birla power
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Should Birla Re-enter Power Sector
Neha Gupta 2k12b02Rahul Srivastava 2k12b09Rajpreet Singh Walia 2k12b11Suniti Saxena 2k12b28Nitesh Singh Sengar 2k12b48
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Power Sector Overview
India has the world’s fifth-largest electricity generation
GDP growing at around 5.0% in FY 12-13
Electricity demand growth 10-12%
Power deficits range between 9% &13%
Installed Capacity 211,766 MW as on Mar 2013
Percentage electrification 65%
Renewable generation capacity of 25,856 MW (12.5 % of totalgeneration capacity)
State-level generation companies account for about 47.13% ofgeneration
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Overview
Private Sector Generation 29.49 % (62459 MW) of total installed
Transmission almost under Public sector (Power Grid Corp Ltd)
Distribution under state ownership – T&D losses 28.4% (FY 2012)
Renewable energy -12.20% of installed capacity but about 4%generated energy
Target to generate 20,000 MW of solar power by 2020
Total manpower in the power sector at the end of 10th plan wasapproximately 9.5 lakhs
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Foreign Direct Investment (FDI) inIndian Power Sector
There is a significant drop in investor confidence in the last financialyear and the continuing policy stalemate is not doing any better forthe investor confidence. As per extant policy, Foreign DirectInvestment (FDI) up to 100% is permitted in the power sector, under theautomatic route, for;
Generation and transmission of electric energy produced in hydroelectric, coal/lignite based thermal, oil based thermal and gas
based thermal power plant Non-Conventional Energy Generation and Distribution;
Distribution of elective energy to households, industrial, commerciaand other users; and
Power Trading
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FDI IN POWER Sector (in rs. ‘crore)
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Developments in Thermal, Wind, Solar & Hydro sector
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Hydro energy
India ranks 5th in terms of exploitable hydro-potential on globalscenario
The present installed capacity as on 31 October 2012 isapproximately 39,291.40 MW which is 18.77% of total ElectricityGeneration in India
hydro potential assessed to be about 84,000 MW
56 sites for pumped storage schemes with an aggregate installedcapacity of 94,000 MW have been identified. It is the most widelyused form of renewable energy.
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Solar energy
In July 2009, India unveiled a US$19 billion plan to produce 20 GW osolar power by 2020
Under the National Action Plan From August 2011 to July 2012, Indiawent from 2.5 MW of grid connected photovoltaics to over 1,000MW
Thar Desert has been set aside for solar power projects, sufficient to
generate 700 GW to 2,100 GW
Various Solar power projects have been set up in Gujarat,Maharashtra & Rajastan.
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Wind energy
Wind energy is one of the fastest-growing renewable energy sectoin the country
It has cumulative deployment of over 13,000 MW
It nearly 70% of the installed capacity in the renewable energysector in the country
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Thermal power
India accounts for roughly two-thirds of the power generated inIndia
Reserves for thermal power generation include 59 billion tons ofmineable coal, 775 million metric tons of oil reserves and natural gareserves of 1,074 billion cubic meters.
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Strong growth in generation capacity led percapita consumption urbanization
A growing developing and raw sector so publicand private sector can unlock value forthemselves
Abundant resources for power production
available especially renewableRegulatory mechanism for tariff settingestablished
Emergence of strong and globally comparablecontrol utilities like power grid
Storage of coal in power produmajor source of power
Government giveaways for freefarmer for political favours
Poor pipeline connectivity and
resulting in financial losses
Overloading and lack of adeqpower support
Government introducing policies like tax freebonds and low interest rates on infrastructure forpower sector
Investment in alternative sources of energymajorly renewable
Private sector participation into power sector
Introduction of FDI and FII policies
Investment in clean technology
Lots of time consumed in goveclearances
Depending on non-renewableimports
Losses leading to shutting of prcompanies
Blackouts due to gap in demapower
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Birla’s into power
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Thermal and hydro energy
India has an installed capacity of about 175 GW with thermal andhydro power contributing 65 percent and 22 percent respectively.The balance is made up by renewables (10 percent) and nuclear (percent). It is estimated that the generation capacity required in2017 to sustain India's economic growth will be an additional 100GW.
We are well-positioned to explore the potential of the sector with itslarge installed base of captive power plants in various businessesand its exposure to mining.
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Solar energy
The Government of India under the Jawaharlal Nehru National SolaMission (JNNSM) has set an aggressive target of 1,100 MW by 2013(11th Five-Year Plan) and 20,000 MW by 2022 (13th Five-Year Plan).In addition, many state governments have announced statepolicies on solar energy aided by the fledgling Renewable EnergyCertificate. A total potential of 64,000 MW by 2022 is estimated bybusiness research analysts.
The Birla's team is currently focused on the development of utilityscale solar power plants to position itself as an independent powerproducer (IPP) based on photovoltaic (PV) technology. It is alsocurrently participating in the development of a 5-MW solar PV planin Rajasthan, apart from various national and state governmentprograms to develop multi-MW solar PV power plants.
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Wind energy
Essel Mining India Limited (EMIL), a part of our Group, India's first trulglobal corporation with operations in 36 countries. forayed intopower generation in 2005 by installing 75-MW windmills at Dhule inMaharashtra.
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Thought of reentering
Kumarmangalam Birla promoted conglomerate is looking at re-entering the business through a two-pronged manner.
On one hand it will form a new company to acquire IPPs orIndependent Power Producers looking to sell out and is in theprocess of identifying potential acquisition targets.
On the other the company plans to participate in the government'case I and case II bids and the second phase of the 4,000 MWUMPPs through existing group companies.
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Thought of reentering
Unlike earlier attempts to build power plants from scratch, the grouwill now acquire projects that already have land and environmentaapprovals, and just need to be built.
The second-stage entry will also enable the group to start producinpower, the third and final stage in the generation process, morequickly.
Plans of re-entering into power sector by investment of Rs. 6,000crores in solar energy in Rajasthan
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Conclusion
Power Industry is moving from negotiation and guaranteedarangements of past era to more open market and performancebased competition
Private sector has emerged as key player in conventional andrenewable power
For us, it is right time to re-enter and warm up in the hearts of thegovernment
We should utilise our mutil-skilling to corner scarce resources andtranslate renewables into producing assets.