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PowerSector Power Sector India

March2009

ExecutiveSummary
Market Overview& ValueChain Value Chain
Indiahas5th largestelectricitygenerationcapacityintheworld TheinstalledcapacityofIndiaasofJuly2008was145,587MW Indiaisfacingacutepowerdeficitwithpeakpowerdeficitofabout16% P Powertradingisstillatnascentstagewithmerely3.5%ofthepowergeneratedtradedin200708 t di i till t t t ith l 3 5% f th t d t d d i 2007 08 Distributionisprimarilycontrolledbystateelectricityboards(SEBs) Governmentpoliciesareaimedatencouraginginvestmentinthesectorandincreasingthe competition Governmentallows100%FDIundertheautomaticapprovalrouteinallsegmentsoftheindustry (exceptatomicenergy) 5yeartaxholidayisgivenforpowergeneratingprojects Importdutyattheconfessionalrateof20%hasbeensetforimportofequipment KeyTrends:Increaseinpercapitaconsumptionofelectricity, Increaseincorporateinvestments, IncreaseinFDI,increasinginterestshownbyPE/VCfirmsinpowersectorandsurgeincaptive production Challenges:Shortageofcoal,powerlossintransmissionanddistribution,ageingandimproperly Challenges: Shortage of coal, power loss in transmission and distribution, ageing and improperly maintainedinfrastructure PublicsectorundertakingsLIKENTPC,MHPCholdthemajorityofthetotalinstalledcapacity PrivateplayersincludingReliance,TataPower,TorrentPowerhavepresenceacrossvaluechain andmakingsignificantinvestmentsinpowersector and making significant investments in power sector ForeignplayerslikeCLP,MarubeniCorporationhaveentered/planningtheIndiapowermarket
POWERSECTOR INDIA.PPT

Government Government Policies& Incentives

KeyTrends& Challenges

Competition

Introduction PowerSector Overview ValueChainAnalysis GovernmentPoliciesandInitiatives KeyTrends&Challenges CompetitiveLandscape y p KeyDevelopments Appendix

POWERSECTOR INDIA.PPT

Indiaisamongthetopelectricitygeneratingcountriesinthe world
Introduction
Indiarankssixthlargestenergyconsumerin theworld Indiaconsumes3.7%oftheworlds commercialenergy Electricityisthebackboneofthenationand fallsundertheConcurrentListwhereboththe falls under the Concurrent List where both the UnionandStateGovernmentcanregulatethe sector Countryisdividedintofiveregionsfor transmissionsystems: transmission systems:
0 10,000 20,000 30,000 40,000 50,000

Region WiseInstalledCapacity

North 38,155MW

NorthEast h 2,255MW East 20,816MW

Western 44,628MW 44, 628 MW

North West South East NorthEast


2,255 , 20,816

MW
38,156 44,628 44 628 39,656
South 39,656MW

*Ason310708

POWERSECTOR INDIA.PPT

Introduction PowerSector Overview ValueChainAnalysis GovernmentPolicies&Initiatives KeyTrends&Challenges CompetitiveLandscape y p KeyDevelopments Appendix

POWERSECTOR INDIA.PPT

Installedcapacityhasbeenincreasingcontinuouslytomeetthe needofgrowingeconomy..
SupplySide
Indiahas5th largestelectricitygenerationcapacityin theworld Installedcapacityof145,587MWasofJuly2008
Nuclear Renewable Gasbased 8% 10% 3% Hydelpower Hydel power 25% 64% Thermal

PlanwiseInstalledCapacity
MW 140,000 120,000 100,000 80,000 60,000 Plan VII VIII IX X
69,480 85,902 104,917 126,082

DemandSide
Demandforpowerisgrowingat810%perannum Demandhasfivekeycomponents:
Industry,commercial,residential,agriculture,andothers

Currentandprojecteddemand
MW
250,000 200,000 157,107 , 150,000 100,000 50,000 0 0 115,705 500 1,000 1 000

Energy Required Planned Demand

bn units
212,725 1,500

Keydriversofincreasingdemandaregrowthin: y g g
Householdconsumption Electrificationofruralareas Manufacturinggrowingfaster Realizationofsuppresseddemandduetoloadshedding

Requiredinvestmentof~USD600bnby2017

XI

XII

POWERSECTOR INDIA.PPT

..butIndiastillfacingacutedemandsupplygap
DemandSupplyGap
Powersupplypositioncharacterizedbyshortages bothintermsofdemandmetduringpeaktimeandoverall energysupply PeakpowerdeficitinIndiaisabout16%andisexpectedtoriseto20%by2017 Demandsupplygapismorethan16%
ActualPowerSupplyPositionduring200607(EndofXthPlan) Peak Requirement 100,715MW Availability 86,818MW Shortage 13,897MW Shortage(%) 13.8% Requirement 690,587MU Energy Availability 624,495MU Shortage 66,092MU Shortage(%) 9.6%

PeakShortages P k Sh t
(%)
20 15

Energy E
BU
800 600 400 200 0

10 5 0 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Average Energy Demand Generation Plan VI VII VIII IX X

POWERSECTOR INDIA.PPT

Introduction PowerSector Overview ValueChainAnalysis GovernmentPolicies&Initiatives KeyTrends&Challenges CompetitiveLandscape y p KeyDevelopments Appendix

POWERSECTOR INDIA.PPT

PublicsectorcompaniesorStateElectricityBoards(SEB)have presenceacrossthevaluechain
Raw materials

Generators

Powergenerationdependsoncoal,gas,nuclearandhydroelectricsources Coalaccountsfor50%ofthegenerationcapacity

Traders

Power trading company buys power from surplus area and sells it in deficit Powertradingcompanybuyspowerfromsurplusareaandsellsitindeficit areausingandtransferspowerthroughtransmissionlines PowertradingisataverynascentstageinIndia

Transmission

Transmissionofelectricityinvolvesbulktransferofpoweroveralong distanceathighvoltage(132kVandabove)

Distribution

Distributioninvolvessupplyofpowertoendconsumers Italsoincludesbillingandcollectionservices

Enduser End user

POWERSECTOR INDIA.PPT

Powergenerationcapacityhasincreasedovertheyears
Generation Trading Transmission Distribution

Generation Overview
Powergenerationincreasedfrom662.5bn units(BU)in200607to704.5BUin200708 Theelectricitygenerationtargetfortheyear 200809hasbeenfixedat774.4BU:
Thermal 631.3BU Hydro 118.5BU Hydro 118 5 BU Nuclear 19.0BU ImportfromBhutan 5.6BU

PowerGenerationGrowth
BU
800 700 600 500 400 300

Nuclear Hydro Thermal 616 587 3% 558 3% 3% 14% 16% 13% 84% 2003-04 83% 2004-05 81% 2005-06 659 3% 17% 704 2% 18%

80%

80%

Stateaccountsforalargeshareofinstalled capacity(53%),followedbycentral(34%)and capacity (53%) followed by central (34%) and privatesector(14%) Theplantloadfactor(PLF)ofgenerating plantshasimprovedconsistentlyoverthelast fewyears f

2006-07

2007-08

PlantLoadFactor Plant Load Factor


%
80 78 76 74 72 70 2003-04

78.6% 76.8% 74.2% 72.7% 74.0%

2004-05

2005-06

2006-07

2007-08

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PowertradingisstillatnascentstageinIndia
Generation Trading Transmission Distribution

Trading Overview
Merely3.5%ofthepowergeneratedin200708was tradedinIndia
Power Trading Corporation of India (PTC) was the first PowerTradingCorporationofIndia(PTC)wasthefirst companytostartwithtradingofpower Outofthe42licensesissuesin2004,only13ofthe licensesactuallytradedin200708 Currentnormsrequireanapplicanttohavenetworthof Rs1.5croreforallotmentoflicense,whichgiveshimthe rightofpowertradingofupto100mnKWh

MarketSharePowerTrading(200708)
Adani Power 6% Others 22% 46% PTC Tata Power 10% 16% NTPC Vidyut Vyapar Nigam

OnlinetradinginIndiastartedwithIndianEnergy Exchange(IEX),launchedinJune,2008
FinancialTechnologiesisthemajorstakeholderwith90% share

VolumeofPowerTransacted
TotalEnergy Transacted(till05 122008) 1470.30MU 26.96MU MarketClearingPrices Maximum INR11.00 INR11.00 Minimum INR0.92 INR3.00

Secondpowertradingexchange,PowerExchange Indialtd(PXI),waslaunchedinOctober2008
PXIispromotedbyNationalStockExchangeofIndiaLtd (NSE)&NationalCommodities&DerivativesExchangeLtd (NCDEX) Exchange IEX PXI

Inordertopromotetrading,powerregulatorswill reviewin2009the4paiseaunitcaponpower tradingmargins


Weightedaveragepurchasepriceandsalespriceof powerin200708wereINR4.48akWhandINR4.52a kWh,respectively k h i l

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Transmission&DistributionnetworkofIndiaisthethirdlargest intheworld
Generation Trading Transmission

Distribution

Transmission Overview
Currenttransmissioncapacityis143,000MWand interregionalpowertransfercapacityof17,000MW MoPplanstoestablishanintegratedNationalPower Gridinthecountryby2012with200,000MWof Gridcapacityand37,700MWofinterregional powertransfercapacity Government is encouraging private sector Governmentisencouragingprivatesector participationintransmissionsector
Transmissionsectoris100%openedforprivate participationonaBuild,OperateandTransfer(BOT)basis Currently,privatesectorparticipationintransmission projectsisintheformofJVwithPowerGridCorporation ofIndiaLtd(PGCIL)

TransmissionNetwork
ckm
400,000 325,000 325 000 300,000 200,000 100,000 0 2,700 67,000 172,000 265,000

1950

1970

1990

2008

2012

ProposedInvestmentsinTransmission Proposed Investments in Transmission *


USDbn
InterState IntraState Total

ThePlanningCommissionofIndiaexpects investmentsworthUSD25bn(INR1,292bn)for transmissioninXIthPlanagainstatargetplan g g p estimateinvestmentofUSD9bn(INR457bn)inXth Plan


PlanningCommissionhastakena15%cutontheinitial estimatesinXIthPlan,whichwasUSD30.2bn(INR1,520 bn)

Center 12.3 0 12.3

State 0 10.9 10.9

Private 4.0 3.0 7

Total 16.3 13.9 30.2

*Plannedinvestmentsbefore15%cut

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SEBscontrolthedistributionwiththepresenceoffewprivate players
Generation Trading Transmission

Distribution

Distribution Overview
DistributionofelectricityiscontrolledbyState ElectricityBoards(SEBs) Few private players like Reliance and Tata are also FewprivateplayerslikeRelianceandTataarealso presentinelectricitydistribution
Distributionlicensesofseveralcitiesarewithprivate sectorplayers

AggregateTechnical&CommercialLosses
% 38.9% 40 38 9% 35 30 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 AT&C Losses 36.6% 34.9% 34.8% 35.2% 33.1%

DistributionsysteminIndiaischaracterizedbyhigh AggregateTechnicalandCommercial(AT&C)losses A t T h i l dC i l (AT&C) l


AT&Clossesaredecliningbutstillonhigherside comparedtoothercountries Mostofthetechnicallossesareduetopoortransformers, improperloadmanagement,pilferage,lowvoltage distributionlinesetc distribution lines etc

BillingandCollectionEfficiency
%
100 90 80 70

Distributionsectorisalsocrippledwithpoorbilling andcollectionefficiency AreductioninT&Dlossesby1%pointisestimated tobeequivalenttopowergeneratedfroma600700 MWplant MW plant GovernmentintroducedtheAPDRP(Accelerated PowerDevelopmentandReformsProgram)tofund investmentsandalsoofferincentivesforefficiency improvements GovernmentplanstoinvestRs287,000crorein powerdistributioninXIthPlan

Collection Efficiency 95.2% Billing Efficiency 94.2% 93.9% 93.0%

90.9% 92.7%

67.3% 68.4%

68.4%

69.5%

69.7%

71.0%

60 2001-02

2002-03

2003-04 2004-05

2005-06

2006-07 13

POWERSECTOR INDIA.PPT

Introduction PowerSector Overview ValueChainAnalysis GovernmentPolicies&Initiatives KeyTrends&Challenges CompetitiveLandscape y p KeyDevelopments Appendix

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Governmenthasbeentakingpositivestepsbyintroducingnew policiesandregulations..
Policies(1/2)
AcceleratedPowerDevelopmentandReformProgram(APDRP)launchedin 2001withtheobjectiveof: j APDRP
reducingT&Dlossesto15%infiveyearsinurbanandhighdensityareas reducingpoweroutageandraisingcollectionefficiency

Restructuredtoachievetheobjectiveof15%lossbyendoftheXI5yearPlan CentralgovernmenthasearmarkedanoutlayofINR8billionforAPDRPforFY09 Removed/reducedentrybarriers ElectricityAct 2003


Delicensedgeneration Freedomtocaptivegeneration R Recognizedtradingasanindependentactivity i d di i d d i i Openaccessintransmissionalreadyinplace

Multiplelicensesindistribution Totalvillageelectrificationby2010 l ll l f b AccesstoElectricityAvailableforallhouseholdsinnextfiveyears Percapitaavailabilityofelectricitytobeincreasedtoover1000unitsby2012 Fulldevelopmentofhydropotentialofthecountry DevelopmentofNationalGrid

National ElectricityPolicy 2005

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..andgivingbetterincentivestoencourageinvestmentinpower sector
Policies(2/2)
TariffofGenerationandTransmissionProjectsinPrivateSectordetermined throughcompetitivebidding through competitive bidding Reductionofcrosssubsidyto 20%ofaveragetariffinnextfiveyears FacilitatingOpenAccessinDistribution TimeboundintroductionofMultiYearTariff

TariffPolicy2006

Incentives
100% foreign equity participation is allowed under the automatic approval route in all segments of the industry 100%foreignequityparticipationisallowedundertheautomaticapprovalrouteinallsegmentsoftheindustry (exceptatomicenergy) Generationanddistributionpowerprojectsofanytypeandsizeareallowed Arenewablelicenseperiodof30yearshasbeenset Returnonequityupto16%isassuredat68.5%PLFforthermalpowerplants.Similarincentivesareprovidedfor Return on equity up to 16% is assured at 68.5% PLF for thermal power plants. Similar incentives are provided for hydroelectricpowerprojects Importdutyattheconfessionalrateof20%hasbeensetforimportofequipment Thegovernmentallowsa5yeartaxholidayforpowergeneratingprojectswithanadditionalfiveyearsinwhicha p deductionof30%taxableprofitsisallowed

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PublicPrivatePartnership(PPP)modelisnotwitnessingmuch activitycomparedtoothersectorininfrastructure
PPPModel Overview
Indiahasaround300projectsunderthepublicprivate partnershipsininfrastructure ThepowersectorinIndiahasnotwitnessmuchPPP activityascomparedtoothersectors
PowersectorwitnessedinvestmentsworthUSD3.5bn Airports Railways Energy 1% 11% 2% Urban Development 12% 13% Ports 62%

GovernmentisencouragingPPPmodeltomeetthe capacityadditiontargetof78,700MWinXIthPlan i ddi i f 78 700 MW i XI h Pl


GovernmentplanstopromotePPPmodelinashutilization, augmentationoftransmissionlinesanddistribution

Road

TypesofpublicprivatepartnershipsinIndia

DistributionFranchisee

UltraMegaPower Projects(UMPP)

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Governmentpreferdistributionfranchiseemodelcomparedto completeprivatizationofSEBsinIndia
Distributionfranchisee
StatePower Corporation Distribution Franchisee EndUser
Franchiseedistributeat priceprescribesbySEC

Sellpowerto Franchisee

The distribution franchisee agreement is based upon a contract under which the distribution assets stay Thedistributionfranchiseeagreementisbaseduponacontractunderwhichthedistributionassetsstay underStatecontrolwhileprivateplayerisinvolvedinefficientlydistributingelectricityinparticularregion Powerutilitiesfollowrevenuebasedmodelinwhichfranchiseeisresponsibleforallobligationsof distributionlicenseinthefranchiseeareaviz:
Supplyofpower pp y p Consumerservice Operationandmaintenanceofdistributionnetwork Billingandcollection Compliancewithregulatorystandards

Atotalof14States,includingUttarPradesh,Bihar,Orissa,WestBengal,Haryana,AndhraPradesh,Karnataka andGujarat,haveappointedfranchiseesfordifferentzones CromptonGreaveshasbeenawarded3majordivisionsinNagpurbytheMaharashtraStateElectricity DistributionCompanyunderthismodel

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PrivateplayersbiddingforUltraMegaPowerProjectsproposed bythegovernment
UltraMegaPowerprojects
MoPplanstosetupUltraMegaPowerprojectsthroughprivatesectorparticipationwithcapacityof400MWeach UMPPtheprojectsarebuildonBOO(BuildOwnOperate)basisthroughtariffbasedcompetitivebiddingroute BiddersarefinalizedontariffbasedcompetitivebiddingandtakesoverSpecialPurposeVehicle(SPV)fromPower FinanceCorporation(PFC) PFCisthenodelagencyforsettinguptheSPVforanyproject Projectstousesupercriticaltechnologybasedonpithead(captiveblock)orimportedcoal(coastal) Fullexemptionofcentralexcisedutyongoodsprocuredundersupercriticaltechnology Theidentifiedprojectsare
Fivecoastalsiteprojects: MundrainGujarat,KrishnapatnaminAndhraPradesh,TadriinKarnataka,GiryeinMaharashtra,and CheyyurinTamilNadu F Fourpitheadsiteprojects: S ith d it j t SasaninMadhyaPradesh,TilaiyainJharkhand,SundergarhdistrictinOrissaandAkaltarain i M dh P d h Til i i Jh kh d S d h di t i t i O i d Ak lt i Chhattisgarh

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Introduction PowerSector Overview ValueChainAnalysis GovernmentPolicies&Initiatives KeyTrends&Challenges CompetitiveLandscape y p KeyDevelopments Appendix

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KeyTrends

Increaseinpercapita consumption p

Increaseincaptive Increase in captive powerproduction

Increaseindomestic Increase in domestic investments

Trends

PEfirmsshowing interestinpowersector

IncreaseinFDI Increase in FDI

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Powersectorwitnessingincreaseinpercapitaelectricity consumptionandcorporateinvestments
Increaseinpercapitaelectricityconsumption
India'spercapitaconsumptionofelectricityhasincreasedsteadilyoveraperiodbutstill insignificantcomparedtotherestoftheworld
Kwh
800 700 672 567 595 613 632 704

Kwh
15,000 10,000 5,000 5 000 0

15,000

NationalElectricity Policyexpectstheper capitaelectricity consumptiontoreach 1000Kwhby2012

600

1,800

704

500 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

US

China

India

2,300 WorldAverage

Increaseindomesticinvestments Increase in domestic investments


IndianpowersectorhasattractedUSD38bn(INR1.95tn)ininvestmentsintheH12008 (Jan June) Powersectorattracted30%ofthetotalcorporateinvestments
USD b bn 38.0 40
20 0 29.9 21.4 17.7 17.6

Positivegovernment policiesencouraging corporateinvestments corporate investments inpowersector

Power

Realty

Steel

Retail

Telecom 22

POWERSECTOR INDIA.PPT

ForeignDirectInvestments(FDI)andprivateequity(PE) investmentssurging
IncreaseinFDI
100%FDIisallowedinallsegmentsofpowersectorincludingtrading ForeignplayerscaninvestinHydroProjects,CaptivePower,UltraMegaPowerProjects, Foreign players can invest in Hydro Projects, Captive Power, Ultra Mega Power Projects, NuclearPower,NationalGridProgram,RuralElectrification,Trading,Renewableenergy
USD mn
1,000 500 87.0 0 157.0 967.0 594.0

Powersectoris witnessingincreasein investmentsbythe foreignplayers

2005-06

2006-07

2007-08

2008-09 *

PEfirmsshowinginterestinpowersector
ReformsinthepowersectorattractinglargeglobalPEfirmstoinvestinpowersector PEinvestmentsincreased,bothinvolumeandvalue
PEfirmsmakeup59%ofthetotaldeals(M&AandPEinvestments)in2008inpowersectorwith majorityofdealsinrenewableenergy** USD mn
1,000 500 0 113 682 900 20 10 0

Globalinvestors investingin alternativesfuelsand energysegmentsin India I di

Number of deals Deal Amount

2006
Note:

2007

2008

*FromApril2008 November2008 **CompletelistofPEdealsinAppendixIII

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Captivepowerproductionbecominganattractiveoptionforthe manufacturers
Increaseincaptivepowerproduction
ElectricityAct2003liberalizedcaptivepowergenerationinordertomeettheenergy shortagesandenablecosteffectivepowersupplytomanufacturingsector g p pp y g
Actallowscaptivepowerproducerstosellexcesscapacitytoothers Groupcaptivepowerplantsalsoallowedtoenablesmallmediumindustriesandcooperatives Manufacturers increasingcaptive increasing captive powerproductionas saleofsurplus becomeseasier

Captivepowergenerationisattractivetomanufacturersastheycangeneratepowerat prices2580%cheaperthanpowerfromthegrid Thecaptivepowerplantplayerscansellsurpluselectricityto


Stateelectricityboardthrough1525yearpowerpurchaseagreements(PPAs) OnlineelectricitytradingplatformlikeIEXorPXI

Freecapacityfromcaptiveplantsisconnectedtothegridtomeetthecountrysenergy requirements i
In2005,14,636MWwasconnectedtogrid,whilein200614,866wasconnectedtogrid MW
40,000 31,000 , 30,000 20,000 10,000 0 18,740 19,485 24,600

Mar-05

Mar-06

Mar-07

Mar-12 24

POWERSECTOR INDIA.PPT

Challenges

Inabilitytomeetthecapacity additiontargets

Shortageofcoal

Challenges

Ageingandimproperly maintainedinfrastructure

Hugepowerlossintransmission anddistribution

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Governmenthasfailedtomeetthecapacityadditiontargetsset inFiveYearPlans
Inabilitytomeetthecapacityadditiontargets
Actualcapacityadditionshavesubstantiallylaggedtheplannedcapacityadditionsinthe past5YearPlans
EighthFiveYearPlan(19921997) 54%implemented NinthFiveYearPlan(19972002) 48%implemented TenthFiveYearPlan(20022007) 51.5%implemented Governmentinability meetpowercapacity targetsiswideningthe demandsupplygap

Capacityadditionof21,180MWwasachievedinXthagainstthetargetof41,110MW S Someofthereasonsfortheslippageofprojectswere f th f th li f j t
Delayinsupplies/erectionbysuppliers/contractors Delayintieupforsupercriticaltechnology NonavailabilityofGas Delayinclearance/investmentdecisions(HydroProjects) y / ( y j ) HydroProjectdelayedduetodelayinenvironmentalclearance,naturalcalamities,delayinsigningof MoU Law&OrderProblems

SummaryofcapacityadditionduringXth Plan Summary of capacity addition during Xth Plan OriginalTarget ()Netcapacityadditionsfromoriginaltarget () ()Netcapacityadditionfromadditionalprojects p y p j Capacityslipped/Dropped
POWERSECTOR INDIA.PPT

41,110MW 19,829MW 1,351MW 21,281MW


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Powerplantsfacingcoalshortageswhiledistributioncompanies facinghugeT&Dlosses
ShortageofCoal
SomeoftheIndias77coalbasedstationstotalling70,000MWarefacingseverecoal shortages Powerutilitiesareexpectedtofaceshortageof66mntonnesofcoalbyendof201112
Totalcoalrequirementis448.5mntonnesin201112whiletheindigenouscoalavailabilityfrom CoalIndiaandsubsidiariesduringtheisestimatedat382.4mntonnes Coalsupplyshortages duetoinabilitytokeep due to inability to keep importsinlinewith targetsorproblemsin CoalIndiaLtd

Coalshortagesareeitherduetoinabilityofpowerutilitiestoimportcoalinlinewithits targetorlawandorderproblemsatsubsidiariesofCoalIndiaLtd target or law and order problems at subsidiaries of Coal India Ltd Thecurrentpeakingshortagesof14%andenergyshortagesof8%couldworsenbecause ofcoalshortages

Hugepowerlossintransmissionanddistribution
Averagetransmissionanddistributionlosses(T&D)exceed30%oftotalpowergeneration comparedtolessthan15%fordevelopingeconomies HugeT&Dlossesimpactingthefinancialhealthofthepowerutilitieswithmajorityof themhavingnegativerateofreturn Significantproportionoflossisnontechnical,primarilyduetotheftofelectricity WeakT&DsystemisduetolackofgovernmentfocusonexpandingT&Dnetwork
RatioofinvestmentingenerationtoT&Dis2:1inIndiacomparedto1:1ormoreindeveloped countries HighT&Dlossesresults inlowereffective realizationofperunit realization of per unit ofpowerproduced

Ratiooflowtension(LT)andhightension(HT)hasincreasingsignificantly,resultingin highershareoflowvoltagelinesandhighT&Dlosses
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Powerequipmentsusedingenerationandtransmissionof electricitynotwellmaintained
Ageingandimproperlymaintainedinfrastructure
Networkinfrastructurehasfailedtogrowatthepaceofloadgrowth Mostofthenetworkequipmentsincludingpowertransformers,distribution transformers,33kVlines,11kVfeedersandLTnetworksareoldandoverloaded Lackofpropermaintenanceisfurtherworseningthehealthoftheequipments. Distributioncompaniesarespendinghugeamountinreplacingburntequipments
Poorqualityand ageingpower ageing power equipmentsimpacting qualityandreliability ofpowersupply

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Introduction PowerSector Overview ValueChainAnalysis GovernmentPolicies&Initiatives KeyTrends&Challenges CompetitiveLandscape y p KeyDevelopments Appendix

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MajorityoftheinstalledpowercapacityinIndiawithpublic sectorundertakings
PublicSectorPlayers
CompanyName
NationalThermalPowerCorp NationalHydroElectricPowerCorp NuclearpowerCorp.ofIndiaLtd p p PowerGridCorporationOfIndia PowerTradingCorporationofIndia

Generation

Transmission

Distribution

Revenues (FY20078) USD9.6bn USD780mn USD1.05bn USD 1.05 bn

EBITDA (FY20078) USD2.9bn USD545mn USD584mn USD 584 mn USD961mn USD5.2mn

TotalCapacity 29,144MW 2,755MW 4,120MW 4,120 MW

USD1.07bn USD957mn

National Thermal Power Corporation (NTPC) is the si th largest thermal po er prod cer in the orld and Indias NationalThermalPowerCorporation(NTPC) isthesixthlargestthermalpowerproducerintheworldandIndias largestpowerproducer.Itaccountsfor20%ofthecountrysinstalledcapacity.NTPCplanstoinvestuptoUSD36bnby 2012totransformitselfintoanintegratedregionalenergyplayerandhaveaninstalledcapacityofover50,000MW NationalHydroElectricPowerCorp(NHPC)planstoincreasethepowergenerationcapacitytoover10,000MWby 201112 0 NuclearPowerCorporationofIndiaLtd.(NPCIL)has5plantsunderconstructionadding2660MWby2012 PowerGridCorporationofIndiaLtd(PGCIL)isresponsibleforinterstatetransmissionofelectricity.Thecompany reportedrevenueofUSD1.1bninFY200708 PowerTradingCorporationofIndia(PTC)istheGovernmentofIndiainitiatedpublicprivatepartnership,formedfor Power Trading Corporation of India (PTC) is the Government of India initiated public private partnership, formed for thepurposeoftradingofpower

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Manyprivateplayersinvestinginpowersectorwithpresence acrossthevaluechain
DomesticPrivatePlayers
CompanyName
TataPower CESCLtd

Generation

Transmission

Distribution

Revenues ( (FY20078) ) USD1.9bn USD880mn

EBITDA (FY200708) ( ) USD340mn USD120.5mn USD119mn USD63mn USD175mn USD137mn USD68.5mn

Total Capacity p y 2323MW 975MW 941MW 560MW 523MW 500MW 300MW

RelianceInfrastructure GujaratIndustrialPowerCorp.
LancoInfratechLtd TorrentPower

USD1.7bn USD232mn USD797mn

USD899mn USD74.7mn

JaiprakashHydroPowerLtd

Someoftheothersignificantprivateplayersinpowersectorinclude: KalpatruPowerTransmissionLtdisdesign,testing,fabrication,erectionandconstructionofEHVtransmission lines.Thecompanyhasannualproductionof62,450MTsandreportedrevenuesofUSD664mninFY2007 08 lines. The company has annual production of 62,450 MTs and reported revenues of USD664 mn in FY200708 KECInternationalLtdispowertransmissionengineering,procurementandconstructioncompanywithannual productionof113,000MTs.ThecompanyreportedrevenuesofUSD699mninFY200708 AuroMiraEnergy ispowergenerationcompanyinvolvedinBioMass,HydelandWindsectors.Plannedreachof 1000MWby2012 DPSCLtdisinvolvedinpowerdistributionandgenerationinAsansolRaniganjcoalbeltinWestBengal

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ForeignplayersalsoshowinginterestinIndianpowersector
InternationalPlayers
CompanyName Generation Transmission Distribution Revenues (FY20078) USD320mn* n.a. TotalCapacity

ChinaLight&Power(CLP) MarubeniCorporation
Note:*RevenuesfromIndia Note: * Revenues from India

655MW 347MW

ChinaLight&Power(CLP):CLPPowerIndiaPrivateLtd,asubsidiaryofChinaLightandPowerLtd(HongKong)isthe largestforeigninvestorintheIndianpowersector MarubeniCorporation:MarubeniisveryactiveinpowersectorforbothEPC(Engineering,Procurementand Construction)typeofprojectsaswellasIPP(IndependentPowerProducer)typeofprojects ) f ll ( d d d ) f ManyotherforeignplayersplanningtoenterIndianpowergenerationmarketincluding: RanhillBerhad(Malaysia) TronohAlco(Malaysia) IsraelElectricCorporation(Israel) KoreaElectricPowerCompany(SouthKorea) KhanjeeHoldingInc(US)

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Introduction PowerSector Overview ValueChainAnalysis GovernmentPolicies&Initiatives KeyTrends&Challenges CompetitiveLandscape y p KeyDevelopments Appendix

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KeyDevelopments
Date
14Feb2009 11Feb2009 28Jan2009

Development
NTPCandNuclearPowerCorp.willspendasmuchasUSD$3bntobuildnewatomicplantsinthenexteightyears ThepowerregulatorCentralElectricityRegulatoryCommission(CERC)willcomeoutwithnewtradingregulationforthe countryinMarch2009. country in March 2009 RelianceIndustriesscrappedaINR1,500crorecaptivepowerplantafterthegovernmentdecidedtoallocategasfromits easternoffshorefieldstoexistingpowerandfertiliserplantsonly.RILhadproposedtosetupa345MWpowerplantat NagothaneinMaharashtraforcaptiveuseandwaswantingtopipeitsKGbasingastotheplant JindalPowerannouncedtodaythatwillraiseINR7,000croreinthenextoneyearfromboth,domesticaswellas internationalsourcestofunditsthermalpowerprojectinChhattisgarh. PowerTradingCompanyIndia(PTCIndia)islookingatpickingupstakesinpowergenerationprojectsacrossthecountry.

27 Dec 2008 01Nov2008

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Introduction PowerSector Overview ValueChainAnalysis GovernmentPolicies&Initiatives KeyTrends&Challenges CompetitiveLandscape y p KeyDevelopments Appendix

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AppendixI PowerSectorStructureinIndia
Central
Policy Plan Regulations Generation Transmission Systemoperations Distribution Trading Appeal pp TradingLicencee AppellateTribunal pp NRLDC MinistryofPower StateGovernment CEA CERC CentralGeneratingUnits CTU RLDC GENCOs STU SLDC Distribution Licencee Someprivate playersin generation& distribution SERC IPPs

State

TradingLicencee AppellateTribunal pp

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AppendixII PlannedCapacityAdditionsfor11th Plan


PlanCapacityAdditions(MW) 11th FiveYearPlan Central Thermal Hydro H d Nuclear TotalUtility Renewables GrandTotal 24,840 8,654 8 654 3,380 36,874 NA 36,874 State 23,301 3,482 3 482 0 26,783 NA 26,783 Private 11,552 3,491 3 491 0 15,043 NA 15,043 Total 59,693 15,627 15 627 3,380 78,700 14,000 92,700

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AppendixIII PEDealsinIndia
Investor
DarbyOverseasInvestmentsLtd DEShaw DE Shaw FarallonCapital LNMIndiaInternetVentures StateBankofIndiaandICICIBank NYLIMJacobBallasIndiaFundIII MayfieldFund OrientGlobalTamarindFundPteLtd FirstReserveCorporation First Reserve Corporation DubaiInvestmentGroup NexusIndiaCapital KleinerPerkinsCaufield&Byers,SherpaloVenturesandAppliedMaterials OlympusCapitalHoldingsAsia,ShriramEPCandBessemerVenture AcumenFund AcumenFund HelionVenturePartnersandFoundationCapital Helion Venture Partners andFoundation Capital Investee BhorukaPowerCorporationLtd SohamRenewableEnergyIndia Soham Renewable Energy India IndiabullsPowerServices IndiabullsPowerServices JaiprakashPowerVentures SaravanaGlobalEnergyLtd ServomaxIndia CairnIndiaLtd Kenersys ChiranjeeviWindEnergyLtd. SEDEMACMechatronicsPvtLtd KotakUrjaPvtLtd %Stake N.A. N.A. NA 23.40% 14.10% 3.005 N.A. N.A. 2.60% N.A. NA 40.00% N.A. N.A. N.A. N.A. N.A. N.A. NA Investment ValueinUSD 17.50mn 15.00mn 15 00 mn 246.88mn 148.13mn 100.00mn 25.00mn 3.75mn 278.69mn N.A. NA N.A. N.A. 8.00mn 55.00mn 1.26mn 1.00mn N.A. NA

OrientGreenPowerLtd
SBAHydro&RenewableEnergy D.lightDesign AzurePower Azure Power

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