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Power industry in India is third largest globally

The utility electricity sector in India had an installed capacity of 298 GW

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Definition / Scope

Electric Utility

Market Overview

The utility electricity sector in India had an installed capacity of 298 GW as of 31 March 2016. Renewable Power plants constituted 28% of total installed capacity and Non-Renewable Power Plants constituted the remaining 72%. The gross electricity generated by utilities is 1,106 TWh (1,106,000 GWh) and 166 TWh by captive power plants during the 2014–15 fiscal. The gross electricity generation includes auxiliary power consumption of power generation plants. India became the world's third largest producer of electricity in the year 2013 with 4.8% global share in electricity generation surpassing Japan and Russia

Key Metrics

Metrics Value Explanation
Base Year 2017 Researched through internet


Market Risks

1. Fuel Supply 2. Highly dependent on Coal Based Power plants 3. Environmental Issues 4. Capital Intensive 5. High Government Interference

Key Market Players

National Thermal Power Corporation Ltd (NTPC)

Background

Government of India (GoI) incorporated NTPC in 1975 as a thermal power generation company. Bulk sale of electricity forms NTPC's principal business, and accounted for around 97 per cent of revenues, as of March 2015. Power is sold through long-term PPAs, mainly signed with state distribution utilities. NTPC's installed capacity of 44,398 MW (including JVs), as on March 2015, represents around 16 per cent of India's overall capacity. Its share in total power produced in the country was 25 per cent in the same period. The company has undertaken backward integration measures and has also entered into related businesses, such as power trading and distribution. Joint ventures and subsidiaries NTPC has formed several JVs which include Utility Powertech Ltd (with Reliance Infra), NTPC Alstom Power Services Pvt Ltd (with Alstom Power Generation AG), NTPC Tamil Nadu Energy Co Ltd, Ratnagiri Gas and Power Pvt Ltd and PTC, among others. It also acquired a 50 per cent equity stake in SAIL Power Supply Corporation Ltd (SPSCL). The company has entered into a JV with BHEL to undertake EPC activities in power sector and manufacture and supply equipment for power plants.

NHPC Ltd

Background

NHPC was incorporated in 1975 following the government's amalgamation of three hydroelectric power projects that were being executed by the Central Hydroelectric Projects Control Board. Since then, NHPC has become the largest hydroelectric power developer in the country with 86 per cent of equity held by government. Its capabilities range from conceptualizing to commissioning hydroelectric power projects. All projects of the Company operate on a fixed return on equity of 15.5 per cent.

Current operations

In 2014-15, the company generated 22,038 MUs of power, around 20 per cent higher than 18,386 MUs generated in 2013-14. The company generated more power than the annual MoU target of 21,800 MUs for 2014-15. Moreover, its average Plant Availability Factor (PAF) for the year was nearly stable at 77.3 per cent in 2014-15 as compared to 77.7 per cent in 2013-14. The increase in generation was primarily on account of restoration of the Dhauliganga Power Station and full year of operation of plants commissioned in latter half of FY14 (Parbati III, Uri II, Nimoo Bazgo and Teesta Low Dam III projects). However, availability turned slightly lower due to an accidental fire that led to a forced shutdown at the Uri-II power station.


Nuclear Power Corporation of India Ltd

Background

Nuclear Power Corporation of India Ltd (NPCIL) is wholly owned by government of India under the administrative control of the Central government's Department of Atomic Energy (DAE). The company was set up with an objective of undertaking the design, construction, operation and maintenance of atomic power stations for generating electricity in pursuance of the schemes and programmes of the government, under the provision of the Atomic Energy Act, 1962. Nuclear power stations in India are designed, constructed, operated and maintained by NPCIL. Currently, NPCIL has 20 reactors under operation, which operate on a fixed return of 15 per cent on equity.


Neyveli Lignite Corporation Ltd

Background

Neyveli Lingnite Corporation Limited (NLC), incorporated in 1956, operates lignite mines and power stations in Tamil Nadu. The Government of India holds almost 90 per cent stake in the company. The company sells power generated through its power stations to the state of Tamil Nadu, Andhra Pradesh, Karnataka, Kerala and Puducherry.

Power Business

Neyveli Lignite Corporation Ltd (NLC) had three thermal power stations with an aggregate power generation capacity of 2,740 MW at the end of 2014-15. The first power plant of 600 MW capacity supplies almost its entire output to Tamil Nadu. The output of the other two plants TPS-I expansion (420 MW) and TPS-II (1,470 MW) is shared by Tamil Nadu, Karnataka, Andhra Pradesh, Kerala and Puducherry. The third plant of 250 MW (2 X 125) thermal power project in Barsingar supplies nearly its entire output to Rajasthan.

All of NLC's projects enjoy assured fuel supply with access to captive lignite mines and have a fixed return of 15.5 per cent. Moreover, these plants are pit-head which reduces the transportation cost and makes tariffs competitive.

In Q1 2015-16, the company commissioned 500 MW of capacity as a part of expansion at its Thermal Power Station - II in Tamil Nadu, taking overall capacity to 3,240 MW.


Power Grid Corporation of India Ltd Background Power Grid Corporation of India Ltd (PGCIL) was incorporated in 1989 to construct transmission lines, substations, load despatch centres and other facilities to transmit power from one region to another. PGCIL operates under the aegis of the Ministry of Power with 58 per cent stake of Government of India. In August 1998, it was accorded the status of a Central Transmission Utility (CTU). On May 1, 2008, the Government of India conferred 'Navratna' status to the company given its strategic importance to India's power sector and its role in developing and operating the national power transmission network.

PGCIL also holds 4 per cent stake in PTC, the entity responsible for promoting power trading in the country. Further, the company has diversified into the telecom business to utilise its spare telecommunications capacity by leveraging on its country-wide transmission infrastructure. The company is also engaged in project management and transmission related consultancy.

PGCIL operates under a favourable regulatory environment given that the company's existing power transmission business operates on a fixed RoE model, which ensures recovery of all expenses, including debt-servicing charges, provided the company maintains operational benchmarks.

Since January 2011, the government has transitioned to a mandatory tariff based competitive bidding for inter-state transmission projects from the previous fixed RoE model. As a result, the transmission sector, which was dominated by PGCIL, is now witnessing increasing participation from private players. However, PGCIL will continue to remain a dominant player as apart from a strong base under the fixed RoE model, the company has a pipeline of other fixed RoE projects which will help the company generate secured and steady cash flows in future.


Adani Power Ltd

Background

Adani Power Limited incorporated in June 2002, is a subsidiary of Adani Enterprises Ltd. The company was established with the objective of developing, operating and maintaining power generation and transmission projects in India. It has its headquarters in Ahmedabad, Gujarat. Apart from power, Adani Group has its presence across businesses like Infrastructure, Logistics, Port, Mining and Oil and Gas.

Current operations

The company has an installed capacity of 10,440 MW, which includes 1,200 MW thermal capacity of Udupi Power Corporation Limited acquired by the company during FY15. The company also entered into an agreement for the acquisition of Avantha Group's Korba unit (600 MW). This deal will increase Adani Power's total capacity to 11,040 MW. The company targets to achieve 20,000 MW capacity by 2020.

The company also acquired the Jitpur coal block in Jharkhand in the March 2015 coal block auctions with a capacity of 2.5 MTPA. However, it is yet to commence production in the block.

In 2014-15, overall generation of Adani Power increased by 18 per cent y-o-y to 50.7 billion units on account of higher PLFs at the Mundra power plant and commissioning of the 660 MW (fifth unit) at Tiroda.


CESC Ltd

Background CESC Limited is a flagship company of RP-Sanjiv Goenka Group, and is into the generation and distribution of electricity in Kolkata. It has also diversified into retail (Spencer's) and ITes (through an acquisition of First source solutions in October, 2012). CESC distributes power to 2.8 million customers across, Kolkata and West Bengal.


GMR Infrastructure

Background and current operations

GMR has a portfolio of 18 power projects of which seven are currently operational. It operates around 2,486 MWs spread across coal, gas, hydro, renewable energy and power transmission; power projects of about 4,800 MWs capacity are under construction and planning. The power sector portfolio has a mix of merchant and long-term power purchase agreements (PPA).

The 550 MW Emco power plant, has an FSA (Fuel Supply Agreement) with CIL and PPA with Maharashtra, Dadra & Nagar Haveli and Tamil Nadu distribution utilities. For the Kamalanga power project, the company has PPA with Haryana, Bihar and Odisha. However, it has a FSA for only 500 MW out of its total 1,050 MW capacity .

The company also acquired two coal blocks during the first half of 2015. These include a 3 MTPA mine at Talabira, Orissa and a 4 MTPA mine at Ganeshpur, Jharkhand. The Talabira mine is already operational, while the Ganeshpur mine is expected to commence production by FY17.


Jaiprakash Power Ventures

Background

Jaiprakash Power Ventures Ltd (JPVL), a subsidiary of Jaiprakash Associates Ltd was incorporated in 1994 and is present in the power generation business with a combination of hydro and thermal power projects. The company is also present in the power transmission business through its subsidiary Jaypee Powergrid Ltd.


Jindal Power Ltd

Background and Current operations

Jindal Power Ltd (JPL) a subsidiary of JSPL, is part of the Jindal Group led by Mr. Naveen Jindal. Jindal Power Ltd has an overall power generation capacity of 3,400 MW at its Tamnar facility in Chhattisgarh, which is divided into three end-use projects (EUPs) - EUP I: 1,000 MW, EUP II: 1,200 MW and EUP III: 1,200 MW.

Operational performance Total power generation increased to 10,636 million units in 2014-15 as against 8,282 million units in 2013-14. PLFs, however, declined to 35.33 per cent during the year as compared 92 per cent in the previous year on account of the commissioning of the 2,400 MW Tamnar-2 plant which had a PLF of only 20 per cent in 2014-15.

JPL's revenue increased 36 per cent y-o-y to Rs 57 billion in 2014-15, mainly on account of higher PLFs in EUP I and the commissioning of operations at EUP II. As a result, EBITDA margins rose by 250 bps to 49.8 per cent in 2014-15.

JSW Energy Ltd

Background

JSW Energy, a part of the JSW Group, was incorporated in 1994 and began commercial operations in 2000. The company is an integrated power company with interests in the generation, mining, trading and transmission businesses. It has entered into a JV with Toshiba to manufacture supercritical steam turbines and generators.

As of November 2015, JSW Energy has 4,531 MW of generating capacity. The Barmer plant's captive mine at Kapurdi in Rajasthan commenced production in October 2011 and has a capacity of 3.75 mtpa, which can meet the fuel requirements of four units with a total capacity of 540 MW. The company has sought approval from the Ministry of Coal to enhance the capacity of the lignite mine to 7 mtpa in order to support generation at the balance 4 units of its Barmer plant which have commissioned in Q4 2012-13.

The company is implementing a run-of-the river hydro power project at Kutehr in Himachal Pradesh for which it has received all clearances. The project has incurred an expenditure of Rs 2.4 billion as of June 2015.


Reliance Power Ltd

Background

Reliance Power Ltd/ part of Reliance-ADA (Anil DhIrubhai Ambani) group, was incorporated in 1995 as a power utility. The company owns and operates 5,945 MW of generation capacity in the country with another 2.4GW capacity under construction. Reliance Power has diversified into renewable energy as well, with 185 MW of solar and wind capacities. The company operates the Sasan ultra-mega power plant (UMPP), which has been fully commissioned in 2014-15.


Tata Power Co Ltd

Company Overview

Mumbai-based Tata Power Co. Ltd/is a fully integrated private player in the power sector. It has a licence to supply power to bulk and residential consumers in Mumbai and Delhi. Tata Sons is the largest shareholder in Tata Power. The company's total generation capacity is 8,726 MW. Its principal generating plants are located in Mundra (4,000 MW) and Trombay (1,580 MW). The company is currently executing projects with a total capacity of 764 MW, and capacities of 9,105 MW are in a planning stage. The company has a 51:49 joint venture (JV) with Power Grid Corporation for the 1,166-km Tala Transmission Project. It has also entered into a JV with the Delhi government for power distribution.


Torrent Power Ltd

Background and current operations

Torrent Power AEC Ltd (TPAL), Torrent Power SEC Ltd (TPSL) and Torrent Power Generation Ltd (TPGL) (transferor companies) were amalgamated into Torrent Power Ltd (TPL), with the capital of the company reorganized, effective from April 1, 2005.

TPL is in the business of generation and distribution of power. The company distributes power to around 2.87 million customers in the cities of Agra in UP and Bhiwandi in Maharashtra through distribution franchisee route and in Ahmedabad and Surat in Gujarat through the license route. TPL has also been selected as the distribution franchisee for Kanpur circle in Uttar Pradesh. As of March 2015, TPL had a total installed capacity of 3,253 MW.

Distribution business

The overall power sales of the company in 2014-15 were 14,072 MU as against 13,246 MUs during the previous year, a 6 per cent rise led by higher sales in its Ahmedabad and Surat plants.

Ahmedabad and Surat: The sales were higher at 9,759 MUs in FY 2014-15 as against 9,235 MUs during the previous year. The growth of 5.7% was mainly on account of higher sales owing to prolonged summer and shorter monsoon as compared to the previous year. Bhiwandi: The sales were higher at 2,955 MUs in FY 2014-15 as against 2,760 MUs during the previous year; a growth of 7.1%. This growth was partially due to base effect owing to lower sales in the previous year due to a 15 days strike, by Powerloom Industry, against levy of additional charges. Agra: The sales were higher at 1,358 MUs in FY 2014-15 as against 1,283 MUs during the previous year; a growth of 5.9% mainly due to increase in consumer base and reduction in T&D loss. In a first of its kind distribution model in the country, TPL was selected as the distribution franchisee for the Bhiwandi circle in Maharashtra, by the Maharashtra State Electricity Distribution Co Ltd in December 2006. TPL has been able to reduce its aggregate technical and commercial (AT&C) losses in this circle from 65 per cent to around 25 per cent in 2014-15. However, this was higher compared to 22.7 per cent in 2013-14, given agitation against tariff hikes.


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