcing basis. In order

to cover a large number of urban & industrial areas in the country, within the next 4 to 5

years, it is essential to make available a number of accredited specialized agencies for the

purposes of energy audit & accounting, project formulation, turnkey implementation, project

monitoring and project evaluation. SEBs / Utilities, if they so desire, would be able to out-

source the implementation to accredited agencies for quick formulation of quality projects

and their implementation. A Committee with members from NTPC, PGCIL, PFC, CEA,

SEBs /Utilities, credit rating agencies, FIs etc. will be constituted to accredit reputed agencies

for the above purpose. This would require engagement of agencies that are specialists in the

fields of work given below in assisting the states which lack internal capabilities or

manpower, and oversee the proposals & implementation by the states who are well equipped:

Engineering Agencies: To formulate and appraise the DPRs for augmentation of sub-

transmission and distribution system and oversee implementation including quality

checks.

Project Monitoring Agencies: To review the physical and financial progress of the

project and bring out concern areas to the notice of the MOP for immediate resolution

to avoid time and cost over - runs.

Turnkey Contractors: To undertake design, manufacture, supply, erection, testing &

commissioning and provide maintenance facilities and performance warranty for the

various components involved in the sub-transmission and distribution system.

Project Evaluators: To conduct concurrent and post execution evaluation of the

anticipated and actual benefits accrued consequent upon execution of the project.



Energy Accounting & Audit Agencies: The key success of distribution sector lies in

bridging the gap between the energy drawn from the system and the metered energy

supplied to the customers. The MOU with the States has a provision for conducting

energy audit on each feeder. But the results of the audit have shown that a fair amount

of energy accounted for as supplied is based on assessment. For success of the

program and improving revenue realization it is essential that all energy transactions

are adequately metered and properly accounted. Just as any business would have to

get its accounts audited it is necessary that this energy accounting is audited by

eminent third parties so that the programme can sustain on its own strength in the

coming years. For carrying out the detailed activities at field level agencies with

sufficient experience in the respective areas of work are proposed to be identified and

accredited. Any SEB can invite quotations from the accredited parties for the specific

work and immediately place an award thereby saving considerable time and effort.

This would facilitate in reduction of bidding time, bring in uniformity of terms of

reference and work content. For the other activities especially those involving HR

initiatives at SEB level and DSM and distributed generation concepts, discussions are

being held with international financing agencies to support the programme.

11. Application of Information Technology

Information technology and computer aided tools for revenue increase, outage reduction,

monitoring and control, play a vital role in distribution management. It is, therefore,

proposed to have a technology mission for customizing / development of cost effective and

relevant solutions for consumer and control point data communications, remote monitoring,

operation and control, etc. for the distribution network. Involvement of IT industries in this

effort is envisaged. IT applications will be used in such processes in the distribution sector to

ensure higher revenues as a result of segregation of T&D losses, and controlling commercial

losses, especially for metering, meter reading, billing, collection and outage reduction.

12. Management Information System (MIS)

Operational efficiency improvement and customer servicing also need to be addressed at

various levels in the organization. In this regard, an effective Management Information

System (MIS) is required to ensure effective flow of information to facilitate quick decision-



making at various levels of organization and to improve the operation and management of the

distribution system.

This is proposed to be achieved through computerization and networking. Management

Information System for the SEBs/ Utilities should provide relevant information at each level

of the organization in timely and accurate manner. The timeliness and accuracy of

information improves decision-making. For MIS, information flow is required from lower

level to higher levels with some information in real time and some in batch mode. For real

time information flow, networking within the organization is needed. In addition to this,

information management required for monitoring and decision-making will be different at

various levels in hierarchy. MIS should be able to take care of different needs at various

levels. Otherwise huge data generated from MIS will not be of any significant use. The

structure of MIS should be SEB specific because of difference in their organizational

structures and responsibilities at various levels across the organization.

A generalized framework of MIS is presented which may be tailored to suit the needs of a

specific SEB/utilities.

13. Capacity Building within SEBs/Utilities

Even though SEBs have expertise in different fields, strengthening of sub-transmission &

distribution network on a scientific basis using computer aided tools requires an integrated

knowledge. Most SEBs, during the regional meetings held in April and then later in June,

2001 expressed their inability to take up such work with their own manpower. It was

considered necessary to promote capacity building exercise in the SEBs/State Power Utilities

to enable SEB personnel to prepare detailed project reports for each of the districts/ circles

and implement the project using APDRP funds at a later stage. Capacity building exercise is

to cover:

Training the manpower

Energy audit & accounting studies

Making the SEB officials collect relevant data from each 11 KV feeder in the identified

circle.

Analysis of the data using computer tools to prepare feeder wise computer aided least

cost project report.



Supervision of implementation

Several training programmes were organized by the training institutions such as Power

Management Institute (NTPC), National Power Training Institute, PGCIL etc., and several

working level officers from the various SEBs benefited from such programmes. It is planned

to further strengthen our efforts in imparting quality training to bring about changes in

business perspective crucial to the success of our power reform programme.

It is proposed to provide extensive training to the staff of SEBs / Utilities at all levels to so as

enable them to develop bankable project reports covering techno-commercial activities for

each circle and manage electricity distribution with a commercial orientation. Capacity

building is envisaged as a continuous exercise to ensure that the latest developments are

internalized. Distribution reforms require a structural change in the existing set up of the

SEBs. In order to enable them to manage distribution on a profit centre approach and to

improve their performance on the basis of certain benchmarks, funds under APDRP will be

provided only to those State Govts. /SEBs which agree to certain precedent conditions

through an Agreement The SEBs / State Distribution Utilities will execute a SEB/Utility-

specific Memorandum of Agreement [MOA] with the Ministry of Power. The Ministry of

Power will also monitor implementation of the precedent conditions before releasing funds.

The efficiency gains on account of APDRP investments shall be intimated to the regulatory

commission to ensure that the benefits and reliefs are passed on to the customer by the

private utilities.



CHAPTER 4

SEGMENTS IN POWER GENERATION



SEGMENTS IN POWER GENERATION

4.1. THERMAL

Current installed capacity of Thermal Power (as of 12/2008) is 93392.64 MW which is

63.3% of total installed capacity.

Current installed base of coal based thermal power is 77458.88MW which comes to

53.3% of total installed base.

Current installed base of gas based thermal power is 14734.01MW which is 10.5% of

total installed base.

Current installed base of oil based thermal power is 1199.75 which is .09% of total

installed base.

Maharashtra is the largest producer of thermal power in the country.

Fig. 3: Comparison of Energy Intensity



Source: [email protected]

4.2. HYDRO POWER

India is blessed with a rich hydro power potential. In the exploitable potential terms, India

ranks fifth in the world. Less than 25% of the potential has been developed as of now. A large

hydro has four main advantages.

It is a source of green energy.

It has low variable cost.

It is grid friendly.

It can also can sub serve other purposes by irrigation, flood control, etc.

India has 3 major rivers: the Indus, the Brahmaputra, and the Ganga. It also has three major

river systems? Central Indian, west flowing rivers of south India, and east flowing rivers of

south India with a total of 48 river basins. The total potential from these river basins is

600TWh (Terawatt Hours) of electricity.


mailto:[email protected]


Hydroelectric projects can be classified on the basis of purpose, hydraulic features, capacity,

head, constructional features, mode of operation, etc. The main types are

ROR (Run of River) There are not large reservoirs; a part of water flow is diverted to

the plant which is adjacent to the river. After generation the flow is diverted back to the

main flow through the tail race. This type of hydro plants requires a diversion dam and

has unregulated water flow.

Dam Storage In these types of hydro plants, large reservoirs are created by the

construction a sizeable dam across the river and the plants is situated at the toe of the

dam. Here, water could be regulated to generate electricity depending upon the demand

Pumped Storage These types of plants have two reservoirs, one at the upstream of the

power plant and one at the downstream. When there is low peak demand, the water from

the reservoir situated downstream is pumped0020back to the upstream reservoir.

As of today, the total identified hydro potential is 1 48 701 MW (mega watt). According to

the list of hydro electric projects in the country, a total of 29 572 MW,19.9% of the total? Has

been harnessed and 13 286 MW is under construction. A total of 3 660 MW of pumped

storage schemes have also been developed.

Various initiatives for accelerated development have been taken up by the central government

to harness the hydro potential in India. Some of these are

Hydro Power Policy (1998)

50 000 MW initiative

Preparation of viable models for private sector participation

Ranking of projects

R&M up gradation and life extension programmes

Facilitation for trading and co-operation with other countries

Execution of projects with interstate aspects by Central Public Sector Units

Fig.4: State wise Hydro-power generation



Source: http://www.marketresearch.com/product/display.asp?productid=1695991

4.3. NUCLEAR POWER GENERATION

In India, out of total installed capacity of 126993.97 MW (as on 31 August 2006); the share

of nuclear power is 3% at 3900 MW. From the electricity generation point of view, nuclear

power plants contributed 17 238.89 GWh out of total electricity generation of 6 17 510.44

GWh during April 2005 - March 2006, amounting to 2.79% of total generation. However,

with exponential growth in energy demand coupled with a finite availability of coal, oil, and

gas; there is a renewed emphasis on nuclear energy. Moreover, nuclear energy is considered

to be an environmentally benign source of energy.

Department of Atomic Energy is carrying out nuclear energy programme in India. The Indian

Nuclear Power Programme has the following three stages.


http://www.dae.gov.in/

http://www.world-nuclear.org/uiabs96/vera.htm

http://www.cea.nic.in/god/opm/Monthly_Generation_Report/18col_06_03.pdf

http://www.marketresearch.com/product/display.asp?SID=93839449-444172474-535718115&productid=1695991&SearchReturnURL=&StatURL=&CatReturnURL=


The first stage, already commercial now, comprised setting up of PHWRs (pressurised

heavy water reactors) and associated fuel cycle facilities. PHWRs use natural uranium as

fuel and heavy water as moderator and coolant. The design, construction, and operation

of these reactors is undertaken by public sector undertaking the NPCIL (Nuclear Power

Corporation of India Ltd). The company operates 16 reactors (2 Boiling Water Reactors

and 14 PHWRs) with a total capacity of 3900 MWe.

In the second stage, it was envisaged to set up FBRs (fast breeder reactors) along with

reprocessing plants and plutonium-based fuel fabrication plants. Plutonium is produced

by irradiation of Uranium-238. The Fast Breeder Programme is in the technology

demonstration stage. Under this stage, the IGCAR (Indira Gandhi Centre for Atomic

Research) has completed design of a 500 MWe PFBR (prototype fast breeder reactor)

being implemented by BHAVINI (Bharatiya Nabhikiya Vidyut Nigam).

The third stage of the Indian Nuclear Power Programme is based on the thorium-

uranium-233 cycle. Uranium-233 is obtained by irradiation of thorium. Presently this

stage is in technology development phase. The ongoing development of 300 MWe

AHWR (advanced heavy water reactor) at BARC (Bhabha Atomic Research Centre)

concerns thorium utilization and its demonstration.

4.4. SOLAR

India is endowed with rich solar energy resource. The average intensity of solar radiation

received on India is 200 MW/km square (megawatt per kilometer square). With a

geographical area of 3.287 million km square, this amounts to 657.4 million MW. However,

87.5% of the land is used for agriculture, forests, fallow lands, etc., 6.7% for housing,

industry, etc., and 5.8% is either barren, snow bound, or generally inhabitable. Thus, only

12.5% of the land area amounting to 0.413 million km square can, in theory, be used for solar

energy installations. Even if 10% of this area can be used, the available solar energy would

be 8 million MW, which is equivalent to 5 909 mtoe (million tons of oil equivalent) per year.


http://en.wikipedia.org/wiki/Advanced_Heavy_Water_Reactor

http://en.wikipedia.org/wiki/Uranium-233

http://en.wikipedia.org/wiki/Thorium

http://www.igcar.ernet.in/

http://www.igcar.ernet.in/

http://education.jlab.org/itselemental/ele092.html

http://en.wikipedia.org/wiki/Plutonium

http://en.wikipedia.org/wiki/Nuclear_reprocessing

http://en.wikipedia.org/wiki/Fast_breeder_nuclear_reactor

http://en.wikipedia.org/wiki/Boiling_Water_Reactor

http://www.nuc.berkeley.edu/thyd/ne161/rahmed/coolants.html

http://en.wikipedia.org/wiki/Neutron_moderator

http://en.wikipedia.org/wiki/Heavy_water

http://en.wikipedia.org/wiki/Natural_uranium

http://en.wikipedia.org/wiki/Pressurised_Heavy_Water_Reactor

http://en.wikipedia.org/wiki/Pressurised_Heavy_Water_Reactor


However, solar energy is a dilute source. The energy collected by 1 m square of a solar

collector in a day is approximately equal to that released by burning 1 kg of coal or 1/2 litre

of kerosene. Thus, large areas are needed for collection. Besides, the efficiency of conversion

of solar energy to useful energy is low. Therefore, the energy actually available would be

order of magnitude lower than the aforementioned estimates. Nonetheless, it is obvious that

solar energy can be a good source of meeting energy demands.

On the applications side, the range of solar energy is very large. While at the high end there

are megawatt level solar thermal power plants, at the lower end there are domestic appliances

such as solar cooker, solar water heater, and PV lanterns. Then, in between, there are

applications such as industrial process heat, desalination, refrigeration and air-conditioning,

drying, large scale cooking, water pumping, domestic power systems, and passive solar

architecture. Solar energy can be harnessed to supply thermal as well as electrical energy.

Those technologies that use solar energy resource to generate energy are known as solar

energy technologies.

Solar energy technologies consists of

Solar thermal technologies, which utilize sun's thermal energy and

Solar photovoltaic technology, which convert solar energy directly in to electricity.

Solar energy resource: Since the accurate information about solar energy resource at a

specific location is crucial for designing appropriate solar system. Solar energy resource

assessment becomes an essential activity of any solar energy programme.

4.5. WIND

The sun’s energy falling on the earth produces large-scale motions of the atmosphere causing

winds, which are also influenced by small scale flows caused by local conditions such as

nature of terrain, buildings, water bodies, etc. Wind energy is extracted by turbines to convert

the energy into electricity.

A small-scale and large-scale wind industry exists globally. The small-scale wind industry

caters for urban settings where a wind farm is not feasible and also where there is a need for


http://swera.unep.net/swera/index.php

http://www.eere.energy.gov/RE/solar.html


household electricity generation. The large-scale industry is directed towards contributing to

countrywide energy supply.

4.5.1. WIND RESOURCE IN INDIA

The wind resource assessment in India estimates the total wind potential to be around 45 000

MW (mega watt). This potential is distributed mainly in the states of Tamil Nadu, Andhra

Pradesh, Karnataka, Gujarat, Maharashtra, and Rajasthan. The technical potential that is

based on the availability of infrastructure, for example the availability of grid, is estimated to

be around 13 000 MW. In India, the wind resources fall in the low wind regime, the wind

power density being in the range of 250 -450 W/m2. It may be noted that this potential

estimation is based on certain assumptions. With ongoing resource assessment efforts,

extension of grid, improvement in the wind turbine technology, and sophisticated techniques

for the wind farm designing, the gross as well as the technical potential would increase in the

future.

4.5.2. STATUS

Wind power has become one of the prominent power generation technologies amongst the

renewable energy technologies.

4.5.3. TECHNOLOGY TRENDS

Use of wind energy started long ago when it was used for grinding. The commercial use of

wind energy for electrical power generation started in 1970s. Horizontal axis wind turbines

are most commonly used for power generation, although some vertical axis wind turbine

designs has been developed and tested. The vertical axis turbines have structural as well as

aerodynamic limitations and, hence, are not commercially used.

4.5.4. WIND POWER IN INDIA

Wind turbines offered in India range from 250 kW to 2 MW capacities. As of 31 March 2006,

the total installed capacity in the country was 5340 MW, which is 46% of the total capacity

of renewable resources based power generation. There are 7 manufacturers of wind turbine

generators in India.


http://www.windpowerindia.com/manuf.html

http://mnes.nic.in/frame.htm?majorprog.htm

http://en.wikipedia.org/wiki/Aerodynamics

http://www.awea.org/faq/vawt.html

http://www1.eere.energy.gov/windandhydro/wind_how.html

http://www.nrel.gov/docs/legosti/fy97/22223.pdf

http://www.windpowerindia.com/statest.html

http://mnes.nic.in/frame.htm?majorprog.htm

http://www.cwet.tn.nic.in/


4.6. SMALL HYDRO

The word hydro comes from a Greek word meaning water. The energy from water has been

harnessed to produce electricity since long. It is the first renewable energy source to be

tapped essentially to produce electricity

Hydro power currently suffices one fifth of the global electricity supply, also improving the

electrical system reliability and stability throughout the world. It also substantially avoids the

green house gas emissions, thus complimenting the measures taken towards the climate

change issues.

Hydro projects below a specified capacity are known as small hydro. The definition of small

hydro differs from country to country, depending on the resources available and the prevalent

national perspective. The small hydro atlas shows that the largest of the projects (30 MW) is

in US and Canada. Small hydro power has emerged as one of the least cost options of

harnessing green energy amongst all the renewable energy technologies.

According to the power generated, small hydro power is classified into small, mini/micro

and Mico hydro.

In India, it is being classified as follows.

Small hydro - 2 MW - 30 MW

Mini - 100 kW - 2 MW

Micro - 10 kW - 100 kW

Mico hydro - 1 kW - 10 kW


http://en.wikipedia.org/wiki/Electric_power

http://en.wikipedia.org/wiki/Green_energy

http://www.small-hydro.com/index.cfm?fuseaction=welcome.home

http://en.wikipedia.org/wiki/Small_hydro

http://en.wikipedia.org/wiki/Climate_change

http://en.wikipedia.org/wiki/Climate_change

http://en.wikipedia.org/wiki/Greenhouse_gas

http://en.wikipedia.org/wiki/Renewable_energy

http://en.wikipedia.org/wiki/Hydro


CHAPTER 5

REFORMS IN POWER SECTOR

REFORMS IN THE POWER SECTOR

5.1.1. PRE REFORM STAGE

Confronted with unprecedented economic crisis in 1991, Government of India embarked

upon a massive cleanup exercise encompassing all policies having financial involvement of

Governments- both at the level of Union and States.



Since after Electricity (supply) Act 1948, the power sector was mainly under the government

control which owned 95 % of distribution and around 98% of generation through states' and

central government utilities, the power sector was chiefly funded by support from

government budgets in the form of long term, concessional interest loans. These utilities were

made to carry forward the political agenda of the ruling parties of the day and the cross-

subsidization i.e. charging industrial and commercial consumers above the cost of supply and

to charge agricultural and domestic consumers below cost of supply was an integral part of

the functioning of the utilities.

Table.6: POWER SECTOR REFORMS

YEAR MAJOR DEVELOPMENTS1991 The Electricity Laws (Amendment) Act, 1991--Notification. Amends the

Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 byPrivate Sector allowed to establish generation projects of all types

(except nuclear)100% foreign investment & ownership allowed New pricing structure for sales to SEBs.5 Year Tax holiday; import duties slashed on power projects

1992 Intensive wooing of foreign investors in US, Europe & Japan1992-97 8 projects given "fast-track" status.

Sovereign guarantees from Central Government.Seven reached financial closureDabhol (Enron), Bhadravati (Ispat), Jegurupadu (GVK),

Vishakapatnam (Hinduja), Ib Valley (AES), Neyveli (CMS),Mangalore (Cogentrix)

1995-96 World Bank Reform Model - First Test Case Orissa Orissa Electricity Reform Act passed Establishment of Orissa Electricity Regulatory Commission SEB unbundled into Orissa Power Generating Company (OPGC), Orissa Hydel Power Corporation (OHPC) and Grid Corporation of Orissa (GRIDCO) Distribution privatized

1996 Chief Ministers Conference: Common Minimum Action Plan for Power: Recommend policy to create CERC and SERCs Licensing, planning and other related functions to be delegated to SERCs. Appeals against orders of SERCs to be in respective High Courts SERC to determine retail tariffs, including wheeling charges etc., which will ensure a minimum overall 3% rate of return. Cross -subsidization between categories of consumers may be allowed by SERCs, but no sector to pay less than 50% of the average cost of supply ( cost of generation plus transmission and distribution). Tariffs for agricultural sector not to be less than Rs.0.50 Kwh and to be



brought to 50% of the average costing not more than three years. Recommendations of SERCs to be mandatory, but financial implications any deviations made by State/UT Government, to be provide for the explicitly in the State budget. Fuel Adjustment Charges (FCA) to be automatically incorporated in the tariff. Package of incentives and disincentives to encourage and facilitate the implementation of tariff rationalization by the States. States to allow maximum possible autonomy to the SEBs, which are to be restructured and corporatized and run on commercial basis. SEBs to professionalize their technical inventory manpower and project management practices.

1997 CEA Clearance exempted for projects under 1000MW but State Government environment clearance required up to 250-500 MW Liquid fuel policy -- naphtha allocations to IPPs

1998 Mega-Power Policy: special incentives for the construction and operation of hydro-electric power plants of at least 500 MW and thermal plants of at least 1,000 MW.- The Electricity Laws (Amendment) Act, 1998 and Electricity Regulatory Commissions Ordinance -- Notification.Creation of Central Transmission UtilitySTUs to be set up with government companiesEstablishment of CERC and SERCsRationalization of electricity tariffs,Policies regarding subsidiesPromotion of efficient and environmentally benign policies

- Power Grid notified as Central Transmission Utility- Haryana Electricity Reforms Act:HSEB unbundled into Haryana Vidyut Prasaran Nigam Ltd., a Trans

Co. (HVPNL) and Haryana Power Corporation Ltd.Creation of HERCTwo Government owned distribution companies viz. Uttar Haryana

Bijli Vitaran Nigam Ltd. (UHBVNL) and Dakshin Haryana Bijli Vitaran Nigam (DHBVNL) have been established. DFID's technical co-operation grant of 15 million pounds available

for reforms.1999 Andhra Pradesh Electricity Reforms Act

APSEB unbundled into Andhra Pradesh Generation Company Ltd.(APGENCO) and Andhra Pradesh Transmission Company Ltd.

(APTRANSCO for transmission & distribution)Creation of APERCOther Developments:World Bank loan of US $ 210 million under the APLDFID's 28 million pounds as technical co-operation grant.CIDA technical assistance of Canadian $ 4 million.

- Karnataka Electricity Reforms ActKEB and KPCL transformed into new companies: Karnataka Power

Transmission Corporation Ltd. (KPTCL) and Visvesvaraya Vidyut Nigama Ltd., a GENCO, (VVNL)



Creation of KERCOther Developments:KPTCL has carved out five Regional Business Centers (RBC) for five

identified zones.2000 Power Ministers' Conference and Electricity Bill 2000 (draft):

Functional disaggregation of generation, transmission and distribution with a view to creating independent profit centres and accountability;Re organization and restructuring of the State Electricity Boards

in accordance with the model, phasing and sequencing to be determined by the respective State GovernmentsStates to determine the extent, nature and pace of privatization.

(public sector entities may continue if the States find them sustainable);Transmission to be separated as an independent function for creation

of transmission highways that would enable viable public and private investments;Amendments to the Indian Electricity Act, 1910 made in 1998 for

facilitating private investment in transmission have been broadly retained except that the private transmission companies would be regulated by the Regulatory Commissions and Transmission Centers inst under the direction, supervision and control of the Central/State Transmission Utilities;Present entitlements of States to cheaper power from existing

generating stations to remain undisturbed;Provision of compulsory metering for enhancing accountability and

viability;Central and State Electricity Regulatory Commissions to continue

broadly on the lines of the Electricity Regulatory Commissions Act, 1998;State Regulatory Commissions enjoined to recognize in their

functioning the need for equitable supply of electricity to rural areas and to weaker sections;Stringent provisions to minimize theft and misuse.

Source: www.cea.nic.in/ power _sec_reports/general_review/0405/index.pdf

5.1.2. ELECTRICITY ACT 2003

An Act to consolidate the laws relating to generation, transmission, distribution, trading and

use of electricity and generally for taking measures conducive to development of electricity

industry, promoting competition therein, protecting interest of consumers and supply of

electricity to all areas, rationalisation of electricity tariff, ensuring transparent policies

regarding subsidies, promotion of efficient and environmentally benign policies constitution

of Central Electricity Authority, Regulatory Commissions and establishment of Appellate


http://www.cea.nic.in/power_sec_reports/general_review/0405/index.pdf


Tribunal and for matters connected therewith or incidental thereto.

5.1.2.1. GENERATION:

Any Company, association or body of individuals (even unincorporated) can generate

electricity without requirement of techno-economic clearance of CEA, or approval of

State Government or regulator, except in case of hydropower station for which written

consent of Central Electricity Authority is required.

A Generating Company can supply electricity directly to more than one consumer and is

vested with the duty to establish, operate and maintain sub-stations, tie lines etc.

Any entity, (company, co-operative society or association of persons) can establish a

Captive Generation Plant (CGP) primarily for its own use without any entry barriers.

Open access is to be provided to all CGPs. No cross-subsidy surcharge would be levied

on the persons who have established CGP for carrying electricity to destination of his

own use.

5.1.2.2. RURAL ELCTRIFICATION/GENERATION/DISTRIBUTION

Government of India will have to formulate a National Policy after consulting State

Governments & CEA, to govern (i) rural electrification and local distribution through

local bodies5, and (ii) rural off-grid supply including those based on

renewable/nonconventional energy resources.

No license is required for generating or distributing in rural areas notified by the State

Govt.

5.1.2.3. LICENSING

Trading has been recognized as a separate licensed activity along with transmission and

distribution. However, a license is not required in respect of (i) trading by a distribution

licensee, (ii) transmission, distribution or trading by any Govt., as the Govt. would be

deemed a licensee.



Electricity Regulatory Commission (ERC), on the recommendation of Government, in

accordance with the national electricity policy and public interest can exempt any of the

local bodies6 from requiring license.

5.1.2.4. TRADING AND CAPTIVE GENERATION

Trading, i.e., purchase of electricity for resale, is a separate licensed activity, except for

distribution licensees who do not require a separate trading licence. Traders can enter into

direct contracts with the consumers and determine its terms and conditions (including

tariff).

The Appropriate Commission may specify

The entry barriers for traders – technical requirements, capital adequacy

requirement, and credit-worthiness;

Duties re. supply and trading in electricity to be discharged by a trader; and

Fix trading margin in intra-state trading if considered necessary.

ERCs have to develop trading market and have to be guided by National Tariff Policy.

5.1.2.5. OPEN ACCESS

Open access means non-discriminatory use of transmission lines, distribution system and

associated facilities by any licensee/consumer/Genco in accordance with ERC

regulations.

The licensees, consumers and Gencos have to pay transmission/wheeling charges for

open access. Consumers has to also pay a surcharge (to be utilized to meet cross subsidy)

determined by ERC, for open access.

ERC may order any licensee owning intervening transmission facilities to provide use of

facilities to any other licensee, to the extent of surplus capacity.

A State Transmission Utility is obliged to provide non-discriminatory open access to its

transmission system for use by a licensee or Genco forthwith, or by any consumer once

distribution level open access has been provided.



There is no statutory time limit for introduction of open access. ERC has to determine by

June 10, 2004 the phases and conditions, subject to which open access would be

introduced.

5.1.2.6. DISTRIBUTION

The distribution licensee has a mandatory duty to supply on request of consumer in a

time bound manner if the consumer agrees to pay the applicable tariff. ERC is

empowered to suspend or revoke license of a Discom for failure to maintain

Uninterrupted supply. Distribution licensee is empowered to recover

charges/expenses/security and disconnect supply for non-payment of dues.

Discoms can enter into direct contracts with consumers.

Discoms can engage in other businesses but have to share revenue to reduce wheeling

charges, and maintains separate accounts for the same.

ERCs may grant more than one distribution licenses can be issued in a given area,

permitting them to supply electricity through their own distribution system. To get a

subsequent distribution license any person will have to comply with additional

requirements prescribed by GoI regarding capital adequacy, creditworthiness, or Code of

Conduct etc.. If an applicant meets such requirements, he shall not be denied grant of the

license.

ERCs may permit by regulations a consumer/class to receive supply of electricity from

anyone other than the distribution licensee of the area of supply – against payment of

wheeling charge & surcharge in lieu of cross subsidy.

Distribution licensee is free to undertake distribution for a specified area within his area

of supply without need for a separate license. Provided that the distribution licensee shall

remain liable for the supply.

5.1.2.7. TRANSMISSION

To secure non-discriminatory open access, transmission has been segregated as a wires

function without any trading (buying and selling). Central transmission utility (CTU) and

all State transmission utilities (STUs) are deemed licensee.



CTU and STUs functions are (i) Transmission; (ii) planning & co-ordination of

transmission system; (iii) development of efficient and economical transmission lines

from generating stations to load centers; (iv) providing non-discriminatory open access to

the system.

RLDCs and SLDCs are empowered to issue directions, and exercise supervision &

control to ensure stability, efficiency & economy of grid operation in the region and the

State respectively. Licensees, generating companies and other persons connected with

operation of power system shall comply. SLDC shall ensure compliance with RLDC

directions.

Pending creation of separate RLDCs & SLDCs, the CTU and the STU shall perform the

role.

5.1.2.8. TARIFF

Government has been distanced from determination of tariff. This power has been vested

in the CERC/SERC. In determination of tariff CERC/SERC shall be guided by factors

including National Electricity Policy, tariff policy (formulated by Central Government),

CERC’s principles and methodologies for setting tariff and principles rewarding

efficiency and multiyear tariff.

In case tariff is determined through transparent bidding as per Government of India

guidelines, the same shall be adopted by the ERCs.

To promote competition among distribution licensees, where there are 2 or more

distribution licensees supplying in an area, the ERC may fix only maximum ceiling of

tariff for retail sale.

The PPAs/BSAs entered into before 10th June, 2003 have not been explicitly saved or

granted a protection from regulatory intervention.

5.1.2.9. REGULATORY COMMISSIONS

It is mandatory to establish SERCs within 6 months from 10th June, 2003. Joint

Commission can be constituted for two or more States or Union territories or both by

mutual agreement.

The new functions to be performed by CERC/ SERC include specifying Grid Code,

Supply Code (only SERC), levy fees, fix trading margins in interstate trading.



In exercise of their functions, ERCs shall be guided by – National Electricity Policy,

National Electricity Plan & Tariff Policy; directions of GoI/State Government

concerned, in matters of policy involving public interest – where such Government’s

decision shall be final as to whether the directions relates to a policy involving public

interest. There is no express provision enabling ERCs to depart from such directions.

Provision for separate ERC funds (not consolidated funds) for finance of ERC

expenditures.

5.1.2.10. POLICY ISSUES

Central Government shall prepare, publish and revise National Electricity Policy and

Tariff policy in consultation with State Governments and CEA9.

The implementation of the Act is largely dependent on the nature and scope of the diverse

policy instruments to be issued by Government, and institutions like Special Courts,

Appellate Electricity Tribunal, NLDC, RLDC, SLDC, SERCs and SEB successors to be

constituted by Government’s. It is noteworthy that these instruments will have a bearing

are:-

Role and functioning of ERCs,

Role and functioning of CEA,

Market development,

Governance of the sector – regulation, grid operations, safety issues, and

Enforcement.

5.1.2.11. CONSUMER INTERESTS

Creation of a Consumer redressal forum (CRF) by Distribution licensee in a time bound

manner. The consumers aggrieved from CRF can approach to an ‘ombudsman’10.

Distribution licensee has to supply electricity within 1 month from the date of request for

supply, except where capital works are required for connectivity. Failure of distribution

licensee to supply within said time period would attract penalty.

5.1.2.12. ENFORCEMENTS



Suitable provisions for provisional assessments and recovery of compensatory fines may

be able to address a long-standing vacuum in law.

Special Courts are to be established by Government’s for speedy disposal of cases

relating to theft of electricity.

The scope of offences has been expanded and enhanced punishments have been

prescribed for subsequent or continuing offences.

Stronger powers (accompanied with better safeguards) have been provided for

conducting inspections/search/seizure.

5.1.2.13. DISPUTE RESOLUTION

The appeal against all orders of ERC/adjudication officer would lie to an expert Appellate

Tribunal (an expert body), which shall dispose appeals within prescribed time.

Appeal from appellate tribunal lies to Supreme Court. The appeal to Supreme Court is

limited to substantial question of law.

5.1.3. ELECTRICITY (Amendment) ACT, 2007.

The Electricity (Amendment) Act, 2007, amending certain provisions of the Electricity Act,

2003, has been enacted on 29th May, 2007 and brought into force w.e.f. 15.06.2007. The

main features of the amendment Act are: -

Central Government, jointly with State Governments, to endeavor to provide access to

electricity to all areas including villages and hamlets through rural electricity

infrastructure and electrification of households.

No License required for sale from captive units.

Deletions of the provisions for elimination of cross subsidies. The provisions for

reduction of cross subsidies would continue.

Definition of theft expanded to cover use of tampered meters and use for unauthorized

purpose. Theft made explicitly cognizable and non-bail able.

5.1.3.1. DEMAND SIDE MANAGEMENT



Demand-side management is used to describe the actions of a utility, beyond the customer's

meter, with the objective of altering the end-use of electricity - whether it be to increase

demand, decrease it, shift it between high and low peak periods, or manage it when there are

intermittent load demands - in the overall interests of reducing utility costs. In other words

DSM is the implementation of those measures that help the customers to use electricity more

efficiency and it doing so reduce the customers to use the utility costs. DSM can be achieved

through.

Improving the efficiency of various end-uses through better housekeeping correcting

energy leakages, system conversion losses, etc ;

Developing and promoting energy efficient technologies, and

Demand management through adopting soft options like higher prices during peak hours,

concessional rates during off-peak hours seasonal tariffs, interruptible tariffs, etc.

DSM, in a wider definition, also includes options such as renewable energy systems,

combined heat and power systems, independent power purchase, etc, that utility to meet the

customer's demand at the lowest possible cost. Often the terms energy efficiency and DSM

are used interchangeably. However, it is important to point out that DSM explicitly refers to

all those activities that involve deliberate intervention by the utility in the marketplace so as

to alter the consumer's load profile. Energy efficiency issued in an all encompassing sense

and includes any activity that would directly or indirectly lead to an increase in energy

efficiency. To make this distinction precise, a program that encourages customers to install

energy efficient lighting systems through a rebate program would fall under DSM. On the

other hand, customer purchases of energy efficient lighting as a reaction to the perceived

need for conservation is not DSM but energy efficiency gains.

There has been growing recognition of the importance of energy efficiency in India's

electricity sectors. The Ministry of Power (MoP) is the nodal agency for energy conservation

in the country. The Bureau of Energy Efficiency (BEE), an autonomous body under the MoP,

was set up in 1989 to coordinate initiatives and activities on energy conservation. Several

state electricity boards( SEBs) have also set up Energy Conservation Cells, some of which

have been assisting industries in conducting energy audits. Several reports have been

attempted to estimate the potential for energy conservation in various consuming sectors and

have also identified various Energy Efficiency technologies (EETs) for important end-uses.



The National Energy Efficiency Program (NEEP) of the Government of India(GOI) has

targeted savings of about 5000 MW to be realized by the end of the Eighth plan through both

demand (2750 MW) and supply side (2250 MW) efficiency improvements. In terms of

Government policies, there are special equipment in the first year, subsidies for energy

audits, reduced customs duty for selected control equipment for managing energy use, and so

on.

5.1.3.2. Environmental Reform in the Electricity Sector:

Enhanced economic activity and population growth have led to increasing energy demand

that in turn has spurred electricity generation. But large-scale electricity generation and

distribution have adverse environmental impacts, varying by the technologies employed and

their locations. These need to be addressed so that energy services can be enhanced in

harmony with the environment, within our ecological footprints. Due to the “externalities” of

electricity generation, that is, the negative impacts not directly affecting or being restricted to

those involved, the costs of impact mitigation are typically not included in electricity prices.

Consideration for the environment has therefore to be forced into the reckoning, or preferably

integrated into the system, hence the importance of environment policy in the context of the

power sector.

Focusing on environmental issues and policies applicable to the power sector in China and

India. These countries generate 68% of the electricity generated in developing Asia, but with

a total population of about 2.4 billion, have large unmet needs.

In approaching the problem of environmental protection in the power sector in rapidly

developing country, our analytical framework consists of identification of those state

environmental policies and regulations that pertain to the power sector, both directly and

indirectly, assessment of the barriers encountered, and finally recommendations of likely

solutions to circumvent these problems.

Let us consider the impacts of electricity generation on the environment. The focus is on to

list the national environmental policies that affect these impacts, beginning with general

direction, proceeding to specific rules and standards and then to alternatives to conventional

electricity generation. This leads to the problems that beset effective policy implementation.



CHAPTER 6

IMPACT OF POWER SECTOR



6.1. POWER SECTOR IMPACTS ON THE ENVIRONMENT

The need for electricity – for productive purposes and for extending home electrification –

far outstrips supply in India. In 2004, Indian utilities generated 587 TWh from 118.4 GW,

with a shortage of about 43 TWh (CEA-GoI, 2005). Hence, while demand side management

(DSM) and efficiency improvement can reduce the demand-supply gap, increased generation

– through more power plants and/or increased utilization of existing capacity – is essential.

Electricity generation has several impacts on the environment, depending on the choice of

technologies. While the evaluation of specific power plants would necessitate the assessment

of site and plant-specific issues, in general, one can consider source-specific local, regional,

and global impacts.

6.1.1. LOCAL IMPACTS

Large power sources can affect their surroundings through impacts such as air pollution,

submergence of land and waste accumulation, excessive resource use and disruption of

human activity.

The impacts of coal-based thermal plants are particularly important in a study of India, as

these plants currently provide the largest generating capacity in India, and about 80% of the

actual generation. Electricity generation consumed 67% of India’s coal use, in 2002; further,

India’s coal consumption is projected to grow 2.2% annually between 2002 and 2025 (EIA,

2005).

Most of the existing thermal power plants in India use the traditional pulverized coal

combustion technology. As a result, they have to contend with gaseous emissions including

carbon dioxide, nitrogen oxides, carbon monoxide, sulphur dioxide, mercury and particulate

matter. Coal-burning thermal power plants in India are responsible for about 40% of the

country’s SO2 and 41% of its CO2 in 2000 (Shukla, Nag, & Biswas, 2003). Coal-plant



emissions far outweigh those from other fossil-fuel plants contributing to acid rain, and air

pollution and the consequent adverse effects on health.

When based on locally mined coal, the associated problems of mining accidents and land

degradation are serious. In some areas, the use of high ash coal results in disposal problems,

although ash does have productive uses such as brick-making. However, with the alternative

fossil-fuel options, oil- and gas-based plants, too, issues of waste disposal and possible

drilling and pipeline accidents have to be considered. The water use by some thermal plants

constitutes a more serious problem; Indian thermal power plants reportedly use 88% of the

country’s industrial water supply (DTE, 2003). Temperature increases and pollution of

receiving water bodies through inadequately treated effluents have also to be dealt with.

Although based on a clean and renewable source, large hydroelectric plants are not impact-

free. Large dams can cause submergence of human settlements and natural forests, adversely

affecting or even destroying people’s livelihoods, particularly traditional lifestyles, and also

terrestrial ecosystems. However, the magnitude of these impacts varies with the location and

the height of the dams constructed.

With nuclear power plants, radiation hazards (not only through accidents), and disposal of

radioactive spent fuel must also be contended with. Thus far, no country is sure of safe and

permanent waste disposal. And, while clean in terms of carbon-emissions, both ends of the

nuclear fuel cycle – uranium mining and nuclear waste – have harmful environmental

impacts, if not very carefully managed.

However, environmental impact costs are not easily quantifiable. Pollution-induced health

impacts are underestimated when economically disadvantaged people do not obtain medical

treatment; similarly, disruption costs of displaced communities could be inestimable.

6.1.2. REGIONAL IMPACTS

Regional pollution issues, for example the issue of acid rain and sulphur deposition, have

received attention in Northeast Asia. While the magnitude of coal-fired power plants'

contribution may be disputed, particularly during winter and spring, when dominant high-

pressure systems sweep accumulated pollutants off the landmass toward the eastern ocean-

mass.



6.1.3. GLOBAL IMPACTS

The Indian power sectors contribute about 52% of the carbon emissions in the country. Due

to the magnitude of its electricity generation, China’s total carbon emissions are over three

times those from India and even on a per capita basis are over 2½ times. However, as

emissions per capita are low by international standards (EIA, 2003), and developing

countries are not required to adopt greenhouse gas (GHG) reduction targets under the Kyoto

protocol (in effect from February 16, 2005), global issues currently remain less important

than local impacts.

6.2. NATIONAL ENVIRONMENTAL LEGISLATION AFFECTING THE

ELECTRICITY SECTOR

Energy Conservation Act, 2001 (with effect from 2002)

National Environment Appellate Authority Act, 1997

National Environment Tribunal Act, 1995

Ministry of Environment and Forests Environmental Impact Assessment

Notification, 1994 (and additional notification of September 2005)

Central Pollution Control Board’s National Ambient Air Quality Standards

Notification, 1994

Environment (Protection) Act, 1986, amended 1991 (followed by Rules and

amendments of 1986, 1998, 1999, 2001, 2002, 2003, 2004)

The Air (Prevention and Control of Pollution) Act, 1981, and Amendment, 1987

The Water (Prevention and Control of Pollution) Act, 1974, amended 1988

42nd Amendment, 1976, to the Indian Constitution (1949)

a. Article.48A (directing the State to make efforts for the protection and improvement of the

environment)

b. Article 51A(g) (stating that every citizen has a fundamental duty towards protecting the

environment)



2. The Atomic Energy Act, 1962 and Radiation Protection Rules, 1971

6.3. NATIONAL ENVIRONMENTAL POLICIES RELEVANT TO THE

ELECTRICITY SECTOR

National Electricity Policy, 2005

National Environmental Policy, 2004

Environmental Action Plan, 1993 (including cleaner technologies & development of

alternative energy projects)

The National Conservation Strategy and Policy of Environment and Development,

1992

The Policy Statement for Abatement of Pollution,1992 (including pollution

prevention at source, adoption of “polluter pays principle”, & encouragement of best

practices)

National Water Policy, 1987 (with first priority for drinking water, followed by

irrigation, hydro power, navigation, industrial and other uses)



CHAPTER 7

STUDY OF SELECTED COMPANIES



STUDY OF SELECTED COMPANIES

To study and analyze the power sector better, the comparative and analytical study of the Top

5 and Bottom 5 listed firms of power sector in India are done. The firms are chosen based on

their sales turnover. The below are the firms selected by us for the study,

TOP 5

NTPC

Energy Develop

Tata Power

Power Grid

Torrent

BOTTOM 5

JP Hydro

Reliance Infra

KSK Energy

GVK Power

Indowind Energy



7.1. NTPC Ltd.

NTPC Limited is the largest power generating and Navratna status company of India; it was

incorporated in the year 1975 as National Thermal Power Corporation Private Limited to

accelerate power development in the country. As a wholly owned company of the

Government of India, NTPC has emerged as a truly national power company, with power

generating facilities in all the major regions of the country. NTPC's core business is

engineering, construction and operation of power generating plants. NTPC as an integrated

Power Major with presence in Hydro Power, Coal mining, Oil & Gas exploration, Power

Distribution & Trading and also enter into Nuclear Power Development. It provides

consultancy also in the area of power plant constructions and power generation to companies

in India and abroad. It is providing power at the cheapest average tariff in the country. With

its experience and expertise in the power sector, also NTPC is extending consultancy services

to various organisations in the power business. The consulting Wing of NTPC is an ISO

9001:2000 accreditation. In the year of 1982, the company commissioned the first Singrauli

unit.

The Company's status was converted into a public limited in the year 1985 and the name was

changed to National Thermal Power Corporation Limited. In the year 1989, the company

commissioned first gas based combined cycle plant (88MW) at Anta, Rajasthan and its

consultancy services division was commissioned during the same year. The Company had

taken over the 2x210 Mw Feroze Gandhi Unchahar Thermal Power Station in the year 1991,

which was owned by UP RajyaVidyut Utpadan Nigam of Uttar Pradesh. The first gas turbine

was synchronised in 1991-92 and the Unit-I of the company was synchronised in March of

the year 1992. Pursuant to legislation by Parliament of India, the transmission systems owned

by the company was transferred to Power Grid Corporation of India Ltd during the year of

1992. The Company's three gas turbines and two steam turbines were commissioned in the

1992-93. A tripartite agreement was signed between NTPC, UPSEB and GAIL for direct

power supply to GAIL during the year of 1994. NTPC had undertook the 4x60 MW + 2x110



MW Talcher Thermal Power Station during the year of 1995 from the Orissa State Electricity

Board. MOUs had signed with M/s. Nagarjuna Litecrete Ltd. and M/s. Ria-Shelcon for

setting up ash based products manufacturing units with ash from Ramagundam and Farakka

Power Stations.

In 1998, the company commissioned the first Naptha based plant at Kayamkulam with a

capacity of 350MW. Maharashtra State Electricity Board has signed separate power purchase

agreement with the company for the total power supply of 1,345 mw from Kawas-II,

Gandhar-II, Vindhyachal-II and Siptat power stations in the year of 2000. NTPC has signed a

memorandum of understanding with the Ministry of Power for generating 9,400 million units

of electricity during the year. The Company forayed into wind power segment, started the

preliminary work on two projects in Karnataka and Tamil Nadu each with a capacity of 20

MW. The Company has established a 2000MW gas-based power plant near Mangalore. The

4x110 MW of Tanda Thermal Power Station, which was taken by the company in the year

2000, the UP State Electricity Board formerly owned it. NTPC has launched a drive to

recover arrears from the electricity boards of Maharashtra, Madhya Pradesh, Gujarat, Goa,

Daman and Diu and Dadra Nagarhaveli. The Company has signed a memorandum of

understanding with the government to generate 121,000 million units of electricity during

2001-2002.

During the year 2002, the company incorporated three wholly owned subsidiary of the

company viz. NTPC Electric Supply Company Limited, NTPC Hydro Limited and NTPC

Vidyut Nigam Limited. Golden Peacock Award conferred to the company for Corporate

Social Responsibility in14th November of the year 2003. Unit IV (500 MW) of Talcher

Super Thermal Power Project - Stage II (TSTPP-II) of THE COMPANY has been

successfully synchronized on 6th February 2005. The 500 MW Unit at Ramagundam Super

Thermal Power Station has commenced commercial operation on 25th March 2005. In May

of the year 2005, NTPC and Defence Metallurgical Research Laboratory (DMRL) have

signed an MOU. NTPC has bagged IPMA International Project Management Award 2005 for

its Simhadri Thermal Power project on 15th November 2005.

NTPC established the medium Term Note ('MTN') Programme in February of the year 2006

to facilitate the raising of funds on a regular basis from the international debt capital markets



and also signed an MOU with Delhi Transco Ltd., (DTL) on 10th February 2006 for

expansion of one of its stations namely National Capital Power Station Stage-II at Dadri (U.

P.). During the March of the year 2006, NTPC Ltd has entered into a Memorandum of

Understanding with Petronet LNG Limited for arranging one MMTPA of LNG, which used

to overcome shortage of gas at the existing gas power stations of NTPC. The Company had

taken over the Badarpur Thermal Power Station with the capacity of 705MW in the year

2006 from Central Electricity Authority. The Company had signed a Memorandum of

Understanding in 11th March of the year 2006 with the Energy and Resources Institute

(TERI) for implementation of distributed generation projects in villages in India. A 500 MW

unit of Vindhyachal Super Thermal Power Project - Stage III of NTPC Limited located in the

state of Madhya Pradesh has been successfully synchronized on 27th July 2006. NTPC

Limited and Singareni Collieries Company Limited have signed a Memorandum of

Understanding during August of the year 2006, for creation of a Joint Venture Company to

undertake various activities in coal and power sectors including acquisition of coalmines,

development and operation of integrated coal based plants and providing consultancy

services. The Company has signed a Memorandum of Agreement (MOA) in September 21st

of the year 2006 with the Government of Arunachal Pradesh for implementation of the

following two hydroelectric power projects in the States of Arunachal Pradesh. NTPC had

formed a joint venture Company under the name and style of 'Aravali Power Company Pvt

Ltd' on December 21, 2006 with Haryana Power Generation Corporation Ltd (A Government

of Haryana Undertaking). The Company has signed a MoU in February 14th of the year 2007

with Bharat Earth Movers Limited (BEML) for collaborating and associating with NTPC for

a long-term mutually beneficial business.

A 500 MW unit of Vindhyachal Super Thermal Power Project, Stage III of NTPC Limited

located in the state of Madhya Pradesh has been successfully (test) synchronized in the night

of 8th March 2007. Signed a Memorandum of Understanding with Coal India Limited on

15.03.2007 for undertaking development, operation & maintenance of coal blocks and

integrated coal based power plants. NTPC signed an agreement for a term loan of USD 100

million with KFW of Germany on March 23, 2007 at Frankfurt am Main.

During the year 2007-08, the MOU was signed with ADB for establishment of power

generation capacity of about 500 MW through Renewable Energy Sources. The JVA was



signed between NTPC and BSEB for setting up 3x660 MW at Nabinagar, Bihar and also

another one JVA was signed with UPRVUNL to set-up 2x660 MW power project at Meja

Tehsil in Allahabad, UP. The Joint Venture Company (Subsidiary of NTPC) under the name

of 'Bhartiya Rail Bijlee Company Limited' incorporated with Railways for setting up 1000

MW coal based power plant at Nabinagar, Bihar. Business Collaboration and Share Holder's

Agreement signed with Govt. of Kerala and TELK to acquire around 44.6% stake of TELK.

The MOU was signed with Bharat Forge Limited for setting up a new facility to take up

manufacture of Balance of Plant equipments, castings, forgings, fittings etc. JVA signed with

BHEL for taking up activities related to carrying out EPC and manufacturing of equipments

in the period of 2007-08. The 500 MW Unit-I at Sipat Super Thermal Power Project, Stage-II

has commenced commercial operation in June of the year 2008. NTPC has signed a

Memorandum of Understanding (MOU) with Secretary (Power), Government of India for

generating 2.09 billion units of Electricity during the financial year 2008-09.

Developing and operating world-class power stations is NTPC's core competence. Its scale

of operation, financial strength and large experience serve to provide an advantage over

competitors. To meet the objective of making available reliable and quality power at

competitive prices, NTPC would continue to speedily implement projects and introduce

state-of-art technologies.

Fig.5: Growth of NTPC



Source:http://tempweb606.nic.in/index.php?option=com_content&view=article&id=40&Ite

mid=86

Fig. 6: NTCP PERFORMANCE

Source:http://tempweb606.nic.in/index.php?option=com_content&view=article&id=40&Itemid=86

COMPANY PROFILE:

Company name : NTPC Ltd

Address : NTPC Bhawan Scope Complex,

7-Institutional Area Lodi Road,

New Delhi - 110003, New Delhi.

Year of Establishment : 1975

Chairman : Mr. R S Sharma



E-mail : [email protected]

Website : http://www.ntpc.co.in

Production Capacity : 29,394 MW

7.2. RELIANCE INFRASTRUCTURE LTD

Reliance Energy Limited (REL), with its corporate lineage going back to 1929. At the time of

incorporation REL was called as Bombay Suburban Electric Supply Limited (BSES). The

company has been in the field of power distribution for nearly eight decades and with its

emphasis on continuous improvements. REL is a fully integrated utility engaged in the

generation, transmission and distribution of electricity. It ranks among India's top listed

private companies on all major financial parameters, including assets, sales, profits and

market capitalization. A key constituent of the Reliance - Anil Dhirubhai Ambani Group,

India's third largest business house. Reliance Energy has emerged as one of the leading

players in India in the Engineering, Procurement and Construction (EPC) segment of the

power sector. Reliance Energy company currently pursue several gas, coal, wind and hydro-

based power generation projects in Maharashtra, Uttar Pradesh, Arunachal Pradesh and

Uttaranchal with aggregate capacity of over 13,510 MW. Reliance Energy is also active in

the trading and transmission of power sector and has forayed as an equity investor in to the

infrastructure business, including in the prestigious Mumbai metro rail project and various

road projects of the National Highways Authority of India. REL has also entered into the

Internet service provider business in a big way by the name of powersurfer.net. REL (BSES)

has several group companies - ST-BSES Coal Washery (Joint Venture), BSES Infrastructure

Finance, Utility Powertech (Joint Venture), Ticapco, BSES Telecom, BSES Kerala Power,

BSES Andhra Power and three new companies of Orissa. The company has a strategy of

adding value by strategic alliances within the group.

In March 2000 company has been operated "BSES Telecom" as an Internet service provider

(ISP) in Mumbai and has a fiber optic network to support its last mile services and also

exploring alliances for providing utility solutions. Dahanu Power Station achieved a plant

load factor (PLF) of 82.68% during 2000-01. In 2001-02, the BSES Kerala Power Ltd had

commissioned the power station in the Combined Cycle mode but due to various reasons the

BKPL has suspended its operations from October, 2001. OFGW of 220 KW transmission line


http://www.ntpc.co.in/



between Ghodbunder, Versova and Dahanu was successfully completed. RE L's Wind Energy

has one of the highest PLF in the country in the wind farm segment. Contracts and EPC

Division was instrumental in construction and erection works of 5,000 mw in Indian and

other industrial and infrastructure projects. BSES Infrastructure Finance has tied up funds for

various projects to the tune of over Rs 1,500 crore. Utility Powertech is a JV with National

Thermal Power Corporation (NTPC) has 250 operational sites.

During the year 2002-2003, the company has successfully commissioned 210 MW Gas

Based Combined Cycle power plants for BSES Andhra Power and 24 MW Bagasse fired

Power Plant for Godavari Sugar Mills Ltd and 20 MW for Suryachakra Power Corporation

Ltd. In April 2003 Andhra Power Ltd and Reliance Salgocar Power Company Ltd were

amalgamated with the company. During the year 2003-2004, the Company was renamed to

Reliance Energy Ltd from its old name BSES. Reliance energy continues to receive

prestigious awards and recognitions for its outstanding performance in various fields and

through various sources. The Dahanu Power Station received the National Award for

Excellence in Energy Management and National Award for Excellence in Water Management

from the Confederation of Indian Industry and also company got the Maharashtra safety

award-2004 from the Maharashtra Chapter of National Safety Council.

Gold Shield for Meritorious Performance by the Central Electricity Authority (CEA) of the

Government of India for its excellent performance amongst Indian thermal power plants in

the year 2004-05, which was presented by the Honorable Prime Minister of India. The power

station also obtained OSHAS 18001 certification from BVQI during the year of 2005-06.

During the year 2006-07, Reliance Energy had received many awards such as Golden

Peacock Award for its pursuit of excellence in corporate governance, International Quality

Crown Award London 2006 in Gold category, Srishti Good Green Governance (G-Cube)

Award and participated in the prestigious Ramakrishna Bajaj National Quality Awards, the

company was awarded a commendation certificate for the same. In April 2007 REL planned

to set up a 1,400 Mw gas-based power project in Delhi and also company has estimated that

it would have to invest Rs 60,000 crore in next five years to add a capacity of 15,000 MW of

power. As on September 2007 REL considered to hive off its engineering, procurement and

construction (EPC) division into a new company.



Reliance Energy distribute more than 28 billion units of electricity to cover 25 million

consumers across different parts of the country including Mumbai and Delhi in an area that

spans over 1,24,300 sq. kms. It generates 941 MW of electricity, through its power stations

located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa. These projects are at

various stages of development. Company wants to attain global best practices and become a

world-class utility and to provide uninterrupted, affordable, quality, reliable and clean power

to millions of customers. Future plan and action of the company is installation of third

cooling tower cell to improve plant reliability and output. Energy savings by installation of

energy efficient blades on cooling tower fans. ETP pump modification to reduce auxiliary

power consumption. Auto - locking facility of energy meters at midnight to facilitate

simultaneous logging of energy meter readings. The company has targeted to complete all

activities under the six sigma project, ISO 27001 and OHSAS certifications during 2007-08,

which will make Reliance Energy the first utility in the country to achieve these

certifications. These initiatives are aimed to cater the market and at further promoting

business excellence in all functional areas of the company. In 2008 company engaged in

several mega projects under implementation and under consideration in different functional

areas, in that the notable two big projects are engineering, procurement and construction

(EPC) contract from Damodar Valley Corporation (DVC) to set up the 2 x 600 MW coal

based power station at Raghunathpur in West Bengal worth of Rs 3,725 crore and Airport

Metro Express Line, Delhi project on BOOT basis for a concession period of 30 years worth

of Rs 2,500 crore.

PROFILE:

Company name : Reliance Infrastructure Ltd

Address : Reliance Energy Centre,

Santa Cruz (East),

Mumbai - 400055, Maharashtra


Chairman : Anil D Ambani

E-mail : [email protected]/[email protected]


mailto:[email protected]/[email protected]


Website : http://www.rinfra.com

Production Capacity : 941 MW

7.3. TATA POWER COMPANY LTD

Tata Power Company Limited (TPC), India's largest integrated Electric Power Utility in

private sector with a reputation for reliability, incorporated in the year 1919 at Mumbai. TPC

pioneered the generation of electricity in India nine decades ago. The core business of Tata

Power Company is to generate, transmit and distribute electricity. The Company operates in

two business segments: Power and Other. The Power segment is engaged in generation,

transmission and distribution of electricity. The other segment deals with electronic

equipment, project consultancy.

The Tata-Ebasco Consulting Engineering Services' was established based on partnership with

Ebasco India, Ltd for consulting engineering together with its two associated companies in

the year 1961. In the year 1969, a new company under the name Chemical Terminal Trombay

Ltd was formed in participation with other Tata Companies and Elephanta India Private Ltd

to installation of storage tanks on a part of the Company's ash disposal area at Trombay and

the laying of a pipeline connecting the storage tanks with the Mumbai Port Trust's pier at Pir

Pau. TPC sets up its new manufacturing facility at Bangalore during the year 1980, for

commercial production of electronic items designed by its R&D laboratory.

TPC has undertaken a 180 MW combined cycle plant at Trombay using gas turbines. In

1989, six new outlets for BEST at 33 KV from Carnac receiving stations were commissioned

during the year. In the same year the company also associated with Siemens in the erection

and commissioned the mechanical and electrical equipment for the 4 x 130 MW gas turbines

and 2 x 150 MW steam turbines at NTPC's combined cycle power plant at Dadri in Uttar

Pradesh. The second 500 MW units 6 at Trombay was trial synchronized with the grid on

23rd March 1990. The Company took up two major generation projects, viz., 150MW

Pumped Storage Unit at Bhira and a gas-based 180 MW Combined Cycle Plant at Trombay

Thermal Power Station in case of a major system disturbance and supply power to essential

consumers, viz., Railways, BMC, BARC, etc. TPC started one new 110 KV substation at


http://www.rinfra.com/


Versova during 1991, which comprised 2 x 90 MVA, 110/33 KV power transformers along

with 33 KV indoor SF6switchgear and supervisory control and data acquisition system and

also another one switching station was established in the same year, which comprised 3 x 250

MVA, 220/110/33 KV autotransformers, space saving 245 KV gas insulated switchgear and

supervisory control and data acquisition system.

The modern 22 KV indoor SF6switchgear was installed at Salsette and also the 60 MVAR

new capacitor banks were installed during the year 1992 at Versova and Malad. Apart from

these, replacement of 110 KV oil circuit breakers by modern SF6 breakers at Kalyan,

Ambernath, Vikhroli and Salsette receiving stations and extension of fibre optic

communication network were also carried out during the same year. In 1994, the Trombay

Unit-7 steam turbine generator of the company was harmonized, which generated 650 MUS

with PLF of 61.9%. During the year, the Company undertook the work of strengthening dams

as per designs codes in respect of earthquakes.

The Government of Maharashtra had accorded its permission for rebuilding a dam at

Somwadi. A MoU was signed between TEC and the Tennesse Valley Authority of USA for

renovation and modernisation of power plants. In the same year 1994, the Company issued

91,549 Global Depository Shares. The 150 MW Pumped storage unit was commissioned in

the year 1995, based on the synchronous condenser mode and also the Company undertook

the work of modernisation and renovation of old 12 MW hydro units at Bhivpuri and Khopoli

Generating Stations. In the year 1996, the generating station five 25 MW units were

refurbished by installation of new modern turbine runners of higher efficiency at Bhira.

During same the year, the Company bagged the Multi-fuel based 80 MW power project from

the Government of Karnataka. The thermal Units at Trombay operated by the company in the

year 1997 based on-line availability of about 74% and utilization of about 64.3%. TPC

entered into a Joint Venture Agreement with Total Gas and Power India in the year 1998 for

establishment of LNG Terminal at Trombay.

During 1999, the company acquired a generating station consisting of 37.5 MW Unit at Wadi,

Karnataka and also in the year the Power Purchase Agreement for 81.3 MW Diesel-based

Power Plant at Belgaum, Karnataka was signed with Karnataka Electricity Board. Tata Power

Company has obtained A' licence as Internet service provider that enables it to operate

throughout the country in the year 2000. The Andhra Valley Power Supply Company Ltd and



Tata Hydro Electric Supply Company Ltd were merged with the company in the same year

2000. Tata Power Company Ltd on September of the year 2001, decided to sell its stake

consisting of 45 lakh shares in Tata Liebert Ltd (TLL) considering of Rs 170 per share to

Emerson Electric (Mauritius) Ltd. The Company signed an agreement with Power Grid

Corporation of India Ltd for 'Tala Transmission Line' in the year 2002. The 120 MW Unit 3

at the Jojobera Power Plant of the Company situated in Jamshedpur was commenced its

commercial production. TPC has signed the share acquisition agreement with Gvt of National

Capital Territory of Delhi to acquire the North North-West Delhi Distribution Co. Ltd.

(Discom-III), a distribution company belonging to the Delhi Vidyut Board (DVB), which

supplies power to north and northwestern Delhi. The company ties up with the UK-based

energy major British Petroleum to jointly work on 2,184 mw Dabhol power project during

the year 2003. During the same year 2003, TPC awarded the contract for supply and

construction of 180 KM long 400 KV Double Circuit Transmission Line from Palandur to

Chandrapur (Maharashtra) By Power Grid Corporation of India Ltd. Tata Power infuses Rs

352 crore in the group's telecom businesses.

Tata Power acquired 100% equity stake in Tata Power Trading Co. Pvt Ltd in the year 2004.

The Christened Tata Power Trading Company was incorporated in the year as a subsidiary of

the company. TPC has signed a Development Agreement with GAIL India Ltd & BP to

jointly participate in evaluating the Dabhol gas and power opportunity. A MoU was signed

with National Power Company of Al-Zamil Group, Kingdom of Saudi Arabia. The company

bagged the 2nd Wartsila - Mantosh Sondhi Award for outstanding contribution to the Indian

Power Sector in 2004. Tata Power signed a generation pact with DVC on Maithon Project in

the year 2005 and entered into an agreement for sale of shares in Tata Power Broadband. The

company received CII EXIM Bank Award 2005 for 'Certificate for Strong Commitment to

Excel'. During the period of 2006, the company joined hands with Siemens. The company

signed a joint venture agreement with Tata Steel to set up a Captive Power plants in

Chattisgarh, Orissa and Jharkhand. The company received seven licenses from the Gvt of

India, Ministry of Commerce and Industry, Dept of Industrial Policy & Promotion for its

Strategic Electronics Division (Tata Power SED).

In the year 2007, TPC has signed a MoU with the Government of Chhattisgarh for the setting

up of a 1000 MW coal fired mega power plant in the State. The company has roped in Korea-



based Doosan Heavy Industries and Construction Ltd for supercritical boilers for its Mundra

ultra mega power project. The acquisition of Coastal Gujarat Power Ltd was med by the

company and a Special Purpose Vehicle (SPV) formed for Mundra Ultra Mega Power Project

(UMPP). TPC has signed an EPC contract for supply of five (5) 800 MW Steam Turbine

Generators with Toshiba Corporation for the first 4000 MW Ultra Mega Power Project

(UMPP) in India to be located at Mundra, Gujarat in August 2007.

As on February 2008, The Tata Power Company Limited (Tata Power) and Damodar Valley

Corporation (DVC) jointly completed its financing for the 1050 MW coal based thermal

power project, being set up in Dhanbad District of Jharkhand State. Recognising the steady

and stable performance in generating quality and reliable energy, the Central Electricity

Authority has awarded Tata Power's Bhira Hydro generation facility with the Silver Shield

award for the meritorious performance in March 2008. April of the year 2008, Tata Power

completes the Signing of Financial Agreements for 4000 MW Ultra Mega Power Project,

coming up at Mundra, Gujarat. The cost of the project is estimated at INR 17000 crores

(USD 4.2 billion). Tata Power announced in September of the year 2008, it would acquire a

11.4 per cent stake in Geodynamics Ltd, an Australian company specialising in geothermal

energy, for Rs 165 crore.

Tata Power is surging ahead, lighting up lives through its activities from its inception. The

challenge of fulfilling the ever growing needs of power have been met by Tata Power through

efficient generation, transmission, distribution and constant upgradation of its technology in

every aspects.

PROFILE:

Company name : Tata Power Company Ltd

Address : Bombay House,

24 Homi Mody Street,

Mumbai, 400001, Maharashtra


Chairman : Mr. R N Tata




Website : http://www.tatapower.com

Production Capacity : 2300MW

7.4. POWER GRID CORPORATION OF INDIA LTD

The Company was incorporated in October 23rd of the year 1989 as the National Power

Transmission Corporation Limited with the responsibility of planning, executing, owning,

operating and maintaining the high voltage transmission systems in the country.

Subsequently, the company name was changed to the present name Power Grid Corporation

of India Limited (PGCIL) with effect from October 23rd of the year 1992. The company's

operational area includes, Development of Inter-State transmission Systems and Grid

Management. Development of Inter-State transmission Systems consists of Planning &

Design, Construction, Quality Assurance & Inspection and Operation & Maintenance. Grid

Management includes Establishment of modern Load Despatch Centres, Real-time Grid

Operation, Optimum scheduling & despatch and Energy accounting including settlements.

The Diversification consists of Broadband Telecom Services, Sub-transmission, Distribution

and Rural Electrification. The company has certified as PAS 99:2006, which integrates the

requirements of ISO 9001:2000 for quality, ISO 14001:2004 for environment management

and OHSAS 18000:1999 for health and safety management systems.

PGCIL has commenced the operations in the year 1992 as part of an initiative of the

Government of India to consolidate all the interstate and inter-regional electric power

transmission assets of the country in a single entity. In the year 1993 Tehri Hydro

Development Corporation Limited's assets were transferred to PGCIL pursuant to a

memorandum of understanding executed between the both. Since 1994, the GOI has

progressively entrusted the company with the operation of the Regional Load Despatch

Centres ('RLDCs') in each of the five regions into which India is divided for purposes of

power transmission and regulation. From the year 1995, the consultancy division of the

company has provided transmission-related consultancy services to domestic and

international projects. In consultancy business, the company has also facilitate the

implementation of various GOI-funded projects for the distribution of electricity to end-

users, such as the Accelerated Power Development and Reform Programme ('APDRP') in


http://www.tatapower.com/



urban and semi-urban areas and the Rajiv Gandhi Grameen Vidhyutikaran Yojana (the

'RGGVY') in rural areas. During the year 1995, the company took over the management of

the Eastern Regional Load Despatch Centre and the North Eastern Load Despatch Centre.

Again in 1996, the company captured over the management of the remaining two regional

load despatch centres, namely, the Northern Regional Load Despatch Centre and the Western

Load Despatch Centre. In 1998, the Government of India formally notified the PGCIL as a

Central Transmission Utility and also in same year PGCIL was declared as a Mini Ratna

Category I public sector undertaking by the Government of India.

Department of Telecommunications, Government of India has granted the Infrastructure

Provider II license (IP II) to the company in the year of 2001, for pursue leasing of bandwidth

capacity to various customers on its telecommunications network. During the year 2002, the

company commissioned the unified load dispatch and communications schemes for the

northern and southern regions. The Sasaram HVDC back to back transmission system

developed by the PGCIL was commissioned leading to the completion of the first phase of

the construction of the National Grid and also the 2,000 MW Talchar-Kolar bipolar HVDC

link was commissioned, which also developed by the company.

The Company had entered into a joint venture arrangement with Tata Power Company

Limited during the period of 2003 for implementing a part of the entire transmission system

associated with Tala Hydro-Electric Project which was the first public-private sector

initiative in the transmission sector. PGCIL had developed the 400 KV Raipur-Rourkela line

transmission lines and it was commissioned. Also in the same period of 2003, the Western

region, Eastern Region and North-Eastern Region begin operating in a synchronised manner

with a cumulative capacity of 50,000 MW. The Company secured its first international

consultancy contract from Bhutan Telecommunications. The unified load dispatch and

communications scheme for the eastern region was commissioned in the year of 2005. After

a year, in 2006, the unified load dispatch and communications scheme for the western region

was commissioned. In the same year 2006, PGCIL had entered into an agreement with Rural

Electrification Corporation Limited and certain state governments and state utilities for

undertaking rural electrification works under the Rajiv Gandhi Grameen Vidyutkaran Yojana

in nine states. Power Grid Corporation of India Ltd (PGCIL) has been selected for the

Government's MoU Excellence Award for the year 2006-07.



PGCIL has signed a loan agreement with Asian Development Bank (ADB), Manila for US$

400 million on March 28th 2008, as well as in the same date, same month and same year the

company has signed a loan agreement with The World Bank for USD 600 Million. As on

May 1st of the year 2008, the Government granted coveted 'Navratna' status to Power Grid

Corporation of India Ltd, giving the transmission major financial autonomy to take

independent decision on investments up to Rs 1,000 crore. The company is looking to tap the

potential of its telecom business and consultancy; the electricity towers could be an ideal

place to locate the cellular phone transmission towers in the future.

PROFILE:

Company name : Power Grid Corporation of India Ltd

Address : B-9 Qutab Institutional Area,

Katwaria Sarai,

New Delhi - 110016, New Delhi


Chairman : S K Chaturvedi


Website : http://www.powergridindia.com

Transformation capacity : 77,217 MVA


http://www.powergridindia.com/



7.5. TORRENT POWER LTD

Torrent Power Limited (TPL) is an integrated power company engaged in the generation and

distribution of electricity in the cities of Ahmedabad, Gandhinagar and Surat in the state of

Gujarat and Bhiwandi Franchise in Maharashtra. TPL was incorporated in 29th April of the

year 2004 as Torrent Power Trading Private Limited.

Torrent brought together three of its group companies during the year 2004-05, Torrent

Power AEC Limited, Torrent Power SEC Limited and Torrent Power Generation Limited

under a single, unified brand as Torrent Power. Government of India conferred Gold shield

for best performance in power distribution for the years 2004-05 and also for 2005-06. TPL

and Siemens created a 50:50 JV to provide O&M services to its SUGEN 1147.5 MW CCPP

in the year 2005-06. The Company had awarded EPC contract for its SUGEN 1147.5 MW

CCPP to a consortium of Siemens AG and Siemens Ltd. India; commenced construction of

its first power block. The Company had entered into a Joint Venture with Power Grid

Corporation of India Limited (PGCIL) in the same year 2005-06 for setting up dedicated

transmission lines of 440 KV for evacuation of power from 1100 MW SUGEN project to

Ahmedabad distribution area and to the National Grid through connectivity with PGCIL at

Dehgam and Loop In Loop Out of Gandhar- Vapi line. The name of the company was

changed to Torrent Power Private Limited in 25th January of the year 2006. Consequent to

the conversion of the company into a Public Limited Company in 8th February of the year

2006, the company came to be called as Torrent Power Limited.

As at 20th December 2006, the company had signed a distribution franchise agreement for a

period of ten years for the Bhiwandi circle in Maharashtra with Maharashtra State Electricity

Distribution Company Limited (MSEDCL). The Company had commenced Distribution

Franchise Bhiwandi circle of catering to 1.4 lakh customers with an unrestricted demand of

about 700 MW in 26th January of the year 2007. TPL had signed a memorandum of

understanding (MoU) with Gujarat Power Corporation in May of the year 2007 for setting up

over 1000-MW coal based power project at Pipavav, dist. Amreli in Gujarat. TPL made tie up



with Gujarat State Petronet Limited for the gas transportation in line with project

requirement. The Company had enhanced power transformation capacity during the year

2007-08 about 371 MVA by commissioned of two 220 kV substations at Surat and one 33 kV

substation at Ahmedabad. CRISIL had assigned AA- & P1+ ratings to the company's bank

facilities in March of the year 2008.

PROFILE:

Company name : Torrent Power Ltd

Address : Torrent House,

Off Ashram Road,

Ahmedabad - 380009, Gujarat


Chairman : Mr. Sudhir Mehta


Website : http://www.torrentpower.com

Production Capacity : 500 MW


http://www.torrentpower.com/



7.6. JP HYDROPOWER

The Company was incorporated on December 21, 1994 with the object, interalia, to set up

hydro-electric or Thermal power projects and for the supply of general electric power. The

Certificate of Commencement of Business was granted on January 9, 1995. Our registered

office is in New Delhi. Jaiprakash Hydro-Power Limited (JHPL), a part of the Jaypee Group

owns and operates the 300 MW Baspa-II Hydroelectric Project at District Kinnaur in

Himachal Pradesh.

Financial Institutions approved the Project at an estimated project cost of Rs.11, 020 million

in March of the year 1995 and signed PPA as one of the pre-disbursement conditions.

Executed the tripartite agreement between JHPL, JAL and GoHP in the same year 1995

consenting the transfer of all assets, liabilities, obligations, privileges and benefits arising out

of MOU from JAL to JHPL. During June of the year 1997, the company signed PPA with

HPSEB pursuant to Implementation Agreement with GoHP. In the same year, the financial

institutions reappraised the project with a revised cost of Rs.12, 630 million. In January of

the year 2008, JHPL made an amendment in the PPA to include provisions for escrow

mechanism and letter of credit for realisation of payment from HPSEB. Accomplished the

agreement with Siemens AG Consortium, Germany and Alstom T & D, France in the year

1999 for import of electromechanical equipment and GIS/GIB respectively. Again the

financial institutions reappraised project cost at Rs.13, 450 million in the year 2000 and Rs.

16,120 million in the year 2002.

The Baspa-II project - India's Largest Private Sector Hydro-Power project has been fully

commissioned in 8th June of the year 2003 at a project cost of Rs 1624.72 crores and has

started generating power. Jaiprakash hydropower filed prospectus with ROC, all decks

cleared for IPO in power sector in third week of March 2005. During the year 2005-2006, the

company entered into a memorandum of Understanding with the Power Grid Corporation of

India Ltd to promote a Joint Venture Company for establishing a Transmission System for

evacuating power from 1000 KW Karcham Wangtoo Hydro-Electric Project. To minimize the

erosion due to silt (with large quartz content) during monsoons, two more modern technology



spare runners with Tungsten Carbide coating employing HVOF thermal spray have been

procured/ ordered. One such runner was put in operation in May of the year 2006. JHPL filed

the tariff application in 30th November of the year 2007 with Hon'ble HPERC for

determination of tariff for Financial Year 2008-09 to 2010-11, which is in process.

Present Scenario:

JPVL plan to implement a 2400MW hydroelectric project (the Lower Siang project),

expected to commence operations in 2014 and a 500 MW hydroelectric project (the Hirong

project), expected to commence operations in 2015, in the state of Arunachal Pradesh

(collectively the Arunachal projects). These projects were initially awarded to JAL and were

transferred to us through a tripartite agreement dated December 13, 2007. The memoranda of

agreement for these projects provide for the Government of Arunachal Pradesh to own 11%

of the equity capital in the special purpose vehicle that are to be incorporated to implement

each of these projects. JPVL proposes to subscribe 55.36% of the equity capital of Jaypee

Karcham Hydro Corporation Limited (JKHCL), which is implementing a 1000 MW ( 4*250

MW units) run-of-the-river hydroelectric power projects on the river Sutlej, in Kinnaur

district of the state of Himachal Pradesh , expected to commence operations in 2011 (the

Karcham –Wangtoo project).

PROFILE

Company name : JP Hydropower

Address : JA Annexe 54,

Basant Lok,

Vasant Vihar,

New Delhi-110 057.

Year of Establishment : Dec.21,1994

Name of CEO : Mr. Gagan Banga






7.7. ENERGY DEVELOP

Energy Development Company Limited was incorporated as a public limited company as on

the 19th January, 1995. The company took over execution of Harangi Mini Hydro Electric

Power project on BOT (Build Operate Transfer) basis for a period of 40 years from the date

of commissioning of the project. The project was initially awarded to M/s. North East Energy

Services ("NEES") USA, by the Government of Karnataka.

Accordingly an agreement was entered between the Government of Karnataka and M/s.

Public Power International Inc ("PPII") a group company of NEES acting on behalf of

NEES. In accordance with this agreement a new company was incorporated on the 19th

January, 1995 in the name of "Energy Development Company Limited" for executing the

project.

During the year 1999, the company signed Power Purchase Agreement with Karntaka Power

Transmission Corporation Ltd (Formerly KEB) for sale of entire energy generated, which

would be valid for 20 years. The Harangi Hydro Electric Project was finally commissioned

and synchronised with the grid on 14th July, 1999.

Energy Development Company Ltd has signed a Power Purchase Agreement with Hubli

Electricity Supply Company Ltd (HESCOM) in respect of its 6 Mw Harangi Phase - 2

Minihydel Project, which is subject to approval of the Karnataka Electricity Regulatory

Commission (KERC).Energy Development Company Ltd has signed a Power Purchase

Agreement (PPA) with Hubli Electricity Supply Company Ltd (HESCOM) in respect of its 6

Mw Harangi Phase - 2 Minihydel Project which is subject to approval of the Karnataka

Electricity Regulatory Commission (KERC). Energy Development Company Ltd has signed

a Memorandum of Understandings (MoU) with Government of Arunachal Pradesh to

develop 5 (Five) Hydro Electric Projects totaling to 210 MWs on BOOT basis.

PROFILE

Name : Energy Develop

Address : Harangi Hydroelectric Project



Village-Hulugunda, Kodagu, Karnataka-571233Chairman : Mr. Amar Singh

E-Mail : [email protected]

7.8. KSK ENERGY

KSK Energy Ventures Limited (KSKEVL), a subsidiary company of KSK Energy

(Mauritius) was got birth on 14th February 2001 as a private limited company under the

name of KSK Energy Ventures Private Limited to capitalize on the emerging opportunities in

the Indian power sector and focus on developing, operating and maintaining power projects.

KSKEVL is a power project development company in India, with track record of developing

and operating power plants, which supply power to a combination of industrial and state-

owned consumers in India. Business model of the company includes Power Plant

Development, Security Fuel Linkages, Project Management & Development and Operation

Management. The company has operational power plants capable of generating 144 MW of

power, and currently constructing, developing or planning power projects capable of

generating an aggregate of 8,993 MW of power.

KSKEVL became a public company pursuant to a special resolution of the shareholders of

the company at an extraordinary general meeting held on February 9, 2002, and the word

'private' was deleted from its name. During the year 2004, the 'Small is Beautiful' Fund

achieved financial closure. After a year, in 2005, KSKEVL had signed a shareholders

agreement and a power purchase agreement with Lafarge India Private Limited to set up a 43

MW coal-based captive power plant in Arasmeta. In April of the same year 2005, the

company had executed an agreement with India Cements Limited for expansion of the power

plant of Coromandel Electric Company Limited by 8.73 MW. In November 2005, a Joint

venture agreement was signed with LB India Holdings Mauritius I Limited to form KSK

Electricity Financing India Private Limited. As on January 2006, the Coromandel Electric

Company Limited commenced commercial operation of Phase 2 of the 8.73 MW gas engine

based captive power plant and in May of the same year 2006, the 43 MW coal based captive

power plant of Arasmeta Captive Power Company Private Limited synchronized with the

grid.

KSK Power Ventur plc is a power project development company listed on Alternate

Investment Market (AIM) of the London Stock Exchange. KSK operates in India through its




fully owned subsidiary, KSK Energy Ventures Limited (KSKEVL). Its operations in the

Indian Power Sector are powered by the growth opportunities it realizes and capitalizes on.

An affiliate of Lehman Brothers of USA has 33.5% stake in KSKEVL.

Present Scenario:

In the existing scenario investors who have a long-term view of at least two years can remain

invested. Other investors can consider exiting the stock at an appropriate opportunity.

The company, which currently has a capacity of 144 mw, expects to commission a 135-mw

plant towards the end of ’08. Another plant of 540 mw capacity is expected to be

commissioned by December ’09. With these two plants, the company should be able to

nearly double its by FY10, compared to FY08.

PROFILE

Company : KSK Energy

Address : KSK Energy Ventures Limited 8-2-293/82/A/431/A Road No:22, Jubilee Hills Hyderabad 500033, INDIA.

Establishment : 2001

Tel : +91 40 23559922/23/ 24/ 25

Fax : +91 40 23559930

E-Mail : [email protected] n

Main buyers : Industrial and state-owned consumers





7.9. GVK POWER

GVK Power & Infrastructure Limited (GVKPIL) is a listed public company belonging to

GVK, engaged in the business of owning, operating, and maintaining power plants by itself

and through its subsidiary/associate companies. GVK is amongst India's largest infrastructure

developers with experience and expertise spanning areas including hospitality,

manufacturing, power, roads, airports, SEZs and urban infrastructure. The Company was

incorporated in 2nd December of the year 1994 as a private company with unlimited liability

under the name of Jegurupadu Operating & Maintenance Company. GVK is amongst India's

largest infrastructure developers with experience and expertise spanning areas including

hospitality, manufacturing, power, roads, airports and urban infrastructure. Until date GVK

has invested over Rs. 5,000 crore in its various business and has on hand projects in the

pipeline of over Rs. 12,000 crore. GVK is developing power projects that are based on coal,

gas and hydel resources. The projects are being developed across several States in the

country including Andhra Pradesh, Punjab and Uttarakhand.

The Company was converted to a company with limited liability and consequently the name

was changed to Jegurupadu Operating & Maintenance Company Private Limited in 20th

April of the year 2005. Subsequently, it was converted from a private limited company to a

public limited company during 19th May of the year 2005 and renamed as Jegurupadu

Operating & Maintenance Company Limited. Thereafter, the name of the company was

changed to GVK Power & Infrastructure Limited as at 13th July of the year 2005. In October

of the year 2005, GVKPIL acquired GVKPPL and Transoceanic Projects Limited's equity

stake in GPL. Accordingly, 51% of the equity shares in GPL now held by GVKPIL continue

to remain pledged with PFC. In January 2006, the consortium led by GVK Group and

comprising Airports Company South Africa and Bidvest was awarded the mandate to

modernize India's busiest airport, the Chhatrapati Shivaji International Airport (CSIA) at

Mumbai. The GVK is a diversified business house with interests in a range of businesses

including power, roads, urban infrastructure, bio-science, hotels and manufacturing.



Managing Director of GVKPIL, is a first generation entrepreneur who established the

business 4 decades ago. The Company was incorporated in the National Capital Territory of

Delhi on December 2, 1994 as of the security mechanism Maytas, IJM, NCC and GVKPPL

and their respective affiliates were required to pledge 51% of their respective shareholding on

the current paid up capital of the GPL with PFC.Jegurupadu Operating & Maintenance

Company, a private company with unlimited liability, under the Companies Act, 1956. The

Company was converted from a company with unlimited liability to a company with limited

liability and consequently the name was changed to Jegurupadu Operating & Maintenance

Company Private Limited on April 20, 2005. Subsequently, the Company was converted

from a private limited company to a public limited company on May 19, 2005 and the name

was changed to Jegurupadu Operating & Maintenance Company Limited. Thereafter, the

name of the Company was changed to GVK Power & Infrastructure Limited on July13,

2005.

Present Scenario

In recent years the Promoters through the Promoter Group Companies have increasingly

focused on the power and infrastructure sector. Managing Director of GVKPIL, is a first

generation entrepreneur who established the business four decades ago. The Company has

tied up the entire financial assistance of Rs.10,150 million (constituting 70% of the project

cost of Rs 14,500 million) from various lenders, lead by Power Finance Corporation Limited

(PFC). The Company has initialed the draft Power Purchase Agreement with Punjab State

Electricity Board ('PSEB') in December 2006. GVK consolidates its Power, Airports And

Road Projects Under GVK Power & Infrastructure Limited in January 2007. During July of

the year 2007, GVK signed MoU with Tamil Nadu Industrial Development Corporation

(TIDCO) to set up multi-product SEZ in Perambalur. As at August of the year 2007,

Alakananda Hydro Power Company Ltd, a GVK group company has achieved financial

closure for its 330 MW Shrinagar Hydro Electric Project, being set up in Uttarakhand.

During February 2008, the Chhatrapati Shivaji International Airport (CSIA), Mumbai

International Airport Pvt Ltd (MIAL) today signed an agreement with SITA, the world's

leading provider of IT applications to airports. The GVK-BHP Billiton consortium has

emerged as provisional winners of seven deepwater exploration blocks off the west coast of

India during June of the year 2008.



GVKPIL has initiated power projects that will cross over 2000 MW capacity once

operational. While Jegurupadu Combined Cycle Power Plant is operational, several

ambitious power projects are under development.

PROFILE

Name : GVK Power

Address : GVK Industries Ltd.

Paigah House,

156-159, SP Road,

Secunderabad 500003,

AP, India.

Year of establishment : 1994

Chairman : Mr.G.V.krishna Reddy

Tel : +91-40-27902663/4

Fax : +91-40-27902665

E-Mail : [email protected] m





7.10. INDOWIND ENERGY

The Company was incorporated as Indowind Energy Private Limited' on July 19, 1995. The

Company became a deemed public limited company on September 30, 1997 and was

converted into a public limited company on December 29, 2000.

Mr. K.V. Bala and Subuthi Finance Limited have promoted the Company with the main

object of developing wind farms on a large scale for commercial exploitation, generating

energy from Wind Mills, Wind Turbines and other Equipment and selling it to State Electric

Boards and Corporate clients.

The Company commenced its commercial operation of generating power on September, 1995

by setting up 225 KW Wind Electric Generator in Tamil Nadu. The Company has been

raising its generation capacity every year and the same has since been increased to 16.825

MW. The Company has altered its main object clause to include the activities of

manufacturing equipments of windmills under the purview of its business; a unit was set up

in Pondicherry through which the Company has provides total solution for installation,

operation and maintenance of windmills for third parties. Indowind, is an IPP in the

renewable energy field generating “Green Power ” through dedicated Wind farms & also

offers allied services in the Wind Energy sector with a mission to be a global player in wind

energy sector.

Indowind, with proven capabilities in setting up Wind farms, Operating & Maintaining them

with optimum machine availability, Green Power sale to Corporates & EB, for which we

have acquired through a decade on onsite experience possessing considerable domain and

technology knowledge to provide end-to-end solutions & services. Indowind has strong

capabilities and expertise in areas like project management, robust managerial & financial

resources and experience in the operations of wind farms. The Indowind O&M team consists

of dedicated staff for 24x7 monitoring of the Wind mills with capabilities for attending to

machinery breakdowns to keep them in shipshape. Strong credibility of the promoters, their



business orientation and approach including the corporate strategy provides the competitive

edge to be a significant global player.

Present Scenario

It currently supplies power to a state utility and a few companies in Karnataka. Tamil Nadu

Electricity Board (TNEB) is its major client.

The company has purchased WEGs from reputed suppliers like NEPC-MICON, VESTAS-

RRB, AMTL-Wind World and AWT to avoid dependence on single technology and single

manufacturer. The company has offer Green Power' to customers that include SEBs and

Corporates. Other than the above company has also into the business of providing Operations

and Maintenance services for windmills. Recently, the company has ventured into turnkey

projects for erection, installation and maintenance of windmills for corporate companies.

The company has worked continuously to strengthen infrastructure and enhance the presence

in this sector. The company has been selling the power generated to Tamil Nadu Electricity

Board (TNEB) and various private corporate clients in Karnataka such as Hindustan Coca

Cola Beverages Private Limited, Karnataka Distilleries Limited, United Breweries Limited,

H&R Johnson India Limited, Delphi Automotive Systems Private Limited and Spicer India

Limited. The electricity charges recovered for the corporate clients in Karnataka are more

than the revenue generated from the sale to SEBs. Since the wheeling charges under the new

policy are very exorbitant, the company has decided to sell the power generated from the

proposed 9 MW project to BESCOM (KPTCL) where the realization per unit is higher as

compared to sale to private corporate clients under the current guidelines.

Currently, Indowind Energy sells power to TNEB at Rs 2.70 per unit. It sells power to

corporate clients in Karnataka at Rs. 4.05 per unit (however, the company has to pay

wheeling charges at 10%).Is setting up a wind farm of 9-MW capacity in Karnataka at an

investment of Rs 49.7 crore. Intends to sell this project for an appropriate price. The project

division’s profit before tax (PBT) margin was 23.5% in the year ended March 2007 (FY

2007).



PROFILE:

Name : Indowind Energy

Address : Indowind Energy Ltd.

Kothari Buildings, 4th Floor,

114, M.G.Road,

Nungambakkam,

Chennai-600034,

Tamil Nadu, India.

Establishment : 1995

Chairman : Mr. K.V.Bala

Tel : +91 44 28331956 / 57 / 58 / 59

Fax : +91 44 28330208

E-Mail : [email protected] m

Main Buyer : Titan,Coca-Cola,Spicer,Axis Bank,TVS

Production Capacity : 17.915MW




CHAPTER 8

Analysis of power sector



8.1. RATIO ANALYSIS

Financial ratio analysis can reveal much about a company and its operations. However, there

are several points to keep in mind about ratios. First, a ratio is a "flag" indicating areas of

strength or weakness. One or even several ratios might be misleading, but when combined

with other knowledge of a company's management and economic circumstances, financial

analysis can tell much about a corporation. Second, there is no single correct value for a

ratio. The observation that the value of a particular ratio is too high, too low, or just right

depends on the perspective of the analyst and on the company's competitive strategy. Third,

financial ratios are meaningful only when compared with some standard, such as an industry

trend, ratio trend, a trend for the specific company being analyzed, or a stated management

objective.

8.1.1. Key Ratios

1. Debt-to-equity ratio:

A debt-to-equity ratio, which is the total debt of an entity divided by the total equity of that

entity, is a measure of the use of leverage or a measure of risk. Leverage is the use of other

people's money to make money. In its simplest form, it is borrowing money from someone at

a stated interest rate (such as 8%) and then investing that money in a project that earns a

greater return than this stated rate (such as a 12% return). Leverage results in great

profitability--when it works--because an entity is earning profits without having to invest any

of its own money to get that return. The greater an entity's debt-to equity ratio, the greater is

the use of other people's money to make money. The greater an entity's debt-to-equity ratio,

the greater is the opportunity for high returns for that entity. The debt-to-equity ratio is also a

measure of risk since the more debt that is used, the greater the risk that the entity might be

forced to liquidate and go out of business.

2. Long Term Debt-to-equity Ratio:

It is a capitalization ratio comparing long-term debt to shareholders' equity. Its a measure of a

company's financial leverage calculated by dividing its total liabilities by stockholders'

equity. It indicates what proportion of equity and debt the company is using to finance its



assets. Sometimes only interest-bearing, long-term debt is used instead of total liabilities in

the calculation. It is also known as the Personal Debt/Equity Ratio, this ratio can be applied

to personal financial statements as well as companies. A high debt/equity ratio generally

means that a company has been aggressive in financing its growth with debt. This can result

in volatile earnings as a result of the additional interest expense. The debt/equity ratio also

depends on the industry in which the company operates.

3. Current Ratio:

An indication of a company's ability to meet short-term debt obligations; the higher the ratio,

the more liquid the company is. Current ratio is equal to current assets divided by current

liabilities. If the current assets of a company are more than twice the current liabilities, then

that company is generally considered to have good short-term financial strength. If current

liabilities exceed current assets, then the company may have problems meeting its short-term

obligations.

8.1.2 Turnover Ratios:

1. Interest Cover Ratio:

It is a ratio used to determine how easily a company can pay interest on outstanding debt.

The interest coverage ratio is calculated by dividing a company's earnings before interest and

taxes (EBIT) of one period by the company's interest expenses of the same period. The lower

the ratio, the more the company is burdened by debt expense. When a company's interest

coverage ratio is 1.5 or lower, its ability to meet interest expenses may be questionable. An

interest coverage ratio below 1 indicates the company is not generating sufficient revenues to

satisfy interest expenses.

2. Fixed Asset Turnover:

A long-term, tangible asset is held for business use and not expected to be converted to cash

in the current or upcoming fiscal year, such as manufacturing equipment, real estate, and

furniture. A high fixed asset turnover is preferred since it indicates a better efficiency in fixed

assets utilization.


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3. Inventory turnover:

It’s a ratio showing how many times a company's inventory is sold and replaced over a

period. This ratio measures the stock in relation to turnover in order to determine how often

the stock turns over in the business. It indicates the efficiency of the firm in selling its

product. It is calculated by dividing the cost of goods sold by the average inventory.

Inventory represents one of the most important assets that most businesses possess, because

the turnover of inventory represents one of the primary sources of revenue generation and

subsequent earnings for the company's shareholders/owners. Possessing a high amount of

inventory for long periods of time is not usually good for a business because of inventory

storage and obsolescence costs. However, possessing too little inventory isn't good either,

because the business runs the risk of losing out on potential sales and potential market share

as well. The days in the period can then be divided by the inventory turnover formula to

calculate the days it takes to sell the inventory on hand or "inventory turnover days".

4. Debtors Turnover Ratio:

Indicates the relation between net credit sales and average accounts receivables of the years.

It’s also known as debtors’ velocity. This ratio indicates the efficiency of the concern to

collect the amount due from debtors. It determines the efficiency with which the trade

debtors are managed. Higher the ratio, better it is as it proves that the debts are being

collected very quickly.

5. ROCE:

Return on Capital Employed (ROCE) is used in finance as a measure of the returns that a

company is realizing from its capital employed. It is commonly used as a measure for

comparing the performance between businesses and for assessing whether a business

generates enough returns to pay for its cost of capital.

6. RONW:

Return on Net Worth is the ratio of net income after taxes to total net worth at the end of the

year. This ratio indicates the return on stockholder's total equity. Also known as Return on


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http://en.wikipedia.org/wiki/Returns_(economics)

http://en.wikipedia.org/wiki/Finance


equity which measures a corporation's profitability by revealing how much profit a company

generates with the money shareholders have invested.

8.1.2. RATIO ANALYSIS OF INDUSTRY

Though the value of debt to equity ratio depends on overall financial situation, goals,

employment security, risk aversion, tax implications, etc., the value of debt to equity ratio* in

Indian power industry is 0.75 which shows that there is 75 paisa debt for every 1 rupee of

share holders’ funds which is not a very high value and firms are moderately strong to meet

the repayment requirements. According to Central Electricity Regulatory Commission this

debt equity ratio should be improved to 2.33 for the purpose of tariff determination for a

particular company in the power sector. The long term debt equity ratio (0.73) is nearly equal

to the debt- equity ratio which shows that the companies of this sector are able to fulfill its

long term repayment requirements as efficiently as other liabilities and the business is not at

high risk.

In case of current ratio the rule of thumb says that the current ratio should be at least 2, that is

the current assets should meet current liabilities at least twice. In power industry the current

ratio* of 1.59 shows that it is less than required value, thus it is seen that this industry should

increase current assets and should control the current liabilities. In the power industry the

value of inventory turnover ratio* of 14.2 can also be said in the form of 365/14.2 = 25.7

days. The ratio shows a relatively high stock turnover which would seem to suggest that the

business deals in the field which require fast moving of its product i.e. electricity. Generally,

the higher the firm’s total asset turnover, the more efficiently its assets have been utilised.

Always high fixed assets turnovers are preferred since they indicate a better efficiency in

fixed assets utilization.

In case of Indian power industry a very low value (0.47) of fixed asset turnover* shows that

the fixed assets of the industry have not been utilized efficiently. The value of interest cover

ratio* is 2.96 is very impressive in Indian power sector. It shows that the firms in the industry

are strong enough to pay the interest expenses timely. The value of Return on capital

employed (8.79) is not very good return but with the high value of interest cover ratio and

slightly lower value of debt to equity ratio in the industry the return on capital is in the

moderately good condition.



*(For aggregate data refer to table of comparative ratio analysis top/bottom 5 companies)

8.1.3. FIVE YEARS’ RATIO ANALYSIS OF THE INDIVIDUAL COMPANIES IN INDIAN POWER SECTOR (2004-2008)

8.1.3.1. NTPC (National Thermal Power Corporation)

In NTPC the debt-equity ratio has not changed since 2004 as the values the change is only 0.01 during 2004 to 2006 and the change is 0.07 during next two years. This shows the lower level of financial leverage which is not a good sign for the company. However company’s profitability determines the debt equity ratio yet the high profitability of the company do not suggest such a lower value of debt equity ratio. It can be seen exactly same trend in the long term debt to equity ratio of NTPC.

Current ratio of the company is showing U-shape trend during 2004 to 2008 and like previous days company has again reached to good liquidity position. The fixed asset turnover ratio has shown 50% growth in last 5 years but it is still low and company should maximise its asset utilisation. A high debtor turnover ratio is showing the good debt collection ability of company. Interest cover ratio of the company is continuously increasing showing that the company is becoming stronger in the ability of meeting interest expenses.

Table.7: Ratio Analysis of NTPC (2004-08)

YRCNTPC200403

NTPC200503

NTPC200603

NTPC200803

Key RatiosDebt-Equity Ratio 0.42 0.42 0.43 0.50

Long Term Debt-Equity Ratio 0.42 0.42 0.43 0.50Current Ratio 2.39 1.65 1.86 2.23

Turnover RatiosFixed Assets 0.49 0.55 0.60 0.72

Inventory 10.75 12.84 12.92 14.21Debtors 2.92 24.65 24.00 17.62

Interest Cover Ratio 2.46 4.47 4.69 6.33PBIDTM (%) 54.72 43.06 42.66 38.38

ROCE (%) 17.24 14.14 15.11 15.72RONW (%) 13.03 14.85 14.86 14.36

Source: Derived from data available on Capitalline.

Inventory turnover of the company is showing the increasing capability of selling the

product but at the same time it can be observed that company’s profitability is decreasing

(decreasing profit %) and this trend can be attributed to the fact that company is not using


http://www.capitaline.com/user/backg.asp?mainopt=1&cocode=12001&Id=CBG





debt efficiently to enhance the business. As it is known that shareholders’ expectations are

quite higher than the interest on debt. The return on capital employed and return on net worth

are good in NTPC but it is not increasing; we can see slight decrease in the return.

8.1.3.2. PGC (Power Grid Corporation)

In Power Grid Corp. the debt to equity ratio is higher than that of NTPC but it is still not

very good. The company can take advantage of financial leverage as its profitability is very

high. However the return on capital employed and return on net worth are not good as

compared to NTPC. The decreasing current ratio during the last 5 years is showing increasing

current liabilities of the company which in turn has lowered company’s liquidity.

Table.8: Ratio Analysis of Power Grid Corp. (2004-08)

YRC

Power Grid

Corpn

200403

Power Grid

Corpn

200503

Power Grid

Corpn

200603

Power Grid

Corpn

200803Key Ratios

Debt-Equity Ratio 1.46 1.47 1.50 1.69Long Term Debt-Equity Ratio 1.46 1.44 1.44 1.62

Current Ratio 1.28 0.81 0.57 0.59Turnover Ratios

Fixed Assets 0.12 0.12 0.13 0.14Inventory 12.66 13.19 17.26 21.35Debtors 2.12 5.37 8.10 5.80


ROCE (%) 8.55 8.01 8.95 9.82RONW (%) 9.23 8.99 10.65 12.99


In Power Grid we can observe very low fixed asset turnover ratio which tells the under

utilisation of company’s fixed assets. The increasing Interest cover ratio is showing

company’s increasing capability of paying the interest which is a good sign for company’s

future financing ability in the financial market. A high debtor turnover ratio is showing the

good debt collection ability of company.

8.1.3.3. Reliance Infra











After increasing continuously the debt equity ratio of Reliance Infra has slipped between

2006 and 2008 and it is also very low, thus it suggests that with the two digit rate of return on

net worth company can think to raise the finance (if it is possible at low cost of capital) so

that by starting new projects profitability can be improved. Current ratio is satisfactory for

the company and it has good ability to meet current liabilities.

Table.9: Ratio Analysis of Reliance Infra (2004-08)

YRC

Reliance

Infra

200403

Reliance

Infra

200503

Reliance

Infra

200603

Reliance

Infra

200803Key Ratios





ROCE (%) 10.13 8.52 9.68 9.80RONW (%) 10.61 9.98 10.79 11.48


The fixed asset turnover has increased slightly but company should still do efforts to

increase the utilisation of its fixed assets. Inventory turnover is lower now as compared to

2004; however it is not very low as electricity is fast selling product. Interest cover ratio and

debtor turnover ratio are going down which is not good sign for the company and it is

showing company’s falling ability to meet the interest expenses and collecting the receivables

from debtors. The profitability is satisfactory which can be seen in PBIDTM and RONW of

the company.

8.1.3.4. TATA Power

The profitability of TATA Power is going down which can be seen by PBIDTM%, ROCE

and RONW. However the debt to equity ratio of the company is very low but with the

decreasing rate of return it cannot think for debt to increase the ratio. Inventory turnover ratio

and the debtor turnover ratio have not changed significantly and they are showing stability of

the firm.











The decreasing current ratio is not a good signal for suppliers and creditors of the

company, but at the same time company’s lenders can see the positive thing in the form of

increasing interest cover ratio. The return of the company is not very high but with the sales

turnover ratio size, company comes into top 5 companies of power sector in India.

Table.10: Ratio Analysis of TATA Power (2004-08)

YRC Tata Power Co. 200403

Tata Power Co.200503

Tata Power Co.

200603

Tata Power Co.

200803Key Ratios





ROCE (%) 14.70 9.81 8.99 7.67RONW (%) 10.78 7.37 8.70 8.12


The fixed assets of the company are not being utilised efficiently so there is scope for the

company for enjoying the operational leverage and the profitability can be improved.

8.1.3.5. Torrent Power

Company’s cost of capital seems to be high due its low debt to equity ratio as we know

that the shareholders’ expectations are always high as compared to the interest on debt.

However the debt to equity ratio of the company is very low but with the decreasing rate of

return in last two years it cannot think for debt to increase the ratio.

Table.11: Ratio Analysis of Torrent Power (2004-08)

YRCTorrent Pow.

200403

Torrent Pow.

200503

Torrent Power200609

Torrent Power200803

Key RatiosDebt-Equity Ratio 0.39 0.40 0.35 0.86

Long Term Debt-Equity Ratio 0.36 0.40 0.35 0.85



















ROCE (%) 10.67 19.46 15.87 8.39RONW (%) 7.99 16.15 9.08 7.55


Company’s current ratio is also very low showing its lower capability to meet current

liabilities. Long term debt to equity ratio is also very low. At the same time company is not

utilising its fixed assets efficiently which can be seen in the form of its fixed asset turnover

ratio.High inventory turnover ratio and debtor turnover ratio are sufficient to justify

company’s position on the top 5 companies of the industry. Profitability of the company is

satisfactory but it is not showing a satisfactory growth during last five years except in the

year 2005.

8.1.3.6. Indowind Energy

Indowind Energy has been able to increase its profitability during last 5 years but this

company comes in bottom 5 companies due to its sales turnover size. Company is

continuously increasing the value of debt to equity ratio by increasing the debts and enjoying

the financial leverage but its value is still very low which shows the future scope of

increasing the debt. But company presently is not in a condition of increasing the debt

because of its lower rate of return on capital employed.

Table.12: Ratio Analysis of Indowind Energy (2004-08)

YRC

Indowind

Energy

200406

Indowind

Energy

200506

Indowind

Energy

200606

Indowind

Energy

200806Key Ratios



Fixed Assets 2.63 0.93 1.08 0.47











Inventory 0.00 4.55 3.49 1.31Debtors 15.06 7.84 4.54 2.06


ROCE (%) 11.47 17.79 17.20 6.34RONW (%) 11.59 12.60 12.05 4.30


Current ratio of the company has been increasing sufficiently which is a good indication

for the suppliers and creditors. Inventory turnover ratio and debtor turnover ratio are not

showing positive trend and it is not good for the financial health of the company. Interest

cover ratio of the company has grown slightly showing satisfactory condition to the lenders

of the company. However the profit % has been increasing but company is not able to retain

the earnings as we can see it in the form of decreasing ROCE and RONW.

8.1.3.7. Energy Develop Co.

Debt to equity ratio of the company is going continuously down even after the increase in

the return and profitability (except 2008). Thus the company should improve the balance of

the capital structure and should enjoy the financial leverage. Exactly same trend can be seen

in the long term debt to equity ratio of the company between 2004 and 2008. Sharply falling

current ratio is a worrying situation of the company showing its inability to meet the current

liabilities. It’s a negative signal for the supplier and creditors.

Table.13: Ratio Analysis of Energy Develop Co. (2004-08)

YRC

Energy

Devlop.Co

200403

Energy

Devlop.Co

200503

Energy

Devlop.Co

200603

Energy

Devlop.Co

200803Key Ratios





ROCE (%) 9.67 13.42 14.88 26.72RONW (%) 4.68 14.60 17.97 20.39












Looking at fixed asset turnover ratio we can say that the company has increased the

utilization of fixed assets due to which it has become able to increase the rate of return

(ROCE and RONW). In 2008 company’s profit % has gone down significantly but returns

has been increased and inventory turnover has boosted which shows the firm’s ability to sell

effectively and retain the earnings.

8.1.3.8. GVK Power Infra

With the financial ratios it can be seen that however company’s profit% has grown

significantly yet company is not able to retain the earnings and the capital structure’s balance

is becoming worse. Debt equity ratio is going down which is showing the high cost of capital

in the form of equity. Return on capital employed and return on net worth are still low.

Table.14: Ratio Analysis of GVK Power Infra (2004-08)

YRC

GVK Power

Infra

200503

GVK Power

Infra

200603

GVK Power Infra

200803

Key RatiosDebt-Equity Ratio 9.37 0.20 0.16

Long Term Debt-Equity Ratio 9.12 0.20 0.00Current Ratio 1.61 7.68 1.68

Turnover RatiosFixed Assets 162.67 257.11 131.56

Inventory 0.00 0.00 0.00Debtors 9.57 16.18 7.73

Interest Cover Ratio 4.63 2.21 16.04PBIDTM (%) 55.60 163.79 386.10

ROCE (%) 8.73 7.55 8.36RONW (%) 39.38 3.88 8.78


Current ratio is also not satisfactory except in (2006). Debtor turnover ratio is good but

inventory turnover is creating doubt about company’s progress. Fixed assets of the company

are being utilized efficiently but during last two years fixed asset turnover ratio is showing

downward trend which is probably be due to enhancement of the asset side of the balance

sheet. The only positive signal is for the lenders in the form of higher interest cover ratio.








8.1.3.9. Jaiprakash Hydro

Looking at the good profit % and good rate of return (RONW and ROCE) we can say that

company should take advantage of financial leverage and should improve its capital structure

balance in the form of debt and equity. As the company’s debt to equity ratio is going down it

can be said that the overall cost of capital is increasing in the form of dividends and other

expectations of shareholders. Company’s inventory turnover is showing exceptional

movement downward in the year 2005.

Table.15: Ratio Analysis of Jaiprakash Hydro (2004-08)

YRC

Jaiprakash

Hydro

200403

Jaiprakash

Hydro

200503

Jaiprakash

Hydro

200603

Jaiprakash

Hydro

200803Key Ratios



Fixed Assets 0.36 0.19 0.17 0.18Inventory 2,857.33 214.03 59.82 53.78Debtors 6.01 2.42 1.68 1.31


ROCE (%) 12.50 11.38 11.14 13.91RONW (%) 11.48 9.23 12.49 15.80


Interest cover ratio has grown and reached to a satisfactory level providing good signal to

the lenders. Fixed assets of the company are under utilized as the fixed asset turnover ratio is

very low. Debtors turnover ratio is coming down which is an alarming situation for the

company to recover the debts given outside. Profit is however showing rosy picture but

return is not growing in accordance with it which shows company’s lesser ability to retain the

earnings.

8.1.3.10. KSK Energy

The ratio analysis of the company showing that company is facing a very tough time now

and not a single indicator is providing satisfactory picture of the financial health of the











company. Debt equity ratio is going down because return on investment is going down and

also the profit 5 is going down. Long term debt to equity ratio is also showing similar trend

to the debt to equity ratio. Significant downward movement of the current ratio is showing

company’s decreasing ability to meet current liabilities. Even after efficiently utilizing the

fixed assets company is not able to increase the earnings which can be seen in the form of

higher fixed asset turnover ratio and very low return on net worth (RONW).

Table.16: Ratio Analysis of KSK Energy (2004-08)

YRCKSK Energy

200603

KSK Energy

200803Key Ratios

Debt-Equity Ratio 0.83 0.49Long Term Debt-Equity Ratio 0.80 0.33

Current Ratio 3.78 1.45Turnover Ratios

Fixed Assets 7.75 11.65Inventory 0.00 0.00Debtors 0.00 0.00

Interest Cover Ratio 6.08 1.58PBIDTM (%) 148.22 98.62

ROCE (%) 14.98 7.86RONW (%) 18.47 3.31


In such a condition cannot go for debt also. Rather than using financial leverage and

operational leverage company should improve debtor turnover ratio and inventory turnover

ratio. So the financial health of the company can be improved. Also we can see that no lender

will allow debt to this firm easily because the interest cover ratio has come down

significantly.

8.1.4. Comparative Ratio Analysis of top 5 companies

The debt to equity ratio in the industry is 0.75 which is a moderately good value and can be

taken as a base to analyze different companies within the industry. As in case of NTPC

(0.50), Reliance Infra (0.58) and TATA Power (0.47) the value of debt to equity ratio is low,

showing a very low risk of business and an opportunity of financial leverage. In Torrent

Power the value comes at 0.86 which is slightly high than industry showing medium level of

risk but not a worrying situation. The only thing to be considered is that this excess equity is





assumed as an interest bearing debt by Central Electricity Regulatory Commission, thus

bringing down the effective ROE. In case of Power Grid Corp the value is more than double

the industry average which shows a higher value of debt to equity ratio. Central Electricity

Regulatory Commission (CERC) requires the debt-equity ratio of 2.33 for the purpose of

tariff determination, whereas the current debt-equity ratio of Power Grid is 1.69 which should

be improved.

Table.17: Comparative Ratio Analysis (Top 5 Companies)


We can also see the similar values of long term debt to equity ratio and overall debt to equity

ratio for each of the top five companies, which show that in NTPC (0.50), Reliance Infra

(0.51) and TATA Power (0.43) the value of long term debt to equity ratio is low, showing a

lower level of financial leverage. In Torrent Power the value comes at 0.86 which is slightly

high than industry showing medium level of financial leverage. In case of Power Grid Corp.

the value is more than double the industry average which shows a higher level of firm’s

financial leverage. The policy of Power Grid Corp. can be beneficial to the shareholders in

long run but at the same time it enhances the risk involved in the business.

In case of current ratio the current assets should meet current liabilities at least twice. In

NTPC (2.23) and Reliance Infra (2.41) we can see the favorable value of current ratio which


YRC AggregateNTPC200803

Power Grid Corpn200803

Reliance Infra200803

Tata Power Co.200803

Torrent Power200803

Key Ratios:

Debt-Equity Ratio 0.75 0.50 1.69 0.58 0.47 0.86

Long Term Debt-Equity Ratio 0.73 0.50 1.62 0.51 0.43 0.85Current Ratio 1.59 2.23 0.59 2.41 1.81 0.76Turnover Ratios: Fixed Assets 0.47 0.72 0.14 1.12 0.93 1.09Inventory 14.20 14.21 21.35 20.75 13.65 22.78Debtors 4.65 17.62 5.80 4.80 4.11 9.61Interest Cover Ratio 2.96 6.33 2.43 4.73 4.57 7.30PBIDTM (%) 35.38 38.38 91.41 27.36 18.28 16.10ROCE (%) 8.79 15.72 9.82 9.80 7.67 8.39RONW (%) 9.07 14.36 12.99 11.48 8.12 7.55







shows that both the firms are strong enough to meet their current liabilities but in TATA

Power (1.81) current ratio is moderately low. In case of Power Grid (0.59) and Torrent

Power (0.76) the value of current ratio is very low showing that the firms are not able to

handle the current liabilities efficiently.

Looking at the values of fixed asset turnover we see that Reliance Infra (1.12), Torrent Power

(1.09) and TATA Power (0.93) have higher value of fixed asset turnover comparative to the

industry which shows the optimality of utilization of fixed asset of these companies, in NTPC

(0.72) the value is still higher than industry but not impressive. The value of fixed asset

turnover is exceptionally low in case of Power Grid Corporation (0.14) which is the

indication of improper utilization of company’s fixed assets. Power Grid, Reliance Infra and

Torrent Power have high value of inventory turnover ratio which shows their high efficiency

of selling, while NTPC and TATA Power have inventory turnover values nearly equal to the

industry average (≈14.2) which is also good indication in selling efficiency.

A high interest cover ratio of companies shows higher ability to meet interest expenses.

However the interest cover ratio is high in all the 5 companies, the value of this ratio in

NTPC (6.33) and Torrent Power (7.30) is exceptionally high showing the strong ability of

companies to meet interest expenses. The debtors turnover ratio is high in all the companies

and it is exceptionally high in NTPC (17.62) which shows that debts are collected very

quickly. NTPC is leading the industry because return on capital employed ROCE (15.72) and

return on net worth RONW (14.36) are also very high in case of NTPC. Power Grid Corp

and Reliance Infra are also showing satisfactory value of these parameters while TATA

Power and Torrent Power are showing moderately low returns as compared to industry

average. PBIDTM % is highest in case of Power Grid Corp (91.41%) and the second

position is held by NTPC with 38.38% whereas Torrent power is showing lowest return

(16.1%) among all the 5 companies.

8.1.5. Comparative Ratio Analysis of Bottom 5 Companies

In the bottom 5 companies we can see that Indowind Energy and Jaiprakash Hydro has the

debt equity ratio slightly higher than the industry average which shows that the debt is not

high; however it depends on many factors like the interest rate, profitability etc. yet it is in



the easily acceptable range. GVK Power Infra and KSK Energy has very low debt equity

ratio which shows that these companies have opportunity to increase the debt to maximize

the profit without affecting the debt equity ratio adversely. In case of long term debt-equity

ratio we can observe that Indowind Energy and Jaiprakash Hydro have its value near to the

industry standards while KSK has comparatively very low value of it. Thus we can see here

the lack of financial leverage in the bottom companies of power sector.

Among the bottom five companies current ratio is highest in case of Indowind Energy (5.46)

showing its strong capability to meet current liabilities quickly. As the industry average

(1.59) in case of current ratio is not strong enough, we can observe that Jaiprakash Hydro has

the value near 2 which is favorable but others still need to increase the current ratio

especially Energy Develop Co and KSK Energy. An interesting comparison can be seen in

the fixed asset turnover ratio of the bottom 5 companies. It can be clearly seen that the

industry average is 0.47, Indowind Energy is equal to it, Energy Develop co is higher and

Jaiprakash Hydro is lower than the industry average while KSK (11.65) and GVK Power

Infra (131.56) have exceptionally high ratio which shows highest utilization of assets in GVK

Power Infra among all bottom five companies. The inventory turnover ratio is very low in

Indowind Energy, GVK Power Infra and KSK Energy while it’s favorably high in Jaiprakash

Hydro (53.78) as compared to the Industry average on the other hand it’s exceptionally high

in Energy Develop Co (109.57) which shows its very high capability to replace or sell the

inventory.

Table.18: Comparative Ratio Analysis (Bottom 5 Companies)

YRCAggrega

te

Indowind

Energy

200806

Energy

Devlop.Co

200803

GVK Power

Infra

200803

Jaiprakash

Hydro

200803

KSK

Energy

200803Key Ratios Debt-Equity Ratio 0.75 0.78 0.00 0.16 1.02 0.49Long Term Debt-Equity

Ratio0.73 0.69 0.00 0.00 0.88 0.33

Current Ratio 1.59 5.46 1.10 1.68 1.91 1.45

Turnover Ratios Fixed Assets 0.47 0.47 1.23 131.56 0.18 11.65Inventory 14.20 1.31 109.57 0.00 53.78 0.00Debtors 4.65 2.06 5.56 7.73 1.31 0.00Interest Cover Ratio 2.96 3.76 49.84 16.04 2.73 1.58















PBIDTM (%) 35.38 49.39 36.78 386.10 103.17 98.62ROCE (%) 8.79 6.34 26.72 8.36 13.91 7.86RONW (%) 9.07 4.30 20.39 8.78 15.80 3.31


Looking to the interest cover ratio we see that all the bottom 5 companies which were taken

for the study have the value of it greater than 1.5 so the performance of none of these is

questionable in terms of interest cover but we can see a big difference among all these. KSK

Energy has marginally acceptable value (1.58), Jaiprakash Hydro and Indowind Energy are

near to the industry average i.e. appreciable value. GVK Power Infra (16.04) and Energy

Develop Co (49.84) have very high values which show their very high capability of the

interest coverage. Looking to debtors turnover ratio we observe that the industry average is at

4.65, Indowind Energy, Jaiprakash Hydro and KSK Energy are not good in collecting the

debt as they have very low values while the performance of Energy Develop Co and GVK

Power Infra is very good in this field which have high value of debtors turnover ratio.

Return on capital employed is highest in Energy Develop Co (26.72%) showing a good

opportunity for the stakeholders and shareholders. Jaiprakash Hydro (13.91%) is also

showing good return on the capital employed. Indowind Energy and KSK Energy have lower

return than industry average while GVK Power Infra is reaching very close to the industry

average in the ROCE. A nearly similar variation can be seen in the return on net worth

RONW.

However the profitability is good in each of these companies as compared to the industry

average of PBIDTM% yet Energy Develop. Co is showing least profitability while GVK

Power Infra (386.10), Jaiprakash Hydro (103.17) and KSK Energy (98.62) are showing very

high PBIDTM% or a very high profitability.

Thus it is seen that every industry has different kind of strength and weakness in the power

sector. This analysis is done taking into account one parameter at a time; a complexity of

analysis is obvious when we take more than one parameters at a time.
















8.2. REGRESSION ANALYSIS

8.2.1.1. Definition:

Regression analysis is a Statistical Forecasting model that is concerned with describing and

evaluating the relationship between a given variable (usually called the dependent variable)

and one or more other variables (usually known as the independent variables).

Regression analysis refers to techniques for the modelling and analysis of numerical data

consisting of values of a dependent variable (also called response variable or measurement)

and of one or more independent variables (also known as explanatory variables or

predictors). The dependent variable in the regression equation is modelled as a function of

the independent variables, corresponding parameters ("constants").

Regression Analysis can predict the outcome of a given key business indicator (dependent

variable) based on the interactions of other related business drivers (explanatory variables or

independent variables). For example one can predict sales volume based on the amount spent



on advertising and the number of sales people one employs. Of course, a real model would

need more variables and is much more complex.

Regression analysis employs algebraic formulas to estimate the value of a continuous random

variable, called a dependent variable, using the value of another, independent, variable.

Statistical methods are used to determine the most correct estimate of that dependent

variable, and whether the estimate is valid at all.

The goal of regression analysis is to determine the values of parameters for a function that

cause the function to best fit a set of data observations that is provided. In linear regression,

the function is a linear (straight-line) equation.

8.2.1.2. Applications:

Regressions may be used for a wide variety of purposes where estimation is important. For

example, a marketer may employ a regression to determine how sales of products might be

affected by investments in advertising. An employer may perform a similar analysis to

estimate an employee's job evaluation scores based on the employee's performance on an

aptitude test.

Statistical technique used to establish the relationship of a dependent variable, such as the

sales of a company, and one or more independent variables, such as family formations, Gross

Domestic Product, per capita income, and other economic indicators .Bring exactly how large

and significant each independent variable has historically been in its relation to the dependent

variable, the future value of the dependent variable can be predicted. Essentially, regression

analysis attempts to measure the degree of correlation between the dependent and

independent variables, thereby establishing the latter's predictive value.



8.2.1.3. Variants Chosen:

Here in case of Power sector Sales is taken as Dependent variable, Transmission and

Distribution, Consumption of Electricity and Production of Electricity are taken as

Independent variables. Sales are predicted by using these independent variables. It is found

out that how the values of independent variables affect the value of dependent variable

(Sales).

8.2.1.4. Hypothesis:

H0: The null Hypothesis is that Transmission& Distribution, Consumption and Production

do not have any significant effect on the sales of the company.

H1: The alternate Hypothesis is that Transmission & Distribution, Consumption and

Production have significant effect on the sales of company.

8.2.1.5. Interpretation:

I. Energy Developement:

In case of Energy Development R square and Adjusted R square values are 0.998 and 0.993, Significance value is 0.052 which is > 0.050, therefore, Null Hypothesis is accepted.

Regression Equation : Sales = 290.655+0.007(TnD)+0.288(consumptn)+0.240(Prodn)

II. GVK Power:

In case of GVK Power R square and Adjusted R square values are 0.989 and 0.956, Significance value is 0.056 which is > 0.050, therefore, Null Hypothesis is accepted.

Regression Equation: Sales = 21.811-0.003(TnD)-0.197(consumptn)+0.257(Prodn)



III. Indowind Energy:

In case of Indowind Energy R square and Adjusted R square values are 0.591 and 0.635, Significance value is 0.042 which is < 0.050, therefore, Null Hypothesis is Rejected.

Regression Equation: Sales = 121.619+0.014(TnD)+0.214(consumptn)-0.454(Prodn)

IV. JP Hydro:

In case of JP Hydro R square and Adjusted R square values are 0.912 and 0.647, Significance value is 0.039 which is < 0.050, therefore, Null Hypothesis is Rejected.


V. KSK Energy:

In case of KSK Energy R square and Adjusted R square values are 0.997 and 0.990, Significance value is 0.067 which is > 0.050, therefore, Null Hypothesis is Accepted.

Regression Equation: Sales = 87.629+0.002(TnD)-0.318(consumptn)+0.489(Prodn)

VI. NTPC:

In case of NTPC, R square and Adjusted R square values are 0.991 and 0.998,

Significance value is 0.068 which is > 0.050, therefore, Null Hypothesis is Accepted.




VII. Power Grid:

In case of Power Grid R square and Adjusted R square values are 0.991 and 0.965,


Regression Equation: Sales = 5886.594-0.512(TnD)+14.895(consumptn)+32.493(Prodn)

VIII. Reliance Infrastructure:

In case of Reliance Infrastructure R square and Adjusted R square values are 0.983 & 0.933,


Regression Equation: Sales= 8055.025+0.068(TnD)+5.052(consumptn)+16.748(Prodn)

IX. Tata Power:

In case of Tata Power R square and Adjusted R square values are 0.935 and 0.739,

Significance value is 0.022 which is < 0.050, therefore, Null Hypothesis is Rejected.


X. Torrent:

In case of Torrent R square and Adjusted R square values are 0.826 and 0.306,

Significance value is 0.015 which is < 0.050, therefore, Null Hypothesis is Rejected.




8.3. TREND ANALYSIS

The term "trend analysis" refers to the concept of collecting information and attempting to

spot a pattern, or trend, in the information. In some fields of study, the term "trend analysis"

has more formally-defined meanings.

In project management trend analysis is a mathematical technique that uses historical results

to predict future outcome. This is achieved by tracking variances in cost and schedule

performance. In this context, it is a project management quality control tool.

The trend analysis of the Industry (power generation) is done here in two methods,

Exponential Trend Analysis

Moving Average Method

The factor considered by us for the Trend analysis is the power generation over the period of

years.

India's power generation has grown with nominal rate at 0.65% in December 2008 compared

with 3.90% increased in December 2007. Thermal, hydro and nuclear are three major source

of power generation. Thermal power generation recorded positive growth at 3.25% in

December 2008 however hydro and nuclear were recorded negative growth rate at 12.41%

and 21.62% respectively in December 2008 compared with December 2007.

In April-December 2008 power generation were recorded 2.57% growth compared with

April-December 2007.

There has been significant improvement in the growth in actual generation over the last few

years. As compared to annual growth rate of about 3.1% at the end of 9th Plan and initial

years of 10th Plan, the growth in generation during 2006-07 and 2007-08 was of the order of

7.3% and 6.33% respectively.



The electricity generation target for the year 2008-09 has been fixed at 744.344 BU

comprising of 631.270 BU thermal; 118.450 BU hydro; 19.000 BU nuclear; and 5.624 BU

import from Bhutan.

Table. 19: Trend in Power Generation in India

Power Generation in India in billion KWH in billion KWH

Year Gross Energy Generated (A)

Trend Analysis (Exponential) {F1=F0+0.2*(A0-F0)}

Trend Analysis (Moving Average Method)

1980 – 81 129.2 129.2 129.201981 – 82 131.1 129.2 131.101982 – 83 140.3 129.58 140.301983 – 84 151 131.72 133.531984 – 85 169.1 135.58 140.801985 – 86 183.4 142.28 153.471986 – 87 201.3 150.51 167.831987 – 88 219 160.67 184.601988 – 89 241.3 172.33 201.231989 – 90 268.4 186.13 220.531990 – 91 289.4 202.58 242.901991 – 92 315.6 219.94 266.371992 – 93 332.7 239.08 291.131993 – 94 356.3 257.8 312.571994 – 95 385.5 277.5 334.871995 – 96 418.1 299.1 358.171996 – 97 436.7 322.9 386.631997 – 98 465.8 345.66 413.431998 – 99 496.9 369.69 440.201999 – 00 532.2 395.13 466.472000 – 01 554.5 422.54 498.302001 – 02 579.1 448.94 527.872002 – 03 596.5 474.97 555.272003 – 04 633.3 499.27 576.702004 – 05 665.8 526.08 602.972005 – 06 672.4 554.02 631.872006 – 07 697.4 577.7 657.172007 – 08 704.47 601.64 678.532008 – 09 744.34 622.21 691.42

2009 – 10 projected 646.63 715.40



Source: Derived from the data collected economy survey of Indian power and then

formulated.

8.3.1. Output

Fig.7: Output of Trend Analysis – Exponential method (1980 – 2009)

Source: Derived from the table 19

Interpretation:

The output (Fig.7) shows that there has been gradual and continuous growth in power

generation in India, the trend analysis using exponential method also shows the similar curve

in growth, showing the projected power generation for the year 2008-09 in the growing

pattern.



Fig.8: Output of Trend Analysis – Moving Average method (1980 – 2009)

Source: Derived from the table 19

Interpretation:

The output (Fig.8) shows that there has been gradual and continuous growth in power

generation in India, the trend analysis using moving average method also shows the similar

curve in growth, showing the projected power generation for the year 2008-09 in the growing

pattern.



8.4. JUDGEMENTAL ANALYSIS

Power is one of the prime movers of economic development. The basic responsibility of

power supply industry is to provide adequate electricity at economic cost, while ensuring

reliability and quality of supply. Significant impetus by successive Governments has resulted

in increase in capacity from 1,300 MW during independence to more than 100,000 MW

today. Along with the growth in installed generation capacity, there has also been a

phenomenal increase in the transmission and distribution capacity. However, despite the

significant progress in capacity addition, the demand for electricity continues to outstrip

supply with the result that energy and peaking shortages continue to plaque the economy. The

per capita consumption is among the lowest in the World at 408 kwh/year (as on 2001).

With reforms in this sector gaining pace, many structural changes are taking place both at the

policy and technical levels. With the passing of the Electricity Act 2003, generation,

transmission and distribution sectors have been thrown open to competition along with the

ushering in of a de-regulated regime. The Government proposes to enhance public funding

for the sector as well as encourage the public sector undertakings to take up projects in joint

ventures with private investors and state governments in the 10th and 11th Plan period. There is

also a focus on initiating suitable policy measures to accelerate the pace of hydro power

development as well as to make nuclear power generation as competitive as power generation

from other fuels.

With responsibility for electricity supply shared constitutionally between the central

government and the states, the Government of India has placed increased emphasis on

improving the efficiency of supply, consumption, and pricing of electricity. Significant

reforms are being undertaken in power sector management and financing at the state level.

The Government of India, with World Bank assistance, has been encouraging the states to

undertake in depth power sector reforms. This involves distancing the state government from

operation of the power sector, establishing an independent regulatory framework for the



sector, progressively reducing subsidies and restoring the creditworthiness of the utilities

through financial restructuring and cost-recovery based tariffs, and divesting existing

distribution assets to private operators.

The Indian power sector is undergoing a crucial phase of transition. Both the Central and

State governments are actively engaged in finding viable solutions to achieve sustainable

development of the power sector. As of now, regulation, rapid capacity addition, and reforms,

with a specific focus on improving revenues from the distribution segment, are emerging as

important areas of reforms in the sector.

8.5. EXPERTS’ OPINION

An expert’s opinion or professional witness is a witness, who by virtue of education, training,

skill, or experience, is believed to have knowledge in a particular subject beyond that of the

average person, sufficient that others may officially (and legally) rely upon the witness's

specialized (scientific, technical or other) opinion about an evidence or fact issue within the

scope of their expertise, referred to as the expert opinion, as an assistance to the fact-finder.

Expert witnesses may also deliver expert evidence about facts from the domain of their

expertise.

The expert-opinion on various issues is discussed in the context of the present energy

shortage faced by the State. The experts participated in the Delphi survey unanimously

stressed on the urgent need for an integrated approach in the power sector planning process

of the State. They also emphasised on the imperativeness for exploiting the demand side

management potential of the State to alleviate energy crisis in future. The study fetched

informative and revealing results, which may aid to formulate and review future planning

strategies for the expansion of power sector of the State.

“India’s power sector needs investment to the tune of $ 120-160 billion to implement

structural reforms in the vital field”, says Power Minister Mr. Suresh Prabhu.


http://en.wikipedia.org/wiki/Fact

http://en.wikipedia.org/wiki/Evidence

http://en.wikipedia.org/wiki/Scientific_evidence_(law)

http://en.wikipedia.org/wiki/Skill

http://en.wikipedia.org/wiki/Training

http://en.wikipedia.org/wiki/Education

http://en.wikipedia.org/wiki/Witness


“We need more players and there is a need to generate investors’ interest,” the minister said,

stressing that private investment was possible in generation, transmission and distribution of

electricity in India. Mr Prabhu said the government plans to provide electricity to all

households by 2012.

Power Grid has bright future ahead: Experts

The future scenario of Power Sector in India is very good as many Indian MNCs are

venturing into Power Sector.

There will be a lot of private players including the Ambanis and Tata.But there is a lot of

scacity. Once the private players enter the fray, electricity will be available in plenty, but the

price would be around Rs.10 a unit. Many in the power sector believe that reforms are

necessary. "They are crucial to improving the State's financial health," a senior Government

official said.

The Managing Director of Bangalore Electricity Supply Company Ltd., Bharat Lal Meena,

agreed with the views of the official. "Reforms are the need of the hour. If we are to be made

more efficient in our functioning, we need to reform. Besides, that is the policy that we have

adopted. It cannot be changed now," he added.

Going by the activism shown by the government in 2001, the future raises hopes of a much

stronger power infrastructure in the country. The government has set an objective of

providing ‘Power for All’ by 2012. But funds are also required to back up the political will.

The government will require an investment of $200 billion to achieve its goal set in the 11th

Five-Year Plan for the power sector. This view has been echoed by industry experts as well as

government authorities closely associated with this sector.

"Of course, the development of the power sector will not be possible without private sector

participation," says Jayant Kawale, Joint Secretary, Ministry of Power. “India requires $500

billion in infrastructure, but the major share lies in power which is $200 billion, and it is the

least progressing sector compared to others. To overcome this crisis we have to add 50,000

mw every year, but this will happen only after the deficit is removed," says Lalit Jalan,

Director, Reliance Energy Ltd.



8.6. PORTER’S FIVE FORCE MODEL:

The model of pure competition implies that risk-adjusted rates of return should be constant

across firms and industries. However, numerous economic studies have affirmed that

different industries can sustain different levels of profitability; part of this difference is

explained by industry structure.

Porter’s model is based on the insight that a corporate strategy should meet the opportunities

and threats in the organizations external environment. Especially, competitive strategy should

base on and understanding of industry structures and the way they change.

Fig.9: Diagram of Porter’s Five Forces.

Source: http://faculty.css.edu/dswenson/web/525ARTIC/porter5forces.html

Porter has identified five competitive forces that shape every industry and every market.

These forces determine the intensity of competition and hence the profitability and


http://faculty.css.edu/dswenson/web/525ARTIC/porter5forces.html


attractiveness of an industry. The objective of corporate strategy should be to modify these

competitive forces in a way that improves the position of the organization. Porter’s model

supports analysis of the driving forces in an industry. Based on the information derived from

the Five Forces Analysis, management can decide how to influence or to exploit particular

characteristics of their industry.

8.6.1. Main Aspects of Porter’s Five Forces Analysis

The original competitive forces model, as proposed by Porter, identified five forces which

would impact on an organization’s behaviour in a competitive market. These include the

following:

The rivalry between existing sellers in the market.

The power exerted by the customers in the market.

The impact of the suppliers on the sellers.

The potential threat of new sellers entering the market.

The threat of substitute products becoming available in the market.

Understanding the nature of each of these forces gives organizations the necessary insights to

enable them to formulate the appropriate strategies to be successful in their market

8.6.2. PORTER’S FIVE FORCES ANALYSIS - POWER SECTOR IN INDIA

Table.20: FIVE FORCES ANALYSIS

Supply

Many projects have been planned but due to slow regulatory environment, the supply is far lesser than demand. Currently, India needs to double its generation. Many projects have been planned but due to slow regulatory environment, the supply is far lesser than demand. Currently, India needs

to double its generation capacity to meet the potential demand.Demand The long-term average demand growth rate is 6%.

Barriers to Entry

Barriers to entry are high, as entering this business requires heavy investment initially. The other barriers are fuel linkages, payment

guarantees from State Governments, Retail distribution licensed, etc.Bargaining Power to Suppliers

Not very high as Government controls tariff structure. However, this may change the future.

Bargaining Power of

Customers

Bargaining power of retail customers is low, as power is in short supply. However, Government is a big buyer and payment by Government can be

more erratic.Competition Not high currently. The Electricity Act, 2003 will encourage investments,



thereby increasing competition.Source: Derived from the study of Power sector in India .

8.7. SWOT ANALYSIS

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage

of planning and helps marketers to focus on key issues. SWOT stands for strengths,

weaknesses, opportunities, and threats.

The aim of any SWOT analysis is to identify the key internal and external factors that are

important to achieving the objective. These come from within the company's unique value

chain. SWOT analysis groups key pieces of information into two main categories:

Internal factors – The strengths and weaknesses internal to the organization.

External factors – The opportunities and threats presented by the external

environment to the organization

SWOT analysis is a flexible concept that can be used in various scenarios from assessing

projects or business ventures, making decisions, solving problems, evaluating candidates for

a position to marketing strategy formulation.

Fig.10: SWOT Analysis


http://faculty.css.edu/dswenson/web/525ARTIC/porter5forces.html


Source: http://www.excelsia.ch/htmlgb/blog/index.php?entry=entry090108-234052

The SWOT analysis provides information that is helpful in matching the firm's resources and

capabilities to the competitive environment in which it operates. As such, it is instrumental in

strategy formulation and selection. The following diagram shows how a SWOT analysis fits

into an environmental scan:

Fig.11: SWOT Analysis Framework



Environmental Scan

/\

Internal Analysis External Analysis

/ \ / \

Strengths Weaknesses Opportunities Threats

|

SWOT Matrix

Source: http://www.dolphinventures.com/swot_analysis.htm

STRENGHTS AND OPPORTUNITIES OF POWER SECTOR:

Well established and vast transmission and distribution network.

Highly qualified engineering and technical personnel.

Regulatory framework is further facilitated with enactment of Electricity Bill, 2003.


http://www.dolphinventures.com/swot_analysis.htm


The Electricity Bill, 2003 holds promises for the power sector and certainly for the

consumer by way of competition reliability and rationalized tariff structure.

Emergence of strong and globally comparable central utilities (NTPC,

POWERGRID).

India has substantial non-conventional energy resource base and technologies to meet

growing power requirements by tapping this energy.

WEAKNESSES AND THREATS TO POWER SECTOR:

Poor infrastructure has led to heavy T&D losses. Old and poor transmission and

distribution network has led to frequent power outages and poor quality of power

Lack of proper metering and theft has led to large scale losses. Only 51% of the power

generated is billed and only 41% is realized

Moreover, Government provides power to agricultural sector at subsidized rates and

also free of cost in some states. All these factors have resulted in financial disorder of

the State Electricity Boards (SEBs).

Restoration of SEBs financial health and improvement in their operating performance

continues to be a critical issue. The Government of India has signed a Memorandum of

Understanding (MOU) with various states reflecting the joint commitment of centre and

states to undertake reforms in a time bound manner

Poor return to utilities, which affect their profitability and capacity to make further

investments

Increasing gap between unit cost of supply & revenue, approximately Rs 1.10/ unit

Managerial and financial inefficiencies in state sector utilities have adversely affected

capacity addition and systems improvement

Non-availability of quality coal may hamper thermal plants’ efficiency in power

generation



Inability of SEBs to raise funds, as most of the SEBs is on the verge of bankruptcy due

to poor operational performance. Adding to the problems, SEBs need huge money to

measure up competition from efficient private players

The major risk of privatizing a critical sector like power is the precedence of

commercial over public interest. Some of these interests that will take a back seat

include development of environment friendly generation and provision of electricity for

rural areas. The new Electricity Act does not provide any specific financial incentives

for private players to address public issues

The SBEs which are right now holding 60% of total installed capacity, will be hit

adversely by some provisions of the new electricity act such as delicensing of

generation and open access for IPPs and CPPs, there by such units will take away the

most lucrative customers (like industrial and commercial users) from the SEBs. This

will not only affect SEB’s but also the entire power sector for near term.

CHAPTER 9

Issues and challenges



9. ISSUES AND CHALLENGES

9.1. While India has made impressive progress in the Power Sector since independence, it

has not been sufficient. In terms of generation, while new capacity has been added,

demand has far outstripped the supply leading to a widening gap. The primary reason of

the widening gap lies in the distribution link in the value chain. The generation

companies have not found it easy to recover their dues from their biggest buyers,

mainly the State Electricity Boards (SEBs). SEBs suffer huge financial losses every

year due to power theft and ineffective practices of billing and collection. Apparently,

the losses have reached an alarming Rs. 26,000 crore. It is clear that the biggest

fundamental issue hampering the viability of the Indian Power Sector is the sheer

volume or level of Transmission and Distribution (T&D) losses that amount to 25%, a

very high level by any standard. To make the matter worse, indirect calculations show

T&D losses to be much higher in the range of 40-50%. In addition, the distribution

system in India is often characterized by inefficiency, low productivity, frequent

interruption in supply and poor voltage.



9.2. The power supply position is characterized by shortages both in terms of demand met

during peak time and overall energy supply. The peaking shortage is much more in

every region and it is about 12% on all India basis. The energy shortages on regional

basis are varying in magnitude and overall shortage on all India basis is about 7%. To

meet the growing demand and shortages encountered in various regions, generation

capacity is required to be doubled in 10 years, so that the total demand both in terms of

peak and energy can be met

9.3. With the advent of economic liberalization in 1991, the power sector was the focus of

attention for attracting private investment specially FDI in generation. Eight fast track

projects were even offered counter guarantees for payment by the Central Government

in addition to the guarantees of the State Governments. By 1995-96, 57,000 MW of

projects were proposed by potential developers and 27,000MWhad received techno-

economic clearance from the Central Electricity Authority. These were all MOU based

projects with negotiated costs and tariffs. In the absence of a transparent process of

bidding, many of these had high costs. Due to lack of adequate payment security

mechanisms, combined in some cases with public perceptions of high cost in tariffs,

most of these projects did not get implemented. Since 1990 till date only 9922MWof

generation has come in the private sector.

9.4. The decade of the 1990s also saw the gradual deterioration of the financial health of

State Electricity Boards. Towards the latter half of 1990s, it was apparent that the

deterioration in the finances of the State Electricity Boards was becoming

unsustainable. Restoration of the financial health of the State Electricity Boards / State

Utilities was recognized as the most critical challenge facing the sector. In this context

it becomes clear that the distribution sector needed urgent attention if the trend of

deteriorating financial health had to be reversed. The reversal would need a

combination of the following key measures:-

a. Control of theft of electricity

b. Reduction in the cost of supply through reduction in technical losses.

c. Better management and lowering the cost of generation

d. Payment of user charge and Tariff rationalization



CHAPTER 10

CONCLUSION & FINDINGS



10. CONCLUSION & FINDINGS:

Power is one of the prime movers of economic development. The basic responsibility of

power supply industry is to provide adequate electricity at economic cost, while ensuring

reliability and quality of supply. Significant impetus by successive Governments has resulted

in increase in capacity from 1,300 MW during independence to more than 100,000 MW

today. Along with the growth in installed generation capacity, there has also been a

phenomenal increase in the transmission and distribution capacity. However, despite the

significant progress in capacity addition, the demand for electricity continues to outstrip

supply with the result that energy and peaking shortages continue to plaque the economy. The

per capita consumption is among the lowest in the World at 408 kwh/year (as on 2001).

With responsibility for electricity supply shared constitutionally between the central

government and the states, the Government of India has placed increased emphasis on

improving the efficiency of supply, consumption, and pricing of electricity. Significant

reforms are being undertaken in power sector management and financing at the state level.

With reforms in this sector gaining pace, many structural changes are taking place both at the

policy and technical levels. With the passing of the Electricity Act 2003, generation,

transmission and distribution sectors have been thrown open to competition along with the



ushering in of a de-regulated regime. The Government proposes to enhance public funding

for the sector as well as encourage the public sector undertakings to take up projects in joint

ventures with private investors and state governments in the 10th and 11th Plan period. There is

also a focus on initiating suitable policy measures to accelerate the pace of hydro power

development as well as to make nuclear power generation as competitive as power generation

from other fuels.

The financial weakness of the SEBs has been one of the major stumbling blocks in achieving

financial closure of Independent Power Producers (IPPs). The Government of India, with

World Bank assistance, has been encouraging the states to undertake in depth power sector

reforms. This involves distancing the state government from operation of the power sector,

establishing an independent regulatory framework for the sector, progressively reducing

subsidies and restoring the creditworthiness of the utilities through financial restructuring and

cost-recovery based tariffs, and divesting existing distribution assets to private operators.

The Indian power sector is undergoing a crucial phase of transition. Both the Central and

State governments are actively engaged in finding viable solutions to achieve sustainable

development of the power sector. As of now, regulation, rapid capacity addition, and SEB-

reform, with a specific focus on improving revenues from the distribution segment, are

emerging as important areas of reforms in the sector.

10.1. MAJOR FINDINGS:

Most of the SEBs though are supported by state government, are running under loss.

This is because of power theft, transmission losses, use of conventional methods for

power generation and transmission and out dated management policies.

Indian power sector has been witnessing a wide demand – supply gap. Although

electricity generation has increased substantially, it has not been able to meet the

demand.

India is going to build an additional capacity of 1 lakh MW by 2012 including private

sector contribution.

In a bid to bring structural transformations, necessary reform programs should be

carried out in distribution and transmission process.



India possesses a vast opportunity to grow in the field of power generation, transmission, and

distribution. The target of over 150,000 MW of hydel power germination is yet to be

achieved. By the year 2012, India requires an additional 100,000 MW of generation capacity.

A huge capital investment is required to meet this target. This has welcomed numerous power

generation, transmission, and distribution companies across the globe to establish their

operations in the country under the famous PPP (public-private partnership) programmes.

The power sector is still experiencing a large demand-supply gap. This has called for an

effective consideration of some of strategic initiatives. There are strong opportunities in

transmission network ventures - additional 60,000 circuit kilometers of transmission network

is expected by 2012 with a total investment opportunity of about US$ 200 billion.

REFERENCE



DATABASE:

• Capital line plus

• CEA

• Central Electricity Authority India

• Indiaenergyportal.org

• Ministry of Power

SEARCH ENGINES

• Google.com

• Askjeeves.com

• Soople.com

• Yahoo.com



WEBSITES:

• www.Ibef.org

• www.india.gov.in

• www.teriin.org

• www.coreinternational.com

• www.energywatch.org.in

• www.hansuttam.com

• www.elsevier.com

• www.sciencedirect.com

WEB PAGES:

• http://www.indexmundi.com/India/electricity_consumption.html

• http://www.indexmundi.com/India/electricity_production.html

• http://www.cea.nic.in

• http:// www.topnews.in/business-news/power-sector .html

• http://www.energywatch.org.in

• http://www.bharatbook.com/Market-Research-Reports/Indian-power-sector-

database.html

• http://www.marketresearch.com/product/display.asp?productid=1695991

ARTICLES & MAGAZINES

• http://recindia.nic.in/download/T_D_Overw.pdf

• www.wwf.org.uk/filelibrary/ pdf /ipareport. pdf

• www.ibef.org/Attachment/Investment%20opportunities%20in%20 Power %20 Sector . pdf

• http://www.adb.org/Documents/Studies/Timor-Power-Sector-Dev/default.asp

• www.appanet.org/files/ PDF s/RestructuringStudyKwoka1. pdf

• www.saneinetwork.net/ pdf /SANEI_II/Reforms_and_ PowerSector _in_SouthAsia. pdf


http://www.saneinetwork.net/pdf/SANEI_II/Reforms_and_PowerSector_in_SouthAsia.pdf

http://www.appanet.org/files/PDFs/RestructuringStudyKwoka1.pdf

http://www.adb.org/Documents/Studies/Timor-Power-Sector-Dev/default.asp

http://www.ibef.org/Attachment/Investment opportunities in Power Sector.pdf

http://www.wwf.org.uk/filelibrary/pdf/ipareport.pdf

http://recindia.nic.in/download/T_D_Overw.pdf

http://www.marketresearch.com/product/display.asp?SID=93839449-444172474-535718115&productid=1695991&SearchReturnURL=&StatURL=&CatReturnURL=

http://www.bharatbook.com/Market-Research-Reports/Indian-power-sector-database.html

http://www.bharatbook.com/Market-Research-Reports/Indian-power-sector-database.html

http://www.energywatch.org.in/

http://www.topnews.in/business-news/power-sector

http://www.cea.nic.in/

http://www.indexmundi.com/India/electricity_production.html

http://www.indexmundi.com/India/electricity_consumption.html

http://www.sciencedirect.com/

http://www.elsevier.com/

http://www.hansuttam.com/

http://www.energywatch.org.in/

http://www.coreinternational.com/

http://www.teriin.org/

http://www.india.gov.in/

http://www.Ibef.org/


• www.ebrd.com/projects/eval/showcase/psr. pdf

LITERATURE REFERENCE:

Augustine .A(2007), “Modeling Indian Power Sector”, pp: 173-181.www.cs.utexas.edu/~achal/ IndianPowerSector .pdf

Banerjee. R (2004), “Comparison of options for distributed generation in India”, Journal of Energy Policy, Elsevier - Article in Press, 6th June, 2004, Vol – 37 (1), pp: 1-11.http://www.whrc.org/Policy/COP/India/Banerejee_Energy%20Policy%20(in%20press).pdf

Kumar. S, A. Khetan & B. Thapa (2005),“Indian Power Sector – Emerging Challenges to Growth”. Reprinted from World Power, pp: 1-5.http://www.icfi.com/Markets/Energy/doc_files/indian-power-sector.pdf

Newbery. D ,(2005), ‘Power sector reform, private investment and regional co-operation’, Journal of South Asia: Growth and Regional Integration, pp: 143-170 http://siteresources.worldbank.org/SOUTHASIAEXT/Resources/Publications/448813-1171648504958/SAR_integration_ch6.pdf

Remes .M (2007), “Russia forerunning EU in power sector forum”, Journal of Baltic Rim Economies, Expert article 154, 21st December,2007, pp: 20-21http://www.tse.fi/FI/yksikot/erillislaitokset/pei/Documents/bre/expert_article154_62007.pdf

Schwartz. J (2008), “Lighting Update (ENERGY STAR, Legislation, Trends, Incentives and Opportunities)” Journal of Today’s Lighting Distributor, May/June 2008, pp: 12-13.http://www.icfi.com/Markets/Energy/doc_files/lighting-update-schwartz.pdf

Singh. A (2006), “Power sector reform in India: current issues and prospects”, Elsevier in its journal Energy Policy, Vol: 34 (16)http://ideas.repec.org/s/eee/enepol.html

Soronow. D, M. Pierce & K. Wang (2003), “The Power Sector Model”, Journal of NEWFRONTIERS, pp: 18-19. www.fea.com/resources/pdf/a_power_sector_model.pd f

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http://ideas.repec.org/s/icf/icfjgp.html



http://www.fea.com/resources/pdf/a_power_sector_model.pdf

http://ideas.repec.org/s/eee/enepol.html

http://ideas.repec.org/s/eee/enepol.html

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http://siteresources.worldbank.org/SOUTHASIAEXT/Resources/Publications/448813-1171648504958/SAR_integration_ch6.pdf

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http://www.gridwiseac.org/pdfs/forum_papers/117_paper_final.pdf

http://wpweb2.tepper.cmu.edu/ceic/SeminarPDFs/Tongia_CEIC_Seminar_4_8_03.pdf


Appendix

APPENDIX

Spss Outputs Regression Analysis

ENERGY DEVELOPMENT: Input Data for SPSS

Year Sales Transmission&disbn Consumption Production2004 7.29 3599 497.2 533.32005 8.5 3198 510.1 547.22006 12.98 2733 519 556.82007 61.68 4413 587.9 630.62008 65.74 6662 517.2 665.3

Output:

Variables Entered/Removed(b)



Mode

l

Variables

Entered

Variables

Removed Method1 prodn,

consumpt

n, TnD(a)

. Enter

a All requested variables entered.

b Dependent Variable: sales

Model Summary

Mode

l R R Square

Adjusted

R Square

Std. Error

of the

Estimate1 .999(a) .998 .993 2.41480

a Predictors: (Constant), prodn, consumptn, TnD

ANOVA(b)

Mode

l

Sum of

Squares Df

Mean

Square F Sig.1

Regressio

n3535.150 3 1178.383 2.081 .052

Residual 5.831 1 5.831 Total 3540.981 4



Coefficients(a)

Mode

l

Unstandardized

Coefficients

Standardized

Coefficients

B

Std.

Error Beta

T

Sig.



1

(Constant) 290.655 1.649 -14.076 .145TnD .007 .003 .374 2.485 .244Consumpt

n.288 .069 .344 4.189 .149

Prodn .240 .090 .467 2.652 .230

a Dependent Variable: sales

Regression Equation: Sales = 290.655+0.007(TnD)+0.288(consumptn)+0.240(Prodn)

GVK POWER: Input Data for SPSS

Output:


Mode

l

Variables

Entered

Variables

Removed Method




1 prodn,

consumpt

n, TnD(a)

. Enter



Model Summary

M

odel R

R

Square

Adjuste

d R

Square

Std. Error

of the

Estimate1 .995(a) .989 .956 1.70745


Anova(b)




Mode

l

Sum of

Squares Df

Mean

Square F Sig.1

Regressio

n264.284 3 88.095 0.217 .056

Residual 2.915 1 2.915 Total 267.200 4


Coefficients(a)

Mode

l

Unstandardized

Coefficients

Standardized

Coefficients

B

Std.

Error Beta

T

Sig.

1

(Constant) 21.811 4.600 1.494 .136TnD -.003 .002 -.587 -1.515 .141Consumpt

n-.197 .049 -.854 -4.042 .114

Prodn .257 .064 1.822 4.024 .145



INDOWIND ENERGY: Input Data for SPSS

Output:







Model Summary

Mode

l R R Square

Adjusted

R Square

Std. Error

of the

Estimate1 .769(a) .591 .635 0.26309


ANOVA(b)

Mode

l

Sum of

Squares df

Mean

Square F Sig.1

Regressio

n183.474 3 61.158 .482 .042

Residual 126.857 1 126.857 Total 310.332 4




Mode

l

Variables

Entered

Variables


consumpt

n, TnD(a)

. Enter


Coefficients(a)

Mode

l

Unstandardized

Coefficients

Standardized

Coefficients

B

Std.

Error Beta

T

Sig.

1

(Constant) 121.619 6.311 1.263 .026TnD .014 .013 2.528 1.066 .030consumpt

n.214 .321 .861 .666 .046

Prodn -.454 .422 -2.988 -1.078 .043



JP HYDRO: Input Data for SPSS

Output:





Mode

l

Variables

Entered

Variables


consumpt

n, TnD(a)

. Enter



Model Summary

Mode

l R R Square

Adjusted

R Square

Std. Error

of the

Estimate1 .955(a) .912 .647 0.35616


ANOVA(b)

Mode

l

Sum of

Squares Df

Mean

Square F Sig.1

Regressio

n1579.154 3 526.385 0.344 .039

Residual 152.675 1 152.675 Total 1731.828 4





Coefficients(a)

Mode

l

Unstandardized

Coefficients

Standardized

Coefficients

B

Std.

Error Beta

T

Sig.

1

(Constant) 159.016 5.657 1.505 .033TnD .028 .015 2.093 1.900 .008Consumpt

n.918 .352 1.565 2.607 .045

Prodn -.771 .462 -2.147 -1.668 .014



KSK ENERGY:

Input Data for SPSS


Year Sales Transmission&disbn Consumption Production2004 0 3599 497.2 533.32005 6.05 3198 510.1 547.22006 6.47 2733 519 556.82007 16.53 4413 587.9 630.62008 50.16 6662 517.2 665.3


Output:


Mode

l

Variables

Entered

Variables


consumpt

n, TnD(a)

. Enter



Model Summary

Mode

l R R Square

Adjusted

R Square

Std. Error

of the

Estimate1 .999(a) .997 .990 2.04206


ANOVA(b)

Mode

l

Sum of

Squares df

Mean

Square F Sig.1

Regressio

n1608.715 3 536.238 3.594 .067

Residual 4.170 1 4.170 Total 1612.885 4





Coefficients(a)

Mode

l

Unstandardized

Coefficients

Standardized

Coefficients

B

Std.

Error Beta

T

Sig.

1

(Constant) 87.629 7.462 -5.018 .125TnD .002 .002 -.191 -1.012 .246consumpt

n-.318 .058 -.563 -5.475 .315

Prodn .479 .076 1.383 6.273 .211


Regression Equation: Sales = 87.629+0.002(TnD)-0.318(consumptn)+0.489(Prodn)

NTPC:

Input Data for SPSS




Output:


Mode

l

Variables

Entered

Variables


consumpt

n, TnD(a)

. Enter



Model Summary

Mode

l R R Square

Adjusted

R Square

Std. Error

of the

Estimate1 1.000(a) .991 .998 1.390


ANOVA(b)

Mode

l

Sum of

Squares Df

Mean

Square F Sig.1

Regressio

n

2215869

34.1983

73862311.3

991.654 .068

Residual 109158.1

501 109158.150

Total 2216960

92.3484





Coefficients(a)

Mode

l

Unstandardized

Coefficients

Standardized

Coefficients

B

Std.

Error Beta

t

Sig.

1

(Constant) -62159.4

745.169 -22.002 .129

TnD -4.356 .396 -.906 -11.011 .258consumpt

n-77.689 9.411 -.370 -8.255 .277

Prodn 253.518 2.366 1.972 20.500 .131



POWER GRID:

Input Data for SPSS

Output:





Mode

l

Variables

Entered

Variables


consumpt

n, TnD(a)

. Enter



Model Summary

Mode

l R R Square

Adjusted

R Square

Std. Error

of the

Estimate1 .996(a) .991 .965 .42873


ANOVA(b)

Mode

l

Sum of

Squares df

Mean

Square F Sig.1

Regressio

n

3472515.

9893

1157505.33

01.612 .059

Residual 30775.24

01 30775.240

Total 3503291.

2304


b Dependent Variable: sale

Coefficients(a)




Regression Equation: Sales = 5886.594-0.512(TnD)+14.895(consumptn)+32.493(Prodn)

RELIANCE INFRASTRUCTURE:

Input Data for SPSS

Output:


Mode

l

Unstandardized

Coefficients

Standardized

Coefficients

B

Std.

Error Beta

T

Sig.

1

(Constant) 5886.59

40.089 -3.924 .159

TnD -.512 .210 -.848 -2.438 .248consumpt

n14.895 4.997 -.565 -2.981 .206

Prodn 32.493 6.566 2.010 4.948 .127




Mode

l

Variables

Entered

Variables


consumpt

n, TnD(a)

. Enter



Model Summary

Mode

l R R Square

Adjusted

R Square

Std. Error

of the

Estimate1 .992(a) .983 .933 0.95998


ANOVA(b)

Mode

l

Sum of

Squares df

Mean

Square F Sig.1

Regressio

n

5426864.

7043

1808954.90

119.709 .164

Residual 91784.75

11 91784.751

Total 5518649.

4554





Coefficients(a)

Mode

l

Unstandardized

Coefficients

Standardized

Coefficients

B

Std.

Error Beta

T

Sig.

1

(Constant) 8055.02

50.607 -3.109 .198

TnD .068 .363 .089 .187 .882consumpt

n5.052 8.630 .153 .585 .663

Prodn 16.748 1.340 .826 1.477 .379


Regression Equation: Sales= 8055.025+0.068(TnD)+5.052(consumptn)+16.748(Prodn)

TATA POWER:

Input Data for SPSS

Output:





Mode

l

Variables

Entered

Variables


consumpt

n, TnD(a)

. Enter



Model Summary

Mode

l R R Square

Adjusted

R Square

Std. Error

of the

Estimate1 .967(a) .935 .739 1.25545


ANOVA(b)

Mode

l

Sum of

Squares df

Mean

Square F Sig.1

Regressio

n

2192663.

4723 730887.824 1.775 .022

Residual 153080.8

251 153080.825

Total 2345744.

2974



Coefficients(a)



Mode

l

Unstandardized

Coefficients

Standardized

Coefficients

B

Std.

Error Beta

T

Sig.

1

(Constant) 441.374 5.621 .132 .016TnD -.166 .469 -.336 -.355 .033consumpt

n-12.785 1.145 -.593 -1.147 .036

Prodn 19.863 4.645 1.502 1.356 .024



TORRENT :

Input Data for SPSS

Output:



Year Sales Transmission&disbn Consumption Production2004 0 3599 497.2 533.32005 0 3198 510.1 547.22006 3831.52 2733 519 556.82007 1392.95 4413 587.9 630.62008 3628.65 6662 517.2 665.3


Mode

l

Variables

Entered

Variables


consumpt

n, TnD(a)

. Enter



Model Summary

Mode

l R R Square

Adjusted

R Square

Std. Error of

the Estimate1 .909(a) .826 .306 4.78687


ANOVA(b)

Mode

l

Sum of

Squares df

Mean

Square F Sig.1

Regressio

n

1166385

1.3353

3887950.44

51.588 .015

Residual 2448557.

9531

2448557.95

3

Total 1411240

9.2894



Coefficients(a)



Mode

l

Unstandardized

Coefficients

Standardized

Coefficients

B

Std.

Error Beta

T

Sig.

1

(Constant) -14238.7

450.473 -1.064 .048

TnD -3.147 1.874 -2.595 -1.680 .042consumpt

n-74.953 4.574 -1.416 -1.682 .034

prodn 116.640 8.569 3.596 1.991 .016


