POWER

AUGUST 2015

For updated information, please visit www.ibef.org

POWER

Executive Summary. 3

Advantage India 4

Market Overview and Trends..6

Porter Five Forces Model..........................16

Strategies Adopted.....18

Growth Drivers.....20

Opportunities31

Success Stories.......38

Useful Information.. 46

AUGUST 2015

For updated information, please visit www.ibef.org

POWER
EXECUTIVE SUMMARY
Fourth largest producer
and fourth largest
consumer globally

Large-scale government
initiated expansion
plans

Robust growth in
renewables

Favourable policy
environment

With a production of 1,048.7 TWh, India is the third largest producer and fourth largest
consumer of electricity in the world. It has fifth largest installed capacity in the world

The government targets capacity addition of 88.5 GW under the 12th Five-Year Plan
(201217) and around 100 GW under the 13th Five-Year Plan (201722)
Investments of around USD250 billion are planned for the power sector during the 12th
Plan Five-Year Plan

Renewable energy capacity additions to 30 GW are planned till 2017 to meet the growing
energy demand. The installed capacity reached 35.78 GW as on March 2015
Wind energy is estimated to contribute 15 GW, followed by solar power at 10 GW

100 per cent FDI is allowed under the automatic route in the power segment and
renewable energy

Source: Make in India website, Ministry of New and Renewable Energy, IEA,
CEA (Central Electricity Authority), TechSci Research, Assorted articles
Notes: TWh - Terawatt Hours, GW Gigawatt,

AUGUST 2015

For updated information, please visit www.ibef.org

POWER

ADVANTAGE INDIA
AUGUST 2015

POWER
ADVANTAGE INDIA
Growing
demand
Growing demand

FY15

Expansion in industrial activity to

boost demand for electricity

Total
demand
(TWh):
1174.07

Growing population and increasing

penetration and per-capita usage to
provide further impetus

Power consumption is estimated to

increase from 1174.07 TWh in 2015
to 1,894.7 TWh in 2022

Higher investments

AUGUST 2015

Attractive opportunities

Ambitious projects and increasing

investments across the value chain
Diversification into renewable
sources increasing growth avenues

Advantage
India

Total FDI inflows in the power

sector touched USD9.7 billion
during April 2000 to May 2015,
accounting for 4.0 per cent of total
FDI inflow in India
Investment for 7 new transmission
systems that includes strengthening
of national grid have been
sanctioned

FY22E
Total
demand
(TWh):
1,894.7

Policy support

100 per cent FDI allowed in the

power sector has boosted FDI
inflows in this sector

Schemes like Deen Dayal Upadhyay

Gram Jyoti Yojana (DDUGJY)and
Integrated Power Development
Scheme (IPDS) have already been
implemented for rural and urban
areas respectively

Source: CEA, DIPP (Department of Industrial Policy and Promotion), TechSci Research
Notes: FY - Indian Financial Year (April March), FDI - Foreign Direct Investment,
E - Estimates, TWh - Terawatt-Hour, FY22 estimates as per IEA forecasts

For updated information, please visit www.ibef.org

POWER

MARKET OVERVIEW AND TRENDS

AUGUST 2015

POWER
EVOLUTION OF THE INDIAN POWER SECTOR
2003 onwards
Growth Era
19912003
Liberalisation Era
19561991
Nationalisation
Stage

Before 1956
Introductory
Stage

Electricity
(Supply) Act
1948
Establishment
of semiautonomous
State Electricity
Boards (SEBs)

AUGUST 2015

Industrial Policy
Resolution (1956)
Generation and
distribution of power
under state
ownership
Power losses,
subsidies,
infrastructure
bottlenecks and
resource constraints

Legislative and policy

initiatives (1991)

Private sector
participation in
generation

Fast-track clearing
mechanism of private
investment proposals
Electricity Regulatory
Commissions Act
(1998) for establishing
Central and State
Electricity Regulatory
Commissions and
rationalisation of tariffs

Electricity Act (2003)

National Tariff Policy (2006)

New renewable energy policy have been

announced

Amendments made in Electricity Act so

as to create competition

Implementation of Deen Dayal Upadhyay

Gram Jyoti Yojana (DDUGJY) and
Integrated Power Development Scheme
for rural and urban areas respectively

Fuel supply agreements to be signed by

Coal India Limited through which CIL
supplies contracted coal to developers
and in its absence, projects are stranded
without fuel

Source: MNRE, Corporate Catalyst India, IFLR, TechSci Research

For updated information, please visit www.ibef.org

POWER
INDIA AMONG TOP FOUR POWER PRODUCERS AND CONSUMERS
With a production of 1,208.4 TWh, India is the third largest
producer and fourth largest consumer of electricity in the
world

Worlds leading electricity producers in 2014 (TWh)

5649.6

Although power generation has grown more than 100-fold

since independence, growth in demand has been even
higher due to accelerating economic activity

4297.3

1208.4

1064.1

1061.2
615.4

China

US

India

Russia

Japan

614

Canada Germany

Source: Enerdata, TechSci Research,

Note: TWh - Terawatt Hours

AUGUST 2015

For updated information, please visit www.ibef.org

POWER
POWER GENERATION HAS GROWN RAPIDLY OVER THE YEARS
Electricity production in India (TWh)

Electricity production in India stood at 1,048.7 TWh in FY15,

a 8.4 per cent growth over the previous fiscal
Over FY1015, electricity production expanded at a CAGR
of 6.3 per cent

The Planning Commissions 12th Plan projects that total

domestic energy production would reach 669.6 million
tonnes of oil equivalent (MTOE) by 201617 and 844 MTOE
by 202122

CAGR: 6.3%
876.9
771.6

FY10

912.1

1048.7

967.2

811.1

FY11

FY12

FY13

FY14

FY15

Source: BP Statistical Review, TechSci Research;

Notes: FY - Indian Financial Year (April-March),
TWh - Terra Watt Hour, *Provisional

AUGUST 2015

For updated information, please visit www.ibef.org

POWER
SOURCES OF POWER WITH SHARES IN TOTAL INSTALLED CAPACITY (1/2)
Coal

India has large reserves of coal. At the end of 2014, total coal
reserves stood at 301.56 billion tonnes; of which, 60.6 billion tonnes
was proven reserves

Gas

Indias proven natural gas reserves measure about 1.4 trillion cubic
metres

69.5%
Thermal

15.3%
Hydro

Renewable

Wind energy is the largest renewable energy source in India; projects like the Jawaharlal Nehru
13.1% National Solar Mission (aims to generate 20,000 MW of solar power by 2022) are creating a positive
environment among investors keen to exploit Indias potential. There are plans to set up four solar
power plants of 1GW each
2.1%

Nuclear

With a large swathe of rivers and water bodies, India has enormous potential for hydropower; the
12th Five-Year Plan (201217) includes additional 30GW of hydroelectric power generation.
Currently, India has 41.63 GW of hydro power generating capacity

Currently, India has 5.78 GW of net electricity generation capacity using nuclear fuels (across 20
reactors) and aims to increase it to 45 GW by 2020; with one of the worlds largest reserves of
thorium, India has a huge potential in nuclear energy

Source: Ministry of Coal, NHPC, CEA, BP Statistical Review 2015, Corporate Catalyst India, Indian Power Sector, TechSci Research
Notes: MW - Megawatt, GW - Gigawatt

AUGUST 2015

For updated information, please visit www.ibef.org

10

POWER
SOURCES OF POWER WITH SHARES IN TOTAL INSTALLED CAPACITY (2/2)
As of 2015, total thermal installed capacity stood at 189.3
GW, while hydro and renewable energy installed capacity
totalled 41.6 GW and 35.8 GW, respectively. At 5.8 GW,
nuclear energy capacity had increased considerably which
otherwise remained the same from 2010 - 14

Installed capacity for different sources of power

2015 (GW)
189.3

For the 12th Five-Year Plan, a total of 88.5 GW of power

capacity addition is targeted; of which, 72.3 GW constitutes
thermal power, 10.8GW hydro power and 5.3 GW nuclear
power
The capacity addition target for 201415 is 842 MW of
hydro power, 14.9 GW of thermal power and 2 GW of
nuclear power. Total capacity target is 17.8 GW

41.6

35.8
5.8

Thermal

Hydro

Renewables

Nuclear

Source: Ministry of Coal, NHPC,

Central Electricity Authority (CEA), Corporate
Catalyst India, TechSci Research
Notes: MW - Megawatt, GW - Gigawatt

AUGUST 2015

For updated information, please visit www.ibef.org

11

POWER
GENERATION CAPACITY HAS INCREASED AT A HEALTHY PACE (1/2)
Indias installed power generation capacity was 272.5 GW
as on FY15

Installed electricity generation capacity (GW)

272.5

Installed capacity increased steadily over the years, posting

a CAGR of 9.4 per cent in FY0915

CAGR: 9.4%

223.3

237.7

199.9

132.3

FY07

143.1

148.0

FY08

FY09

159.4

FY10

173.6

FY11

FY12

FY13

FY14

FY15

Source: CEA (Central Electricity Authority), TechSci Research

Notes: GW Gigawatt, CAGR - Compound Annual Growth Rate

AUGUST 2015

For updated information, please visit www.ibef.org

12

POWER
GENERATION CAPACITY HAS INCREASED AT A HEALTHY PACE (2/2)
Comparison of installed capacity (GW)
189.3

Among the different sources of power in India, the CAGR in

installed capacity over FY0715 was

Thermal

Hydro

End of 10th Plan

Renewable
End of 11th Plan

5.8

4.8

3.9

35.8

41.6

7.8

5.1 per cent for nuclear power

39.0

34.7

2.3 per cent for hydro power

24.5

86.0

21.1 per cent for renewable energy, the fastest

among all sources of power

131.6

10.4 per cent for thermal power

Nuclear
End of FY15

Source: CEA, TechSci Research,

Note: CAGR - Compound Annual Growth Rate

AUGUST 2015

For updated information, please visit www.ibef.org

13

POWER
MAJOR PLAYERS IN THE POWER SECTOR (1/2)
Company

Business description
NTPC is Indias largest power producer and the sixth-largest thermal power producer in the world, with installed
capacity of 45.05 GW (including JVs). By 2032, NTPC plans to reach 128,000 MW of power capacity. Coal-based
power accounts for more than 90 per cent of the total capacity
It has also diversified into hydro power, coal mining, power equipment manufacturing, oil and gas exploration,
power trading and distribution
Tata Power is Indias largest integrated power company, with significant presence in solar, hydro, wind and
geothermal energy space. The company accounts for 52 per cent of total generation capacity in the private sector,
with an installed capacity of 8.6 GW. By 2022, the company plans to increase the generating capacity to 18 GW,
distribution networks by 4 GW and energy resources by 25 million tonnes per annum.
The company has more than 35,000 MW of power generation capacity, both operational and under development.
Reliance Power has an operational power generation capacity of 6 GW. FY13 saw the development of 3,960-MW
Sasan UMPP in Madhya Pradesh

CESC Limited is a vertically integrated player engaged in coal mining, and generation and distribution of power. It
owns and operates three thermal power plants generating 1225 MW of power. These are Budge Budge
Generating Station (750 MW), Southern Generating Station (135 MW), and Titagarh Generating Station (240 MW)
NHPC is the largest hydro power utility in India, with an installed capacity of 6.5 GW; it has drawn up a massive
capacity expansion plan of adding 6.7 GW by 2017
NHPC is constructing nine projects, aggregating an installed capacity of 4.2 GW. NHPC added 1.9 GW and 1.1
GW during the 10th and 11th Plan periods, respectively

Source: Company websites, News articles, Industry sources, TechSci Research

AUGUST 2015

For updated information, please visit www.ibef.org

14

POWER
MAJOR PLAYERS IN THE POWER SECTOR (2/2)
Company

Business description
Power Finance Corporation Limited (PFC) is an NBFC engaged in financing and development activities within the
Indian power sector
Major products and services include project term loans, lease financing, direct discounting of bills, short-term loans
and consultancy services
Adani Power is one of Indias largest private thermal power producers, with total capacity set to reach 10.4 GW;
the company aims to generate 20 GW of power by 2020
The company is one of the worlds largest single-location thermal power plants in Mundra, Gujarat
Power Grid Corporation of India Limited (PGCIL) is the single largest transmission utility in India; it is responsible
for planning, co-ordination, supervision and control over inter-state transmission systems
Target to enhance inter-regional capacity to about 72.25 GW at the end of XII Plan. In 2014, inter-regional capacity
is 37.95 GW.
Damodar Valley Corporation is engaged in power generation, distribution and transmission of electric power,
irrigation and flood control

SJVN Limited is the second largest hydro power company in India

The company plans to diversify into wind power projects soon

*This list is indicative.

AUGUST 2015

Source: Company websites, News articles, TechSci Research

Note: NBFC - Non-Banking Financial Company

For updated information, please visit www.ibef.org

15

POWER

PORTER FIVE FORCES ANALYSIS

AUGUST 2015

POWER
PORTERS FIVE FORCES ANALYSIS
Competitive Rivalry

Rivalry is not intense due to oligopoly structure

In India, the projected demand is already above the supply levels
Competitive rivalry is expected to increase due to government
encouraging private players to enter the sector

Threat of New Entrants

Capital intensive nature of the

industry makes it difficult for
new entrants
Regulatory approvals, land
remain a major problem

Bargaining Power of Suppliers

Bargaining power of
suppliers is high as presence
of bigger players block the
new entrants

Threat of New
Entrants
(Low)

Substitute Products

Does not have any substitutes

Bargaining
Power of
Customers
(Medium)

Competitive
Rivalry
(Medium)

Substitute
Products
(Low)

Bargaining Power of Customers

Medium, as for retail

consumers, government
sometimes interferes to
regulate prices. However,
prices are not regulated for
industrial customers

Bargaining
Power of
Suppliers
(High)

Source: TechSci Research

AUGUST 2015

For updated information, please visit www.ibef.org

17

POWER

STRATEGIES ADOPTED
AUGUST 2015

POWER
STRATEGIES ADOPTED

Control generation
costs

Acquiring sources of
fuel supply

Diversifying generation
technologies

Additional revenue
streams

Digital India

AUGUST 2015

Companies are developing captive coal fields to reduce price volatility and ensure
uninterrupted supply of fuel to control generation cost

Most of the power companies are now located near energy source. This helps minimise
costs of fuel transport

Power companies are now looking at securing adequate supplies of fuel by targeting not
only domestic but also overseas resources

Reliance Power already has coal reserves in Indonesia

Companies are using multiple-generation technologies based on a projects requirement

Companies such as NTPC and Reliance Power already have coal-fired, gas-fired and
hydroelectric capacity

This helps them diversify, reduces dependence on a single source

Most of the companies are now looking to sell their carbon credits to generate additional
revenue by employing supercritical technology

Launch of smart grid mission with 14 DISCOMS as a pilot

Smart metering for high end users of electricity

Source: TechSci Research

For updated information, please visit www.ibef.org

19

POWER

GROWTH DRIVERS
AUGUST 2015

POWER
STRONG DEMAND AND POLICY SUPPORT DRIVING INVESTMENTS
Growing demand

Policy support

Increasing investments

Rising FDI inflows:

USD657 million in
FY15, USD155 for
May15

Electricity Act (2003):

highly liberal
framework for
generation

Increase in industrial
activity
Inviting

Resulting in

Increasing penetration,
per-capita consumption

Fuel supply agreement

of power companies
with Coal India Ltd

Growing M&A activity

Growing middle class

and consumer base

Development of
UMPPs

Large investments in
equipment manufacture
and power generation

National Tariff Policy

(2006): private
investment through
competitive bidding
Source: Corporate Catalyst India, Ministry of Power, TechSci Research,
Notes: FDI - Foreign Direct Investment, M&A - Merger and Acquisition, R-APDRP - Restructured Accelerated Power Development and Reform Programme,
T&D - Transmission and Distribution, UMPP - Ultra Mega Power Projects

AUGUST 2015

For updated information, please visit www.ibef.org

21

POWER
INDUSTRIAL EXPANSION AND STRONG GDP GROWTH DRIVING POWER DEMAND (1/2)
Share of industry in electricity consumption

Multiple drivers (industrial expansion, growing per-capita

incomes) are leading to growth in power demand; this is set
to continue in the coming years

58%

During FY1015, GDP growth is likely to average

8.08.5 per cent

44.9% 44.4% 43.8%

37.6% 37.7% 37.8% 38.6% 39.3%

India is set to become a global manufacturing hub

with investments across the value chain
Indias power demand is expected to rise up to 1,915 TWh
by FY22

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

Source: TechSci Research,

Ministry of Statistics and Program Implementation
Notes: TWh - Terawatt Hours,
RGGVY - Rajiv Gandhi Grameen Vidyutikaran Yojana, CEA

AUGUST 2015

For updated information, please visit www.ibef.org

22

POWER
INDUSTRIAL EXPANSION AND STRONG GDP GROWTH DRIVING POWER DEMAND (2/2)

914.41

957

FY09

883.6

FY08

818.7

733.5

FY07

778.6

717

Per capita consumption grew 4.7 per cent in FY14

but tapered to 5.5 per cent in FY15, reaching 1010
KWh

FY12

FY13

FY14

428.6

Per capita consumption has grown at a CAGR of 10

per cent between FY06 and FY15

671.9

CAGR: 10.0%

1010

Per-capita electricity consumption (KWh)

82 GW of generation capacity is set to be added during

FY11FY15; future investments will benefit from strong
demand fundamentals, policy support and increasing
government focus on infrastructure

FY06

FY10

FY11

FY15

Source: CEA, TechSci Research

Notes: RGGVY - Rajiv Gandhi Grameen Vidyutikaran Yojana,
*Provisional

AUGUST 2015

For updated information, please visit www.ibef.org

23

POWER
POLICY SUPPORT AIDING GROWTH IN THE SECTOR
Electricity Act, 2003

Elimination of licensing for electricity generation projects

Increased competition through international competitive bidding
Demarcation of transmission as a separate activity

National Tariff Policy,

2006

Ultra Mega Power

Projects (UMPPs)

Adequate return on investment to companies engaged in power generation, transmission

and distribution
Uniform guidelines to SERCs for fixing tariffs
Assured electricity to consumers at reasonable and competitive rates

Launch of the UMPP scheme through tariff-based competitive bidding

Ease of land possession, provision of fuel, water and necessary clearances for enhancing
investor confidence
According to Union Budget 2015, five new UMPPs ,each of 4000MW, have been
proposed to setup in the plug- and play mode

R-APDRP

Fuel Supply Agreement

R-APDRP was launched by Ministry of Power with the purpose of reducing AT&T losses
up to 15 per cent by upgradation of transmission and distribution network
Linking disbursement of central government funds (to states), with actual reduction in
transmission and distribution losses. Sanctioned projects of more than USD5.8 billion

Fuel supply agreement with Coal India Ltd will ensure the availability of coal for power
companies over the long term

Source: Ministry of Power, TechSci Research

Notes: R-APDRP - Restructured Accelerated Power Development and Reform Programme,
SERC - State Electricity Regulatory Commission, AT&T - American Telephone & Telegraph Systems

AUGUST 2015

For updated information, please visit www.ibef.org

24

POWER
POLICY SUPPORT AIDING GROWTH IN THE SECTOR

National Electricity
Policy

Provide electricity to all areas

Prepared in consultation with state governments, CEA, and other stakeholders
Supply of reliable and quality power in an efficient manner and reasonable rates

Feed in Tariff

This Scheme used for promoting generation of electricity from renewable energy sources
Allows Power Producers to sell renewable energy generated electricity to an off taker at
a pre determined tariff for a given period of time

Launched by Ex Prime Minister Dr. Manmohan Singh to fulfil the commitment of the
National Common Minimum Programme (NCMP) for the completion of household
electrification in next five years and modernizing the rural electricity infrastructure
The scheme, to be implemented through Rural Electrification Corporation, will provide
Ninety per cent of the capital cost of the programme by the Central Government as grant
for creating: Rural Electricity Distribution Backbone (REDB) with at least one 33/11 KV (or
66/11 KV) substation in each block.
Village Electrification Infrastructure (VEI) with at least one distribution transformer
in each village/habitation.
Decentralised Distributed Generation (DDG) Systems where grid supply is not
feasible or cost-effective.

Rajiv Gandhi Grameen

Vidyutikaran Yojana
(RGGVY)

Source: Ministry of Power, TechSci Research

Notes: R-APDRP - Restructured Accelerated Power Development and Reform Programme,
SERC - State Electricity Regulatory Commission, AT&T - American Telephone & Telegraph Systems

AUGUST 2015

For updated information, please visit www.ibef.org

25

POWER
POLICIES ADOPTED DURING BUDGET FY14 & FY15
Generation-based
incentives

Public Private
Partnership(PPP)

Liberalised FDI policy

Government to reintroduce 'generation-based incentives' for wind power projects to boost

capacity addition in the sector; Cutting of excise duties by 2 per cent on capital goods import
USD147.3 million would be allocated to the Ministry of New and Renewable Energy

To reduce dependency on imported coal, a Public Private Partnership (PPP) policy framework
would be devised with Coal India Limited to increase coal production

100 per cent FDI is allowed under automatic route for power sector except atomic energy
During FY13, the Government liberalised FDI policy for Power Trading Exchanges
Foreign Investment in power exchanges registered under the CERC Regulations, 2010,
allowed up to 49 per cent (FDI-26 per cent and FII-23 per cent)

Low-interestbearing funds to be provided from National Clean Energy Fund (NCEF) to Indian
Renewable Energy Development Agency Ltd (IREDA) for on-lending to viable renewable
energy projects

Low-interest funds

Growing investments

The total plan outlay for the power sector for FY14 is estimated at USD1.6 billion, a significant
27 per cent higher than the revised estimate of USD1.5 billion for FY13
While the proportion of plan expenditure in the total outlay was 59 per cent in FY13, that for
FY14 is a whopping 96 per cent

Tax benefits

AUGUST 2015

Benefit under section 35 (2AA) of the Income Tax Act to industry/private sponsored research
programmers
Write off can be availed for expenditure to be made on R&D to in-house R&D centres
Further incentives are available for setting up of projects in notified areas
Source: Union Budget FY14, Various News articles, TechSci Research,
Notes: PSUs - Public Sector Units, CERC: Central Electricity Regulatory Commission

For updated information, please visit www.ibef.org

26

POWER
RECENT POLICIES ADOPTED
Spinning Reserve

Energy Conservation
Campaign

National Mission on
Enhanced Energy
Efficiency

In order to meet the peak load shortages and grid stability, spinning reserves have been
created

Replacing nationwide street lights with LED lights

Plan to save 10 per cent energy that would light up 11 crore lives
Replacing 1 crore bulbs in Delhi within one year

In August 2014, Government had launched the policy with an investment of USD128
million
Funds energy efficient electrical appliances

Implementation of Two schemes Deen Dayal Upadhyay Gram Jyoti Yojana(DDUGJY)

and Integrated Power Development Scheme(IPDS) for rural and urban areas
24/7 power for rural homes
Farmers will get power from a separate line

Power to the people

Source: Ministry of Power, Various News articles, TechSci Research

AUGUST 2015

For updated information, please visit www.ibef.org

27

POWER
INCREASING INVESTMENTS: FDI INFLOWS AND KEY DEALS (1/3)
FDI inflows into the power sector (USD million)

Power is one of the key sectors attracting FDI inflows into

India

1652

FDI inflows into the sector increased from USD157 million in

FY07 to USD657 million in FY15 and USD155 million during
April15 (FY16E)

1437
1252
967

1066

985

Power accounted for 4 per cent of total inflows till May 2015
657
536

Cumulative FDI inflows into the sector in Apr00May15

were USD9.7 billion
157

100 per cent FDI allowed in the power sector has boosted
FDI inflows in this sector

155

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16E
Source: DIPP, TechSci Research

AUGUST 2015

For updated information, please visit www.ibef.org

28

POWER
INCREASING INVESTMENTS: FDI INFLOWS AND KEY DEALS (2/3)
Private equity investments in the sector have surged since 2010
Asian Development Bank (ADB), Goldman Sachs and Global Environmental Fund have together invested USD140 million in
ReNew Wind Power Pvt Ltd on July 03, 2014
EIG Global Energy Partners made an investment of USD125 million in Greenko Group, which is planning to develop its wind
farms and hydropower assets in India by means of Greenfield projects and acquisitions
GE Energy Financial Services plans to invest USD24 million in a solar power project by Welspun Renewables Energy Pvt
Ltd.

Source: Thomson One Banker, Industry News,

VC Circle, TechSci Research
Notes: FDI - Foreign Direct Investment,
PE - Private Equity, Thomson One Banker

AUGUST 2015

For updated information, please visit www.ibef.org

29

POWER
INCREASING INVESTMENTS: FDI INFLOWS AND KEY DEALS (3/3)
Private Equity deals
Acquirer

Target

Deal date

Value (USD mn)

Greenko Group

October 2014

125

Sterlite Power Grid Ventures Ltd

07 July 2014

83.4

ReNew Wind Power Pvt Ltd

03 July 2014

140

Welspun Renewables

June 2014

85

GMR Energy

24 Feb 2014

Consortium led by Deutsche Investitions, FE

Clean Energy Group & IFC

NSL Renewable Power Pvt Ltd

29 April 2013

60.0

Ascent Capital Advisors India Pvt Ltd, VenturEast,

Draper Fisher Jurvetson Intl.

Bharat Light and Power Pvt Ltd

22 January 2013

18.6

Gujarat Gas Co Ltd

3 October 2012

674.2

Azure Power India Pvt Ltd

7 September 2012

8.0

EIG Global Energy Partners

Standard Chartered Private Equity Ltd
ADB, Goldman Sachs, Global Environment Fund
ADB, DEG
IDFC

GSPC Distribution Networks Ltd

Foundation Capital; Helion Venture Partners

Source: Thomson One Banker, Industry News, VC Circle, TechSci Research

Notes: FDI - Foreign Direct Investment, PE - Private Equity, Thomson One Banker

AUGUST 2015

For updated information, please visit www.ibef.org

30

POWER

OPPORTUNITIES
AUGUST 2015

POWER
POWER GENERATION: OVERALL FUNDAMENTALS WILL REMAIN STRONG (1/2)
Electricity demand forecast (TWh)

Demand for electricity is expected to increase at a CAGR of

7 per cent to 1,894.7 TWh over FY0722
Current production levels are not enough to meet demand;
annual demand outstrips supply by about 7.5 per cent

1894.7

CAGR: 7%

All India per capita consumption of electricity is expected to

reach 1000 KWh by FY15

1348.4
1174.07

690.59

FY07

FY15

FY17E

FY22E

Source: International Energy Agency (IEA), CEA, Demand

estimates based on IEA forecasts, TechSci Research
Notes: TWh - Terawatt Hour,
CAGR - Compounded Annual Growth Rate

AUGUST 2015

For updated information, please visit www.ibef.org

32

POWER
POWER GENERATION: OVERALL FUNDAMENTALS WILL REMAIN STRONG (2/2)
The government is targeting capacity addition of around
88.54 GW under the 12th (201217) and around 100 GW
under the 13th (201722) Five-Year Plan

Addition to generation capacity under

Five-Year Plans (GW)

The expected investments in the power sector during the

12th Plan (201217) is USD250 billion

100
88.54

There is a tangible shift in policy focus on the sources of

power. The government is keen on promotion of hydro,
renewable and gas-based projects, as well as adoption of
clean coal technology

54.96

16.42

19.01

21.13

8th

9th

10th

11th

12th

13th

Source: Business Standard,

Capacity addition estimates by CEA, TechSci Research
Notes: TWh - Terawatt-hour, E - Estimates

AUGUST 2015

For updated information, please visit www.ibef.org

33

POWER
INDIAN POWER SECTOR: MARKET WITH ENORMOUS GROWTH POTENTIAL

The addition of approximately 106 GW to the existing

capacity is expected to boost GDP growth to 8 per cent by
FY17

97

130
136

116
130

110
122

109

120
100

110

140

104
119

160

91

The per-capita electricity consumption of India stood at

1000* in FY15 lower than the global average of 2,803,
representing huge potential for growth

123
135

Addition to generation capacity under

Five-Year Plans (GW)

Peak power requirement in FY14 stood at 136 GW; of

which, a demand of 130 GW was met

14%
12%
10%
8%

80
6%

60

4%

40

2%

20
0

0%
FY08

FY09
Capacity

FY10

FY11

FY12

Peak Requirement

FY13

FY14

Peak Deficit

Source: NTPC presentation, CEA, TechSci Research

Notes: GW - Gigawatt Hour, *Provisional

AUGUST 2015

For updated information, please visit www.ibef.org

34

POWER
CURRENT TRENDS POINT TO OPPORTUNITIES ACROSS THE VALUE CHAIN
Estimated investment of USD6.6 billion for setting up 10,000
MW solar plant in Rajasthan
Adani Power
Germac Energy and
Sepco III (JV)

Generation

Reliance Power

AUGUST 2015

Power Grid Corporation

of India Ltd (PGCIL)

T&D

Coal-fired plant in Tamil Nadu; investment of USD1.3 billion

Nuclear power ambition; studying entry strategy with minimum
investment of USD3.0 billion

Tata Power

Investments
across the
value chain

Company plans to increase capacity to 20 GW by 2020

Developing 3000 MW gas based power plant in Bangladesh;

investment of USD3 million in phases

Loan from ADB of USD600 million for development of high-voltage transmission

system
Plans to invest USD3.7 billion that would fuel its expansion plans
Developing an integrated national grid, including strengthening of five regional
grids; project investment is worth about USD16 billion
Proposed an investment outlay of USD2.8 billion for setting up nine transmission
corridors
Source: BMI India Power Report, TechSci Research
Notes: EHV: Extra High Voltage (Substation), JV - Joint Venture, T&D - Transmission and Distribution, GW - Gigawatt

For updated information, please visit www.ibef.org

35

POWER
RENEWABLE ENERGY IS FAST EMERGING AS A MAJOR SOURCE OF POWER
Hydro power generation capacity in 2014 (GW)

As of 2015, total installed power capacity from renewable

energy sources (excluding Hydro power) was 35.8 GW.
This accounts for 12.4 per cent of the total installed power
capacity and forms 6.5 per cent of the total electricity mix
Wind energy is the largest source of renewable energy in
India; it accounts for an estimated 67 per cent of total
installed capacity (21.1 GW). There are plans to double
wind power generation capacity to 20 GW by 2022

India ranks
sixth in the
world

284.9

Biomass is the second largest source of renewable energy,

accounting for ~12 per cent of total installed capacity in
renewable energy. There is a strong upside potential in
biomass in the coming years

89.7

China

Solar energy accounts for 1 per cent of total renewable

energy installed capacity. The countrys true potential for
solar power stands at an estimated 5,000 TWh per annum
Capacity addition of 30 GW is planned using various
renewable energy technologies during the 12th Five-Year
Plan. Wind Energy is estimated to contribute 15 GW,
followed by solar power at 10 GW and the remaining by
other sources

AUGUST 2015

432.6

Brazil

79.1

US

77.0

Canada

47.5

42.0

Russia

India*

Rest of
World

Source: Renewables 2015 Global Status Report (REN21),

TechSci Research, CEA,
Notes: TWh - Tera Watt Hour; GW Gigawatt
India* - Data is for 2015

For updated information, please visit www.ibef.org

36

POWER
STRONG UPWARD MOMENTUM IN NUCLEAR ENERGY LIKELY IN MEDIUM TO LONG TERM
Currently, the country has net installed capacity of 5.8 GW,
using nuclear fuels, across 20 reactors. Of the 20 reactors,
18 are Pressurised Heavy Water Reactors (PHWR) and two
are Boiling Water Reactors (BWR)

Nuclear energy installed capacity in India (GW)

20

The government aims to quadruple Indias nuclear power

generation capacity to 20 GW by 2020; currently, three
nuclear power reactors of 5,780 MWe capacity are under
construction
Nuclear Power Corporation of India Limited (NPCIL) plans
to construct five nuclear energy parks with a capacity of
10,000 Mwe
The Kudankulam Atomic power project, Tamil Nadu, by
NPCIL is expected to start operating by September 2015
with an installed capacity of 1000 MW

AUGUST 2015

CAGR: 28.1%

5.8

2015

2020E

Source: Ministry of New and Renewable Energy, Business

Monitor International, CEA, TechSci Research
Notes: GW Gigawatt, Mwe - Megawatt Electric,
PHWR - Pressurised Heavy Water Reactors,
BWR - Boling Water Reactors,
E - Estimates

For updated information, please visit www.ibef.org

37

POWER

SUCCESS STORIES
AUGUST 2015

POWER
NTPC: A PUBLIC SECTOR SUCCESS (1/3)
During FY0915, NTPCs sales increased at a CAGR of 6.2
per cent; CAGR in profits was 6.9 per cent during FY 09 13

Revenues and net profit (USD billion)

16.0

As on 31. 03. 2014, NTPC accounts for 17.7 per cent of the
countrys capacity, though it contributes 25.6 per cent of
total power generation
The company has an installed capacity of 43.1 GW. It aims
for 128 GW of capacity by 2032

14.0

12.6

12.0

10.0

2.5

13.9

9.2

12.5

13.0

13.3
2.0

10.2
1.5

8.0
1.0

6.0
4.0

Currently, 22.4GW
construction

of

additional

capacity

is

under

The company plans to set up an 800-MW advanced ultra

supercritical plant, a first-of-its-kind in India
1835 MW capacity commissioned during FY14 and 2675
MW capacity declared commercial during FY14

AUGUST 2015

0.5

2.0
0.0

0.0
FY09

FY10

FY11

FY12

Revenue

FY13

FY14

FY15

Net Profit

Source: NTPC website, Annual Reports,

Economic Times, TechSci Research
Notes: CAGR - Compound Annual Growth Rate,
MW Megawatt, *Decline due to negative translation effect

For updated information, please visit www.ibef.org

39

POWER
NTPC: A PUBLIC SECTOR SUCCESS (2/3)
NTPC has taken over and successfully turned around
numerous sub-optimally performing stations

Impact of NTPC takeover of sub-optimal plants (PLF)

95%

93%

86%

High operational efficiency (indicated by plant load factor

and availability factor) is NTPCs trademark
67%

It is a pioneer in high-efficiency supercritical and ultra

supercritical coal-bed power plants in India
32%

NTPC has formulated a business plan for capacity addition

of around 1,000 MW through renewable resources by 2017

NTPC has already commissioned 95 MW of solar PV

projects and another 15 MW of solar PV projects and 8 MW
small hydro projects are under implementation

18%

Badarpur

Unchahar
As of Acquisition

19%

15%

Talcher

Tanda

For March 31, 2014

Source: NTPC website, Annual Reports, TechSci Research

Notes: PLF - Plant Load Factor, MW - Megawatt

AUGUST 2015

For updated information, please visit www.ibef.org

40

POWER
NTPC: A PUBLIC SECTOR SUCCESS (3/3)
NTPC: Generation capacity over the years (GW)

Capacity addition at a CAGR of 17.7 per cent during 1982

2015
Highest ever capacity addition of 43.04 GW during FY15.
Average annual capacity addition of approximately 21 GW
required till 2017

41.18
30.64

31.7

FY09

FY10

34.19

43.13

45.05

37.01

26% of the existing capacity needs to be added by FY17 to

achieve 8% GDP growth
As of 2015, the companys total installed power generation
capacity stood at 45.05 GW

FY11

FY12

FY13

FY14

FY15

Source: NTPC website, Annual Reports,

Economic Times, TechSci Research
Notes: PLF - Plant Load Factor,
GW Gigawatt

AUGUST 2015

For updated information, please visit www.ibef.org

41

POWER
TATA POWER: SURGING AHEAD IN THE PRIVATE SECTOR (1/2)
During FY0915, Tata Powers revenues increased at a
CAGR of 6.9 per cent to USD5.70 billion

Revenue (USD billion)

The company has an installed generation capacity of 8.6

GW in India and is present in all segments of the power
sector
The thermal power generation capacity stands at 7.6 GW,
while clean energy generation such as hydro, solar and
wind stands at 1.2 GW

CAGR: 6.9%
6.08

5.91

5.70

FY13

FY14

FY15

5.55

3.81

4.00

FY09

FY10

4.26

The company is developing its first 4 GW Ultra Mega Power

Project at Mundra (Gujarat) based on supercritical
technology
Its international presence includes a 30 per cent stake in
coal mines and a geothermal project in Indonesia, and a
hydro project in Bhutan in partnership with The Royal
Government of Bhutan.
The company is eyeing the clean energy segment; it
recently acquired stakes in two Australian companies in the
sector

FY11

FY12

Source: Company website, Annual Reports,

Economic Times, TechSci Research
Notes: *- Decline due to negative translation effect, MW - Megawatt

Tata Powers defense engineering unit is planning to invest

around USD83.3 million in Vemagal, Kolar district.

AUGUST 2015

For updated information, please visit www.ibef.org

42

POWER
TATA POWER: SURGING AHEAD IN THE PRIVATE SECTOR (2/2)
Installed capacity in Mega Watts (MW)

The company estimates its installed capacity to expand

fivefold in the next five years to 25 GW
Recognising the enormous potential in renewable energy,
the company intends to increase the share of renewable
sources to 25 per cent of its total generating capacity in the
near future

25000

In the year 2014, the company acquired a 39.2 MW wind

farm at Jamnagar in Gujarat and commissioned a 25-MW
solar power project at Palaswadi in Maharashtra
As on 2015, company has installed capacity of 8,726 MW
~10 GW of capacity is under execution or development

8521

8584

8726

FY13

FY14

FY15

5297
2785

2977

3127

FY09

FY10

FY11

FY12

FY17E

Source: Company website, Company Presentation,

FY17 estimate as per press release, 15th July 2011
Notes: MW - Megawatt, CAGR - Compounded Annual Growth Rate

AUGUST 2015

For updated information, please visit www.ibef.org

43

POWER
RELIANCE POWER: ON A GROWTH TRAJECTORY (1/2)

Sasan UMPP is the largest integrated power plant and coal

mining project globally

FY10

The companys coal production capacity has reached ~100

MTPA. It is the largest private sector coal producer in India
The companys ongoing projects would increase its
production capacity to 20,000 MW of coal-fired capacity,
2400 MW of gas-fired capacity and 5,292 MW of
hydroelectric capacity

FY11

FY12
Revenue

FY13

FY14

170.59

170.32

848.07
186.24

184.89

430.72

231.21

166.69

4.37

Additional three units of 660 MW each at the 3,960 MW

Sasan project were commissioned in FY14

144.22

907.12

It won three of the four Ultra Mega Power Projects (UMPPs)

awarded by Government of India so far. These three
projects are located in Sasan (Madhya Pradesh),
Krishnapatnam (Andhra Pradesh), and Tilaiya (Jharkhand)

1136.82

Revenues and net profit (USD million)

Reliance Power has 6 GW of operational capacity and

approximately 15 GW under implementation

FY15

Net Profit

Source: Reliance Power website, Annual Reports,

TechSci Research
Notes: -Decline due to negative translation effect,
MW Megawatt, MTPA - Million Tonnes Per Annum

The 100 MW Concentrated Solar Power (CSP) project in

Dhursar, Rajasthan has been commissioned in November
2014

AUGUST 2015

For updated information, please visit www.ibef.org

44

POWER
RELIANCE POWER: ON A GROWTH TRAJECTORY (2/2)
Generating capacity (million units)

Both units of the 600-MW Butibori coal project in

Maharashtra are ready for production
At the 2.4-GW gas project in Samalkot, Andhra Pradesh,
four gas turbines are ready for generation

876
771.6

912

966

811.1

Hydro power projects with capacity of 5.3 GW are currently

under development in Arunachal Pradesh (4.2 GW),
Himachal Pradesh (672 MW) and Uttarakhand (400 MW)

FY10

FY11

FY12

FY13

FY14

Source: Reliance Power website,

Corporate Presentation, Annual Reports, TechSci
Research
Notes: MW - Megawatt, E - Estimate

AUGUST 2015

For updated information, please visit www.ibef.org

45

POWER

USEFUL INFORMATION
AUGUST 2015

POWER
INDUSTRY ASSOCIATIONS (1/2)
Council of Power Utilities
A-2/158, Janakpuri, New Delhi-110058, India
Tel: 91 11 25618472, 45652708
Fax: 25611622
E-mail: [email protected], [email protected]
Web site: www.indiapower.org

Hydro Power Association (India)

Flat no 6, Green Park Apartment, Shriram Society, Warje,
Pune - 411058, Maharashtra, India
Tel: 91 20 25233338
E-mail: [email protected], [email protected],
[email protected]
Website: http://hpaindia.org/

Bureau of Energy Efficiency (BEE)

Ministry of Power, 4th Floor, SEWA Bhawan, R. K. Puram,
New Delhi 110066, India
Tel: 91 11 26179699
Fax: 91 11 26178352
E-mail: [email protected]
Website: http://www.beeindia.in/

AUGUST 2015

For updated information, please visit www.ibef.org

47

POWER
INDUSTRY ASSOCIATIONS (2/2)
Indian Wind Energy Association (INWEA)
PHD House, 3rd Floor, Opp. Asian Games Village, August
Kranti Marg, New Delhi-110016, India
Tel: 91 11 26523042
E-mail: [email protected]
Web site: http://www.inwea.org/

AUGUST 2015

For updated information, please visit www.ibef.org

48

POWER
GLOSSARY (1/2)
CAGR: Compound Annual Growth Rate
FDI: Foreign Direct Investment
FY: Indian Financial Year (April to March)
So FY10 implies April 2009 to March 2010

GW: Gigawatt
M&A: Merger and Acquisition
MW: Megawatt
NBFC: Non-Banking Financial Company
PE: Private Equity
PLF: Plant Load Factor
R&D: Research and Development

AUGUST 2015

For updated information, please visit www.ibef.org

49

POWER
GLOSSARY (2/2)
R-APDRP: Restructured Accelerated Power Development and Reform Programme
T&D: Transmission and Distribution
TWh: Terawatt-Hour
RGGVY: Rajiv Gandhi Grameen Vidyutikaran Yojana

USD: US Dollar
Wherever applicable, numbers have been rounded off to the nearest whole number

AUGUST 2015

For updated information, please visit www.ibef.org

50

POWER
EXCHANGE RATES
Exchange rates (Fiscal Year)

Exchange rates (Calendar Year)

Year

INR equivalent of one USD

Year

INR equivalent of one USD

200405

44.81

2005

43.98

200506

44.14

2006

45.18

200607

45.14

2007

41.34

200708

40.27

2008

43.62

200809

46.14

2009

48.42

200910

47.42
2010

45.72

2011

46.85

2012

53.46

2013

58.44

2014

61.03

2015(Expected)

61.03

201011

45.62

201112

46.88

201213

54.31

201314

60.28

2014-15(Expected)

60.28

Average for the year,

AUGUST 2015

For updated information, please visit www.ibef.org

51

POWER
DISCLAIMER
India Brand Equity Foundation (IBEF) engaged TechSci to prepare this presentation and the same has been prepared
by TechSci in consultation with IBEF.
All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The
same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any
medium by electronic means and whether or not transiently or incidentally to some other use of this presentation),
modified or in any manner communicated to any third party except with the written approval of IBEF.

This presentation is for information purposes only. While due care has been taken during the compilation of this
presentation to ensure that the information is accurate to the best of TechSci and IBEFs knowledge and belief, the
content is not to be construed in any manner whatsoever as a substitute for professional advice.
TechSci and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in
this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of
any reliance placed on this presentation.
Neither TechSci nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission
on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.

AUGUST 2015

For updated information, please visit www.ibef.org

52