POWER SECTOR - Industry Analytics

ALLIANCE BUSINESS
SCHOOL
INDUSTRIAL ANALYTICS
PGP-I
Power sector
SUBMITTED TO : PROF. SAMIK SHOME
DATE : 6/4/2009
SECTION : C
SUBMITTED BY: GROUP NO: 2

ADITHYA RAJ (08PG136)
ARVIND KUMAR SHARMA (08PG156)
LOKESH MAHAJAN (08PG168)
POONAM RATHI (08PG179)
SAUMYA SAURABH (08PG192)
SWATI AGARWAL (08PG204)
Power Sector Report (Apr - 2009)
CONTENT
TOPIC PAGE NO.
EXECUTIVE SUMMARY 7
Chapter 1 OVERVIEW OF POWER SECTOR
1.1 Introduction 10
1.2 Global Overview 11
Chapter 2 REVIEW OF LITERATURE 16
Chapter 3 POWER SECTOR IN INDIA
3.1 Power Sector in India 22
3.1.1 Emergence of regional Power systems 23
3.1.2 Generation 23
3.1.3 Transmission 26
3.1.4 Power for All by 2012 31
3.1.5 Distribution 33
Chapter 4 SEGMENTS IN POWER GENERATION
4.1 Thermal Power 41
4.2 Hydro Power 45
4.3 Nuclear Power 47
4.4 Solar 48
4.5 Wind 49
4.6 Small Hydro 50
Chapter 5 REFORMS IN POWER SECTOR
5.1.1 Pre – Reform Stage 52
5.1.2 Electricity Act 2003 55
5.1.3 Electricity Act 2007 60
Chapter 6 IMPACT OF POWER SECTOR
Power Sector Report – ABS, Bangalore 2 | Page

6.1 Impact of Power Sector 64

6.1.1 Local Impact 64
6.1.2 Regional Impact 65
6.1.3 Global Impact 66
6.2 National Environmental Legislation Affecting the Sector 66
6.3 National Environmental Policies Relevant to Sector 67
Chapter 7 STUDY OF SELECTED COMPANIES
7.1 NTPC Ltd. 70
7.2 Reliance Infrastructure 75
7.3 Tata Power Ltd. 78
7.4 Power Grid Corporation 82
7.5 Torrent Power Ltd. 85
7.6 JP Hydropower 87
7.7 Energy Develop 89
7.8 KSK Energy 90
7.9 GVK Power 92
7.10 Indowind Energy 95
Chapter 8 ANALYSIS OF POWER SECTOR
8.1 Ratio Analysis 99
8.2 Regression Analysis 120
8.3 Trend Analysis 124
8.4 Judgemental Analysis 128
8.5 Expert’s Opinion 129
8.6 Porter’s Five Force Model 131
8.7 SWOT Analysis 133
Chapter 9 ISSUES AND CHALLENGES 137
Chapter 10 CONCLUSION AND FINDINGS 140
REFERENCES 143
APPENDIX 147

LIST OF TABLES
TOPIC PAGE NO.
1. OECD Multinational Electricity companies 13

2. Gap between demand and supply of power 24
3. Growth of Transmission 28
4. Details of Sub-stations region 29
5. Details of Funds released under APDRP 35
6. Power Sector Reforms 52
7. Ratio Analysis of NTPC 103
8. Ratio Analysis of Power Grid Corp. 104
9. Ratio Analysis of Reliance Infra 105
10.Ratio Analysis of Tata Power 106
11.Ratio Analysis of Torrent Power 107
12.Ratio Analysis of Indowind Energy 108
13.Ratio Analysis of Energy Develop 109
14.Ratio Analysis of GVK Power 110
15.Ratio Analysis of JP Hydro 111
16.Ratio Analysis of KSK Energy 112
17. Comparative Ratio Analysis (Top 5 Companies) 113
18. Comparative Ratio Analysis(Bottom 5 Companies) 116
19.Trend Analysis 123
20. Porter’s Five Forces analysis 130

LIST OF FIGURES
TOPIC PAGE NO.
1. World Marketed Energy Consumption,1980-2030 12

2. Comparative Per Capita Consumption of Electricity 14
3. Comparison of Energy Intensity 44
4. State-wise hydro-power generation 46
5. Growth of NTPC 73
6. NTPC Performance 74
7. Output of trend Analysis – Exponential method 124
8. Output of trend Analysis – Moving Average method 125
9. Porter’s Five Force Model 129
10. SWOT Analysis 131
11. SWOT Analysis Framework 132

POWER SECTOR

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

important infrastructure facility without which no industrial activity can be thought of in
modern times. Increasing automation of Indian industries has created huge demand of power
in India. This huge demand has resulted into demand supply gap in India in recent times.
This report is based on the extensive study of the power sector in India. Both global and
domestic perspectives of power sector focusing more on Indian players have been looked
upon in this report. It includes the literature review by scholars which has analyzed the
subject of power sector more extensively. The objective of this report is to get a
comprehensive and apparent knowledge of the power sector, and to study the changes in
power sector over a period of time there by analyzing various aspects of the power sector. In
the report the power generation companies of the industry chosen, are the top five and bottom
five companies of the power sector in India, based on the sales turnover. The trends in the
demand, supply and generation in the power sector is discussed through the trend analysis.
Before 2001, India’s electricity-supply was mainly owned and operated by public sector. It
was running under the risk of bankruptcy. This created a serious impediment to investments
in the sector at the time when India desperately needed them. This led to the emergence of
Private players in the power sector.
The NTPC, Reliance Infra, Tata Power, Power Grid, & Torrent Power are the market leaders
in the power sector and have high Cumulative Annual Growth Rate (CAGR). This is because
of the government support, inflow of foreign investment, growing demand and use of latest
technology for power generation and transmission. The best management policies are
adopted by these companies. The small players GVK power, Indowind Energy, Energy
Development, JP Hydro, and KSK energy are also imparting new technology, and
management policies to survive the competition and meet the demand of power sector.
The methodology used in report includes comparative analysis of the top 5 and bottom 5
companies of the sector. The Potter’s five forces analysis, SWOT analysis, Trend analysis &
Ratio analysis are used to analyze the industry of power sector. The various analysis shows
that there has been a continuous growth in generation and consumption of power in India.
Thermal, hydro and nuclear are three major source of power generation From the installed
capacity of only 1,362mw in 1947, has increased to 97000 MW as on March 2000 which has
since crossed 100,000 MW mark India has become sixth largest producer and consumer of
electricity in the world equaling the capacities of UK and France combined. The number of
consumers connected to the Indian power grid exceeds is 75 million. Rural electrification is
one significant initiative of the industry to trigger economic development and generate
employment by providing electricity as an input for productive uses in agriculture and rural
industries, and improve the quality of life of the rural people.
The International Energy Outlook 2006 (IEO2006) projects strong growth for worldwide
energy demand over the 27-year projection period from 2003 to 2030. Much of the growth in
energy demand is among the developing countries in Asia, which includes China and India;
demand in the region nearly triples over the projection period. Total primary energy
consumption in the developing countries grows at an average annual rate of 3.0 percent
between 2003 and 2030. In contrast, for the developed countries—with its more mature
energy-consuming nations—energy use grows at a much slower average rate of 1.0 percent
per year over the same period. This huge increase in projected demand of energy in India and
China makes analysis of energy sector of these countries very important.
World electricity generation rose at an average annual rate of 3.7% from 1971 to 2004,
greater than the 2.1% growth in total primary energy supply. Total world consumption of
marketed energy is projected to increase by 50 percent from 2005 to 2030.

CHAPTER 1
OVERVIEW OF POWER SECTOR

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

the availability, reliability and quality of the power sector. As the Indian economy continues
to surge ahead, electrification and electricity services have been expanding concurrently to
support the growth rate. The demand for power is growing exponentially and the scope of
growth of this sector is immense.
Existing generation suffers from several recurrent problems. The efficiency and the
availability of the coal power plants are low by international standards. A majority of the
plants use low-heat-content and high-ash unwashed coal. This leads to a high number of
airborne pollutants per unit of power produced. Moreover, past investments have skewed
generation toward coal-fired power plants at the expense of peak-load capacity. In the context
of fast-growing demand, large T&D losses and poor pooling of loads at the national level
exacerbate the lack of generating capacity.
India is one of the main manufacturers and users of energy. Globally, India is presently
positioned as the 11th largest manufacturers of energy. It is also the worlds’ 6th largest energy
users. In spite of its extensive yearly energy output, Indian power sector is a regular importer
of energy because of huge disparity.
Global and Indian economy have decelerated, but power is one of the few commodities in
short supply in India. So, despite the sluggishness in production and demand for
manufactured products, India remains power hungry, both in terms of normal and peak power
demand. Power is derived from various sources in India. These include thermal power,
hydropower or hydroelectricity, solar power, biogas energy, wind power etc. The distribution
of the power generated is undertaken by Rural Electrification Corporation for electricity
power supply.
Power Sector Report – ABS, Bangalore 10 | P a g e

1.2. GLOBAL OVERVIEW
The energy required to support our economies and lifestyles provides tremendous
convenience and benefits. Energy consumption is reportedly higher in countries where less
than 5 % of the population lives below the poverty line than it is in countries where most
people live in poverty -- four times higher. For example, Americans make up less than 5 % of
the world’s population yet consume 26 % of the world’s energy. World electricity generation
rose at an average annual rate of 3.7% from 1971 to 2004, greater than the 2.1% growth in
total primary energy supply. This increase was largely due to more electrical appliances,
development of electrical heating in several developed countries and rural electrification
programmes in developing countries.
De-regulation in areas of the global energy markets has led to fierce competition. Now more
than ever electricity has to be produced at a lower cost with many countries imposing ever
tightening environmental legislation to reduce the impact power generation has on the
environment. The enormous challenges are recognised in providing electricity as efficiently
as possible and strive to develop technology to meet your needs. Collectively, developing
countries use 30% of the world's energy, but with projected population and economic growth
in those markets, energy demands are expected to rise 95 %. Overall global consumption is
expected to rise 50 % from 2005 to 2030.
World energy consumption is projected to expand by 50% from 2005 to 2030 in the IEO2008
reference case projection. Although high prices for oil and natural gas, which are expected to
continue throughout the period, are likely to slow the growth of energy demand in the long
term, world energy consumption is projected to continue increasing strongly as a result of
robust economic growth and expanding populations in the world’s developing countries.
Energy demand in the OECD economies is expected to grow slowly over the projection
period, at an average annual rate of 0.7%, whereas energy consumption in the emerging
economies of non-OECD countries is expected to expand by an average of 2.5 % per year.

China and India—the fastest growing non-OECD economies—will be key contributors to
world energy consumption in the future. Over the past decades, their energy consumption as
a share of total world energy use has increased significantly. In 1980, China and India
together accounted for less than 8 % of the world’s total energy consumption. In 2005 their
share had grown to 18 %. Even stronger growth is projected over the next 25 years, with their
combined energy use more than doubling and their share increasing to one-quarter of world
energy consumption in 2030 in the IEO2008 reference case. In contrast, the U.S. share of
total world energy consumption is projected to contract from 22 % in 2005 to about 17 % in
2030. Energy consumption in other non-OECD regions also is expected to grow strongly
from 2005 to 2030, with increases of around 60 % projected for the Middle East, Africa, and
Central and South America. A smaller increase, about 36 %, is expected for non-OECD
Europe and Eurasia (including Russia and the other former Soviet Republics), as substantial
gains in energy efficiency result from the replacement of inefficient Soviet-era capital stock
and population growth rates decline.
Fig .1: World Marketed Energy Consumption, 1980 - 2030
Source: EIA International Energy Annual 2005(June-October 2007)

Oil for power generation has been displaced in particular by dramatic growth in nuclear
electricity generation, which rose from 2.1% in 1971 to 15.7% in 2004. The share of coal
remained stable, at 40% while that of natural gas increased from 13.3% to 19.6%. The share
of hydro-electricity decreased from 23.0% to 16.1%. Due to large programmes to develop
wind and solar energy in several OECD countries, the share of new and renewable energies,
such as solar, wind, geothermal, biomass and waste increased. However, these energy forms
remain limited: in 2004, they accounted for only 2.1% of total electricity production. The
share of electricity production from fossil fuels has gradually fallen, from just under 75% in
1971 to 66% in 2004. This decrease was due to a progressive move away from oil, which fell
from 20.9% to 6.7%.
Table 1: OECD Multinational Electricity Companies

Company Activity Assets Countries Active
AES Generation 1666MW China, India, Pakistan, Sri Lanka
EDF Generation 1684MW China, Laos, Vietnam
Generation &
Tractebel 848MW China, Thailand, Laos
supply
Enron Generation 204MW Philippines, Guam
China, Philippines, Singapore,

Intergen Generation 1830MW
Australia
Mirant Generation 2261MW Philippines
Transalta Generation 280MW Australia
IP Generation 3817MW Australia, Pakistan, Thailand, Malaysia
CDC Generation 810MW Bangladesh
Source: http://www.tni.org/books/yearb05corporations.pdf.
As per the recent survery, the global electrical & electronics market is worth $1,038.8 billion,
which is forecasted to grow to $ 1,216.8 billion at the end of the year 2008. If electrical &
electronics production statistics are considered, the industry accounted for $1,025.8 billion in
2006, which is forcasted to reach $1,051.5 billion in future.

Fig.2: Comparative Per Capita Consumption Of Electricity (Kwh)
The per capita consumption is seen to be far behind from the world average and very less
when compared to other countries. So there is a need to improve it.
Though India has achieved many milestones in generation still the there is a wide gap
between demand and supply of power. This is the most important issue to be concerned.

CHAPTER 2
LITERATURE REVIEW

2.1 REVIEW OF LITERATURE
Schwartz (2008), Studies the business of NAILD distributor through this article. The NAILD
is an organisation supporting lighting distributors in the US with publications, training, and
conferences. According to him, recent changes and trends in the lighting market provide new
opportunities. The keys to taking advantage of the opportunities is to understand the market,
know where to get more information, provide updates to your customers, and turn
information into active marketing and promotional efforts. The Energy Independence and
Security Act of 2007 add to the programs and efforts introduced in EPACT 2005. A key
component of the ENERGY STAR qualified light fixtures program is the Advanced Lighting
Package (ALP). As market trends and legislation move purchasers away from inefficient
technologies and towards energy-efficient products, NAILD distributors that become
ENERGY STAR Partners have an opportunity to increase sales and profits.
Sreekumar (2008) reviews the market-oriented power sector reforms initiated in India in the
early 1990s. It brings out a public interest oriented critique of the three phases of the reforms
—firstly, privatization of generation, secondly, state sector restructuring and finally, the
ongoing reforms since the passage of the Electricity Act 2003. Reforms were taken up as a
response to the crisis in the sector. The article questions the success of the process in solving
the crisis. While acknowledging positive elements like increase in transparency and
participation, it criticizes the process for neglect of development issues like rural
electrification and energy efficiency. The article concludes with some thoughts on developing
an alternate reform approach.
Augustine (2007), tries to put forth a model pertaining to transportation because India is
facing a huge increase in power consumption. The model is done with an aid of GAMS

(General Algebraic Modelling System). The power sector is represented in the model by
production capacities, cost of production and transmission, demand for power and the
distances between power plants and consumption centres. The author has considered major
power generating areas of the country like Ranchi, Bhopal, bhubwaneshwar, dhanbad,
Vishakhapatnam etc. The model described is very realistic, scalable and easy to implement,
but has only considered coal, hydroelectric and natural gas technologies. It can be expanded
to include other technologies and also can be made dynamic to provide solutions for different
time periods representing the maturing of the power generation plants during the duration of
the model.
Remes (2007) talks about Russia fourth largest user of electricity in the world, he talks about
RAO UES which controls all the transmission, distribution and supply of electricity, it
controls everything except nuclear power. Anatoly Chubais, The very core of the reform has
been to separate competitive businesses from natural monopolies, both legally, functionally
and regulatory. Consequently, competitive parts – generation companies, supply/sales
companies and service companies – have been separated into legally different companies
from natural monopolies – from Transmission Company, distribution companies and system
Operator Company. It is of utmost importance for the future, to prevent the creation of any
monopoly structures on the markets. UES is suggesting a change in the law allowing the
Antimonopoly Agency to interfere immediately when the share of any company in any
regional free-flow markets. Finally, concluding it can be said that Russia is ahead of the EU
in the reform of the power sector and power sector monopolies. Russia has been able to
create very sophisticated markets, with new elements, and with rational elements to the
regulations.
Yemula, Medhekar, Maheshwari, Khaparde, Joshi(2007) have put their opinion about
Interoperability in the power sector. According to Wikipedia, Interoperability is a property
referring to the ability of diverse systems and organizations to work together (inter-operate).
The term is often used in a technical systems engineering sense, or alternatively in a broad
sense, taking into account social, political, and organizational factors that impact system to

system performance. Basically they have considered organizational, application, information
and technical level interoperability. They believe that organization interoperability is ensured
by standard inter-organization protocol, which expresses the way in which organization share
data. Application Interoperability is achieved by enforcement of inter-application protocol.
Information interoperability is ensured at lower level by the compliance of standard
information model. Technical Interoperability is the result of application of standard device
level protocols.
Singh (2006) address the Power sector reforms in India. Reforms were initiated at a juncture
when the sector was plagued with commercial losses and burgeoning subsidy burden.
Investment in the sector was not able to keep pace with growing demand for electricity. This
paper takes stock of pre-reform situation in Indian power sector and identifies key concerns
that led to initiation of the process of reform. The paper discusses major policy and
regulatory changes undertaken since the early 1990s. The paper also illustrates changes in the
market structure as we move along the reform process. It also discuss some of the major
provisions of the recently enacted Electricity Act 2003 that aims to replace the prevailing acts
which govern the functioning of the power sector in the country. In this context, it discuss
two issues arising out of it, namely open access and multi-year tariff that we think would
have a significant bearing on the performance of the sector in the near future. The paper also
evaluates the reform process in the light of some of the regulatory changes undertaken.
Finally, the paper briefly discusses the issues involved in introduction of competition in the
power sector primarily through development of a market for bulk power.
Kumar, Khetan & Thapa (2005) highlights that India has set itself an ambitious target of
more than doubling per-capita electricity consumption by 2011. Indian power sector, with
current electricity shortages of over 11% of peak and 7% of energy, will be one of the key
determinants to future growth. The Indian government has worked steadily to liberalise the
sector and initiated reforms that culminated in the Electricity Act 2003. The Act brought
together structural and regulatory reforms designed to foster competitive markets, encourage
private participation and transform the state’s role from service provider to regulator. The Act

afforded consumers the ability to directly source their electricity from suppliers using
existing networks and recognised trading as a separate line of business. Despite the potential
offered by the India’s power sector, investors have long been weary of the sector’s
bureaucracy and regulatory complexity. With a critical mass of progress in regulatory reforms
and soaring economic growth, the Indian power sector is now primed for take off. How India
deals with the remaining challenges of the restructuring process and emerging fuel shortages
will dictate what happens in the years to come.
Newbery (2005) says that Modern infrastructure, particularly electricity, telecom and roads,
is critical to economic development. Electricity provides light, the ability to use modern
equipment, computers and access to ICT. Telecom facilitate information exchange and access
to the rest of the world, while transport infrastructure is critical for trade, and by lowering
transport costs extends the market and increases competition. If there is a surplus of
infrastructure, more investment adds little to total output, but if there is a deficit, then
shortages constrain total output, magnifying the impact, so that the return to reducing that
deficit can be very high indeed.
Banerjee (2004) says that the earliest electric power systems were distributed generation
(DG) systems intended to cater to the requirements of local areas. Subsequent technology
developments driven by economies of scale resulted in the development of large centralized
grids connecting up entire regions and countries. The design and operating philosophies of
power systems have emerged with a focus on centralized generation. During the last decade,
there has been renewed interest in DG. This paper reviews the different technological options
available for DG, their current status and evaluates them based on the cost of generation and
future potential. The relevance of these options for a developing country context is examined
using data for India.
Different definitions of DG have been proposed. Some have linked this to the size of the
plant, suggesting that DG should be from a few kW to sizes less than 10 or 50MW. This
provides a review of alternative definitions of DG and suggests that DG be defined as the

installation and operation of electric power generation units connected directly to the
distribution network or connected to the network on the customer site of the meter. DG is
also referred to as dispersed generation or embedded generation. DG options can be
classified based on the prime movers used—engines, turbines, fuel cells or based on the fuel
source as renewable or non-renewable. There are a large number of possible system
configurations.
Swain, Singh and Kumar (2004) ,describes there were many inhibitors to growth in power
sector but the main problem in the growth was Government Policy, which made it difficult
for a private player to enter. This further created the problem that Indian entrepreneurs didn’t
have enough knowledge and experience in developing power projects. A whole new system
was evolved where private players were invited to be an active participant. The system
demanded financial, political and other major requirement in roads and communication.
Some of the bold steps taken in the Act were moving generation and distribution out of
‘License Raj’, opening access to national grid and demolishing the ‘Single Buyer’ model.
The failure of the large structure and the changing global scenario has forced Government to
think of ways to revive this fundamental infrastructure sector. Two ways that government can
count on for future growth of this sector are “Small Power Plants” and “Clean Development
Mechanism”.
Soronow, Pierce & Wang(2003), introduces FEA's Power Sector Model as the next step in
derivatives pricing. Here the authors identified weather and marginal fuel prices as
independent variables driving load levels and power prices. This is grounded in the
understanding that, to a large extent, weather dictates load conditions, which, together with
the marginal fuel price, determines the power price. The second step is to conduct a detailed
empirical study of the nature and relationships among the various components under
analysis. The goal of the study is twofold: to understand the relationship between the
variables, as well as to determine the seasonal aspects inherent in each component. The
approach is capable of capturing the essential power price characteristics such as seasonality
in price and volatility, mean-reversion, price spikes, volatility clustering, and regional

correlations. The model is self-contained, and when fully calibrated, Monte Carlo simulation
provides the basis for valuing power contracts and generation assets directly.
Tongia (2003), describes that India’s power sector is undergoing significant reforms,
beginning in 1991, which are changing and diminishing the role of the government, which
functioned earlier as the near monopoly integrated utility. Because of significant financial
difficulties faced by the SEBs 1991 saw the enactment of legislation, the 1991 Electricity
(Supply) Act, which opened up the sector to private participation, primarily in generation.
The current thrust of reforms is on the distribution sector, reducing losses and increasing
efficiency. This might just be a precursor to privatization, but there is a goal to full
electrification by 2012. In the last few years, the T&D losses have stabilized somewhat, but
there is only limited interest of private players into the sector, especially new players. Those
who state that overall financial losses have increased after the reforms do not factor in the
increase in costs due to generator price increases regardless of reforms, even from
government generators and PSUs. Electricity Bill 2001 opens up the sector to private
participation with limited approval obligations. This sector is vital to India’s growth and
development. At the same time they have not sufficiently addressed structural changes for
grid operation and discipline (dispatch), such as based on load duration curves, or access and
penetration for the poor (especially how that affects financial performance). They are a step
in the right direction, ending years of Government control and mindset.

CHAPTER 3
POWER SECTOR IN INDIA
3.1. POWER SECTOR IN INDIA
The process of electrification commenced in India almost with the developed world, in the
1880s, with the establishment of a small hydroelectric power station in Darjeeling. However,
commercial production and distribution started in 1889, in Calcutta (now Kolkata). In the
year 1947, the country had a power generating capacity of 1,362 MW. Generation and
distribution of electrical power was carried out primarily by private utility companies such as
Calcutta Electric. Power was available only in a few urban centers; rural areas and villages
did not have electricity. After 1947, all new power generation, transmission and distribution
in the rural sector and the urban centers (which was not served by private utilities) came

under the purview of State and Central government agencies. State Electricity Boards (SEBs)
were formed in all the states.
Legal provisions to support and regulate the sector were put in place through the Indian
Electricity Act, 1910. Shortly after independence, a second Act - The Electricity (Supply)
Act, 1948 was formulated, paving the way for establishing Electricity Boards in the states of
the Union.
In 1960s and 70s, enormous impetus was given for the expansion of distribution of electricity
in rural areas. It was thought by policy makers that as the private players were small and did
not have required resources for the massive expansion drive, the production of power was
reserved for the public sector in the Industrial Policy Resolution of 1956. Since then, almost
all new investment in power generation, transmission and distribution has been made in the
public sector. Most of the private players were bought out by state electricity boards.
From the installed capacity of only 1,362mw in 1947, has increased to 97000 MW as on
March 2000 which has since crossed 100,000 MW mark India has become sixth largest
producer and consumer of electricity in the world equaling the capacities of UK and France
combined. The number of consumers connected to the Indian power grid exceeds is 75
million.
India's power system today with its extensive regional grids maturing in to an integrated
national grid, has millions of kilometers of T & D lines criss-crossing diverse topography of
the country.
However, the achievements of India's power sector growth looks phony on the face of huge
gaps in supply and demand on one side and antediluvian generation and distribution system
on the verge of collapse having plagued by inefficiencies, mismanagement, political
interference and corruption for decades, on the other. Indian power sector is at the cross road
today. A paradigm shift is in escapable- for better or may be for worse.
3.1.1. EMERGENCE OF REGIONAL POWER SYSTEMS

In order to optimally utilise the dispersed sources for power generation it was decided right at
the beginning of the 1960’s that the country would be divided into 5 regions and the planning
process would aim at achieving regional self sufficiency. The planning was so far based on a
region as a unit for planning and accordingly the power systems have been developed and
operated on regional basis. Today, strong integrated grids exist in all the five regions of the
country and the energy resources developed are widely utilised within the regional grids.
Presently, the Eastern & North-Eastern Regions are operating in parallel. With the proposed
inter-regional links being developed it is envisaged that it would be possible for power to
flow any where in the country with the concept of National Grid becoming a reality during
12th Plan Period.
3.1.2. GENERATION
India has installed power generation capacity of 1,41,079.84 MW as on January 31, 2008,
which is about 100 times the installed capacity of 1362 MW in the year 1947. Power
generation has showcased a robust growth rate which is steadily improving year after year.
There has been significant improvement in the growth in actual generation over the last few
years. As compared to annual growth rate of about 3.1% at the end of 9th Plan and initial
years of 10th Plan, the growth in generation during 2006-07 and 2007-08 was of the order of
7.3% and 6.33% respectively.
The electricity generation target for the year 2008-09 has been fixed at 744.344 BU
comprising of 631.270 BU thermal; 118.450 BU hydro; 19.000 BU nuclear; and 5.624 BU
import from Bhutan.
Abbreviation:
 SHP = Small Hydro Project
 BG = Biomas Gasfier
 BP = Biomass Power

 U&I = Urban & Industrial Water Power
 RES = Renewable Sources.
Table.2: Gap Between Demand And Supply Of Power
Source: http://www.indexmundi.com/India/electricity_production.html
The table shows the average shortage of electricity in India every year to be approximately
between 7-8%.
3.1.2.1. STRATEGIES
The various strategies followed to achieve the goal in power sector are,
Power Generation Strategy with focus on low cost generation, optimization of capacity
utilization, controlling the input cost, optimization of fuel mix, Technology up gradation and
utilization of Nonconventional energy sources

Transmission Strategy with focus on development of National Grid including Interstate

connections, Technology up gradation & optimization of transmission cost.
Distribution strategy to achieve Distribution Reforms with focus on System up gradation,

loss reduction, theft control, consumer service orientation, quality power supply
commercialization, Decentralized distributed generation and supply for rural areas.
Regulation Strategy aimed at protecting Consumer interests and making the sector
commercially viable.
Financing Strategy is to generate resources for required growth of the power sector.
Conservation Strategy to optimize the utilization of electricity with focus on Demand Side
management, Load management and Technology up gradation to provide energy efficient
equipment gadgets.
Communication Strategy for political consensus with media support to enhance the general
public awareness.
To achieve the above objectives National Electric Policy has been designed. To fulfill the
objectives of the NEP, a capacity addition of 78,577 MW has been proposed for the 11th plan.
This capacity addition is expected to provide a growth of 9.5 % to the power sector.
The Tenth Plan for fiscal years 2002 to 2007 targeted a capacity addition of 41,110 MW,
which was subsequently revised to 30,641 MW; however at the end of the Tenth Plan period,
only 21,180 MW of capacity was added. This shows that India is not upto the mark in
achieving the targets of generation. Our planning is perfect but our path to achieve the target
is not perfect.
3.1.2.2. INVESTMENTS IN GENERATION

The total fund requirement for generation projects, during the Eleventh Plan period is
estimated at Rs. 4,108,960 million, with Rs. 2,020,670 million being required for the central
sector, Rs. 1,237,920 million being required for the state sector and Rs. 850,370 million
being required for the private sector. The total fund requirement includes the fund
requirement estimated at Rs. 1,891,950 million for start-up generation projects benefiting in
the Twelfth Plan.
3.1.3. TRANSMISSION
Transmission of electricity is defined as bulk transfer of power over a long distance at high
voltage, generally of 132 kV. In India bulk transmission has increased from 3708 ckm in
1950 to more than 256,000 ckm today.
The Government of India has an ambitious mission of ‘POWER FOR ALL BY 2012’. This
mission would require that our installed generation capacity should be at least 2, 00,000 MW
by 2012 from the present level of 1, 14,000 MW. To be able to reach this power to the entire
country an expansion of the regional transmission network and inter regional capacity to
transmit power would be essential. The latter is required because resources are unevenly
distributed in the country and power needs to be carried great distances to areas where load
centres exist.
Ability of the power system to safely withstand a contingency without generation

rescheduling or load-shedding was the main criteria for planning the transmission system.
However, due to various reasons such as spatial development of load in the network, non-
commissioning of load centre generating units originally planned and deficit in reactive
compensation, certain pockets in the power system could not safely operate even under
normal conditions. This had necessitated backing down of generation and operating at a
lower load generation balance in the past. Transmission planning has therefore moved away
from the earlier generation evacuation system planning to integrated system planning.
While the predominant technology for electricity transmission and distribution has been
Alternating Current (AC) technology, High Voltage Direct Current (HVDC) technology has

also been used for interconnection of all regional grids across the country and for bulk
transmission of power over long distances.
Certain provisions in the Electricity Act 2003 such as open access to the transmission and
distribution network, recognition of power trading as a distinct activity, the liberal definition
of a captive generating plant and provision for supply in rural areas are expected to introduce
and encourage competition in the electricity sector. It is expected that all the above measures
on the generation, transmission and distribution front would result in formation of a robust
electricity grid in the country.
3.1.3.1. GROWTH OF TRANSMISSION
Table.3: CUMLATIVE GROWTH IN TRANSMISSION SECTOR &

PROGRAMME FOR 11th PLAN

At the end of At the end of At the end of At the end of
Unit VIII Plan ie IX Plan ie X Plan ie XI Plan ie
March 1997 March 2002 March 2007 March 2012
TRANSMISSION
LINES
VIII Plan IX Plan X Plan XI Plan
765 kV ckm 409 971 1704 7132
HVDC +/- 500kV ckm 3138 3138 58728 11078
HVDC 200kV
ckm 0 162 162 162
Monopole
400kV ckm 36142 49378 75772 125000
230kV/220Kv ckm 79601 96993 114629 150000
Total
Transmission ckm 119290 150642 198089 293372
Line
SUBSTATIONS
VIII Plan IX Plan X Plan XI Plan
HVDC BTB MW 1500 2000 3000 3000
HVDC
MW 1500 3200 5200 11200
Bipole+Monopole
Total-HVDC
Terminal MW 3000 5200 8200 14200
Capacity
765kV MVA 0 0 2000 53000
400Kv MVA 40865 60380 92942 145000
230/220Kv MVA 84177 116363 156497 230000
Total-AC
Subtation MVA 125042 176743 251439 428000
Capacity
Source: National Electricity Plan (vol-II) Transmission
3.1.3.2. TRANSMISSION NETWORK
Table.4: Details of Existing Lines and Sub-Stations Region
Details of Existing Lines and Sub-Stations Region

HVDC 400KV 220KV 132KV (MVA)
1 Northern Region

J&K - 300 687 - 1260
HP - 572 192 - -
Delhi - 397 - - 1575
Haryana - 1789 66 - 2025
Punjab - 1170 401 - 1130
Rajasthan - 791 1032 - -
UP 817 2933 870 - 630
Total NR 817 7952 3248 0 6620
2 Western Region
MP - 5791 - - 945
Maharashtra - 1127 - - NIL
Gujarat - 1195 852 - 630
Total WR - 8113 852 0 1575
3 Southern Region
AP - 2762 - - 3150
Karnataka - 965 - - NIL
Kerala - 260 156 - 630
Tamil Nadu - 1647 64 - 1575
Total SR - 5634 220 0 5355
4 Eastern Region
Bihar - 1057 82 - 1860
Orissa - 1034 - - 2520
West Bengal - 1287 872 333 2025

DVC - 344 - - 630
Total ER - 3722 952 333 7035
5 N.E.Region
Assam - 1978 171 79 1015
Maghalaya - - - 67 -
Nagaland - - 320 189 100
Manipur - - - 443 6.3
Mizoram - - - 178 -
Tripura - - - 147 5
Arunachal Pradesh - 333 - 42 -
Total NER - 2311 491 1145 1126
Total All India 817 27732 5763 1478 21711
Source: http://cercind.gov.in/powergrid.htm
According to this table about 2.5% of Indian villages still remain unelectrified. In addition to
state boards Power Grid Corporation of India Limited has a major role in transmission
Power Grid Corporation of India limited (POWERGRID) was incorporated on October 23,
1989 with an authorized share capital of Rs. 5,000 Crore as a public limited company, wholly
owned by the Government of India. POWERGRID started functioning on management basis
with effect from August, 1991 and it took over transmission assets from NTPC, NHPC,
NEEPCO and other Central/Joint Sector Organizations during 1992-93 in a phased manner.
In addition to this, it also took over the operation of existing Regional Load Dispatch Centers
from CEA, in a phased manner, which has been upgraded with State of-the-art Unified Load
Dispatch and Communication (ULDC) schemes. According to its mandate, the Corporation,

apart from providing transmission system for evacuation of central sector power, is also
responsible for Establishment and Operation of Regional and National Power Grids to
facilitate transfer of power within and across the Regions with Reliability, Security and
Economy on sound commercial principles. Based on its performance POWERGRID was
recognized as a Mini-ratna company by the Government of India in October 1998.
POWERGRID, notified as the Central Transmission Utility of the country, is playing a major
role in Indian Power Sector and is also providing Open Access on its inter-State transmission
system.
3.1.4. FUTURE PLANS FOR POWER FOR ALL BY 2012
The country’s transmission perspective plan for eleventh plan focuses on the strengthening of
National Power Grid through addition of over 60,000 ckm of Transmission Network by
2012. Such an integrated grid shall carry 60% of the power generated in the country. The
existing inter-regional power transfer capacity is 17,000 MW, which is to be further enhanced
to 37,000 MW by 2012 through creation of “Transmission Super Highways”. Based on the
expected generation capacity addition in XI plan, an investment of about 75,000 Crore is
envisaged in Central Sector and Rs. 65,000 Crore is envisaged in the State Sector.
POWERGRID is working towards achieving its mission of “Establishment and Operation of

Regional and National Power Grids to facilitate transfer of power within and across the
regions with reliability, security and economy, on sound commercial principles".
The exploitable energy resources in our country are unevenly distributed, like Coal resources
are abundant in Bihar/Jharkhand, Orissa, West Bengal and Hydro Resources are mainly
concentrated in Northern and North-Eastern Regions. As a result, some regions do not have
adequate natural resources for setting power plants to meet their future requirements whereas
others have abundant natural resources. Demand for power continues to grow unabated. This
calls for optimal utilization of generating resources for sustainable development. Thus,
formation of National Power Grid is an effective tool to achieve this as various countries

have adopted the model of interconnecting power grid not only at national level but also at
international level.
Further, acquiring Right of Way (ROW) for constructing transmission lines is getting
increasingly difficult, especially in eco-sensitive areas like North-Eastern Region, Chicken
neck area, hilly areas in Jammu & Kashmir and Himachal Pradesh. At the same time, these
areas are also endowed with major hydro potential of the country. This necessitates creation
of “Transmission Super Highways”, so that in future, constraints in ROW do not cause
bottleneck in harnessing generating resources. Inter-connection of these highways from
different part of the country would ultimately lead to formation of a high capacity “National
Power Grid”.
Thus, developments in power sector emphasize the need for accelerated implementation of
National Power Grid on priority to enable scheduled/unscheduled exchange of power as well
as for providing open access to encourage competition in power market. Formation of such a
National Power Grid has been envisaged in a phased manner.
Initially, considering wide variations in electrical parameters in the regional grids, primarily
HVDC interconnections were established between the regions. This was completed in the
year 2002, thereby achieving inter-regional power transfer capacity of 5000 MW.
In the next phase, inter-regional connectivity is planned to be strengthened with hybrid

system consisting of high capacity EHV/UHV AC and HVDC links. Such a National Power
Grid is envisaged to disperse power not only from Mega sized generation projects but also to
enable transfer of bulk power from one part of the country to another in different operational
scenarios say, in varying climatic conditions across the country: Summer, Winter, Monsoon
etc. Commissioning of links under this phase has already begun with the commissioning of
2000 MW Talcher-II HVDC Bipole, Raipur – Rourkela 400kV D/C AC transmission line
having Series Compensation, augmentation of Gazuwaka HVDC (500MW) back to back link
and Tala transmission system. The inter-regional transfer capacity of 16,200 MW is available
as on date. Further strengthening of National Power Grid is envisaged through high capacity
AC EHV lines, 765 kV UHV AC lines/ HVDC lines. This phase is planned to be
implemented by 2012 when inter-regional power transfer capacity will be enhanced to about
37,700 MW by the end of XI Plan, depending upon planned growth of generation capacity.

3.1.5. DISTRIBUTION
The total installed generating capacity in the country is over 1, 35,000 MW and the total
number of consumers is over 144 million. A vast network of sub transmission in distribution
system has also come up for the utilization of power by the ultimate consumer.
However, due to lack of adequate investment on T&D works, the T&D losses have been
consistently on higher side, and reached to the level of 32.86% in the year 2000-01.The
reduction of these losses was essential to bring economic viability to the State Utilities.
As the T&D loss was not able to capture all the losses in the net work, concept of Aggregate
Technical and Commercial (AT&C) loss was introduced. AT&C loss captures technical as
well as commercial losses in the network and is a true indicator of total losses in the system.
High technical losses in the system are primarily due to inadequate investments over the
years for system improvement works, which has resulted in unplanned extensions of the
distribution lines, overloading of the system elements like transformers and conductors, and
lack of adequate reactive power support.
The commercial losses are mainly due to low metering efficiency, theft & pilferages. This
may be eliminated by improving metering efficiency, proper energy accounting & auditing
and improved billing & collection efficiency. Fixing of accountability of the personnel /
feeder managers may help considerably in reduction of AT&C loss.
With the initiative of the Government of India and of the States, the Accelerated Power
Development & Reform Programme (APDRP) was launched in 2001, for the strengthening
of Sub – Transmission and Distribution network and reduction in AT&C losses.
The main objective of the programme was to bring Aggregate Technical & Commercial
(AT&C) losses below 15% in five years in urban and in high-density areas. The programme,
along with other initiatives of the Government of India and of the States, has led to reduction
in the overall AT&C loss from 38.86% in 2001-02 to 34.54% in 2005-06. The commercial
loss of the State Power Utilities reduced significantly during this period from Rs. 29331
Crore to Rs. 19546 Crore. The loss as %age of turnover was reduced from 33% in 2000-01 to
16.60% in 2005-06.

The APDRP programme is being restructured by the Government of India, so that the desired
level of 15% AT&C loss could be achieved by the end of 11th plan.
Since incentive financing is proposed to be integrated with the existing investment program
to achieve commercial viability of SEBs / Utilities and link it to the reform process, the
original APDP was rechristened to Accelerated Power Development & Reforms Programme
(APDRP) during 2002-03 for 10th five year plan.
The objectives of APDRP are:
 Improving financial viability of State Power Utilities

 Reduction of AT & C losses
 Improving customer satisfaction
 Increasing reliability &quality of power supply
The scheme has two components as below:
a. Investment component – Government of India provides Additional Central

Assistance for strengthening and up gradation of sub-transmission and distribution
network. 25% of the project cost is provided as Additional central plan assistance in
form of Grant to the state utilities. To begin with the Govt. also provided loan to the
tune of 25% of the project cost. However in accordance with the recommendation of
12th finance commission, the loan component has been discontinued from FY 2005-
06. Now utilities have to arrange remaining 75% of the project cost from FIs like
PFC/REC or their resources. Special category state (like NE states, J&K, H.P,
Uttaranchal and Sikkim) are entitled for 90% assistance in form of grant and balance
10% fund.
b. Incentive component - An incentive equivalent to 50% of the actual cash loss

reduction by SEBs/ Utilities, is provided as grant. The year 2000-01 is the base year
for the calculation of loss reduction, in subsequent years. The cash losses are
calculated net of subsidy and receivables.

Funds Released:
Table.5: The details of the cash loss reduction and incentives released to various states
under APDRP (As on 31 March 2008)
Incentive Amount
Sl. Amount Released by
State Claim Year Recommended for
No. MoF
released to MoF
1 Andhra Pradesh 2002-03 265.11 265.11
2001-02 236.38 236.38
2002-03 148.08 148.08
2 Gujarat
2003-04 366.82 366.82
2004-05 288.03 288.03
3 Haryana 2001-02 105.49 105.49
2002-03 64.94 64.94
4 Kerala
2004-05 82.99 82.99
5 Madhya Pradesh 2002-03 297.61 297.61
6 Maharashtra 2001-02 137.89 137.89
7 Rajasthan 2001-02 137.71 137.71
2002-03 73 73
2003-04 302.76 302.76
8 West Bengal
2004-05 5.88 5.88
2005-06 115.1 115.1
9 Punjab 2003-04 251.94 251.94
Total 2879.63 2879.63
Source: http://www.powermin.nic.in/distribution/apdrp/projects/about_apdrp.htm
Schemes undertaken under APDRP are for renovation and modernization of sub-stations,
transmission lines & distribution transformers, augmentation of feeders & transformers,
feeder and consumer meters, high voltage distribution system (HVDS), consumer indexing,
SCADA, computerized billing etc.
1. Project Formulation
The State utilities to prepare for each of the high-density areas in order of priority, Detail
Project Reports (DPRs), based on the Technical Manual prepared by the Expert Committee
on Distribution, constituted by the Ministry of Power. These DPRs are to be vetted by NTPC
or PGCIL and put up to MOP for sanction. The different project components shall include:

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

Though the Chief Minister’s conference held in March 2001 decided to complete the
implementation of the feeder meters by December 2002, due to various reasons their
procurement and installation is yet to be completed. Since these feeders provide the metering
at the points of bulk deliveries in the distribution system, these are of paramount importance
for carrying out energy audits. Actions for procurement & installation of these are being
pursued vigorously. It is also necessary that the meters be provided with on-line
communication facility so that reliable, continuous data from all the substations are made
available without manual intervention.
3. Energy meters on DTs & Consumers and energy accounting
In many areas it has been planned to install suitable energy meters at distribution
transformers to facilitate detailed accounting of energy flows and these have to be planned
with suitable data transmission / collection facilities convenient to the utilities. Such meters
can also help in keeping track of the distribution transformer loading and thereby reduce their
outages apart from providing useful information on consumption patterns for demand side
management.
4. 11 kV Feeder as Profit Centre
Administrative measures are considered a powerful tool in our overall reform strategy
because of the tremendous benefits it can provide in a short time span and with least burden
to the SEB's. Recently, Andhra Pradesh has planned to entrust the distribution in selected 11
kV feeders and below levels to selected agencies with the requisite capabilities and have
invited tenders for such tasks. Karnataka has come out with the program of Grama Vidyut
Pradhinidhis for distribution in selected 11kv feeder areas. Success of such endeavors would
go a long way in finding a solution to the issues of the Indian power sector.
5. Technical Loss reduction measures
Measures for technical loss reduction include Installation of capacitors at all levels;
 Re-conductoring of over loaded sections
 Re-configuration of feeder lines & distribution transformers so as to reduce the length

of LT lines
 Make the system less LT oriented by installation of smaller size energy efficient
distribution transformers so that each transformer supplies power to 10 to 15 households
only
 Development of digital mapping of the entire assets of distribution system
 Computerized load flow studies so that investments could be undertaken for long-term
strengthening of the distribution system.
6. Improving customer satisfaction
Customer satisfaction can be improved through providing better quality power in terms of
voltage fluctuations and reliability by reducing outages. These necessarily call for technical
intervention in firstly ensuring that the assets already created are maintained in proper
working condition and secondly through augmenting the system. Further, customer complaint
redressal mechanisms are to be made more responsive and proactive through building
transparent and reliable system with the help of computerization. The system should be
capable enough to meet the growing demand of information conscious customers.
7. Computerization
Creation of comprehensive, up to date consumer index and system databases on

computerized platforms are essential for creation of platforms for efficient commercial and
technical operation and management of any distribution system. The APDRP program has
laid emphasis on this basic need and actions are on in many areas for creation of such
databases. The energy accounting, billing and revenue management platforms are also
planned under the APDRP program for realizing the objectives outlined above and provide
better services to the customers. Implementations for these are under various stages in
different areas. In addition provisions of computerized automatic data acquisition at the
substations are planned. Based on the needs these would be hooked up to suitable
Supervisory Control and Data Acquisition systems.
8. Turnkey Implementation
The schemes proposed under APDRP have to be implemented in a very short time frame so
that benefits of the investments are perceived and confidence is generated in the FIs that
investments in the distribution sector can be bankable. Execution of the scheme adopting

conventional arrangement of ordering each of the components separately would be time
consuming and delay in arranging any one component could lead to overall time delays.
With the present day manpower position in most of the SEBs it would also not be practical to
coordinate the efforts of multiple agencies. By awarding the works under a turnkey contract
the scheduling of equipment would be the responsibility of the contractor and shall keep in
adhering to the time schedules. Hence turnkey packaging concept would be adopted for
execution of works preferably through empanelled turnkey contractors to expedite project
implementation schedule. Performance Guarantee Mechanism having adopted a turnkey
concept for execution it would be possible to bind the contractor in terms of
- Work completion schedule

- Overall costs
- Equipment performance.
A scheme of incentives for early completion and penalties for delays or failure to meet
performance guarantees can also be worked out in the turnkey contracts. If required
performance guarantee contract mechanisms will be introduced whereby the turnkey
companies would implement projects with guaranteed AT&C loss reduction with their own
investments. The returns are expected from the guaranteed incremental loss reduction.
Implementation of various activities / interventions will be prioritized to ensure quick
improvements in reliability and quality of power supply, reduction in AT&C losses, increase
in revenues and reduction in outages. The focus will be on 11 KV feeders, Distribution
transformers and the Consumers.
Therefore, the SEBs/State Utilities shall be urged to implement projects sanctioned under this
programme on turnkey basis through pre-qualified turnkey contractors selected on a
competitive basis to ensure quality and expeditious implementation.
9. Technical Specification & Standardization
The Expert Committee has also recommended standardization of technical specifications of

equipment used in the distribution sector. Specifications are being drawn up for energy
efficient and standardized equipments like electronic and static meters, transformers,

capacitors, conductors, insulators etc., with the assistance of the Indian Electrical and
Equipment Manufacturing Association, the Confederation of Indian Industry and the Bureau
of Indian Standards etc. Appropriate Expert Committees have been set up for this purpose.
NTPC and PGCIL have also prepared model bidding documents which are available for use
by the utilities.
10. Accreditation
Project formulation for up gradation of distribution network is a highly specialized job that
involves detailed energy balancing and network reconfiguration necessary for a high voltage
or low voltage distribution system. The SEBs may or may not have adequate skills in the area
and, therefore, may like to acquire the expertise and skills on an outsourcing basis. In order
to cover a large number of urban & industrial areas in the country, within the next 4 to 5
years, it is essential to make available a number of accredited specialized agencies for the
purposes of energy audit & accounting, project formulation, turnkey implementation, project
monitoring and project evaluation. SEBs / Utilities, if they so desire, would be able to out-
source the implementation to accredited agencies for quick formulation of quality projects
and their implementation. A Committee with members from NTPC, PGCIL, PFC, CEA,
SEBs /Utilities, credit rating agencies, FIs etc. will be constituted to accredit reputed agencies
for the above purpose. This would require engagement of agencies that are specialists in the
fields of work given below in assisting the states which lack internal capabilities or
manpower, and oversee the proposals & implementation by the states who are well equipped:
 Engineering Agencies: To formulate and appraise the DPRs for augmentation of sub-
transmission and distribution system and oversee implementation including quality
checks.
 Project Monitoring Agencies: To review the physical and financial progress of the
project and bring out concern areas to the notice of the MOP for immediate resolution
to avoid time and cost over - runs.
 Turnkey Contractors: To undertake design, manufacture, supply, erection, testing &

commissioning and provide maintenance facilities and performance warranty for the
various components involved in the sub-transmission and distribution system.
Project Evaluators: To conduct concurrent and post execution evaluation of the
anticipated and actual benefits accrued consequent upon execution of the project.

 Energy Accounting & Audit Agencies: The key success of distribution sector lies in
bridging the gap between the energy drawn from the system and the metered energy
supplied to the customers. The MOU with the States has a provision for conducting
energy audit on each feeder. But the results of the audit have shown that a fair amount
of energy accounted for as supplied is based on assessment. For success of the
program and improving revenue realization it is essential that all energy transactions
are adequately metered and properly accounted. Just as any business would have to
get its accounts audited it is necessary that this energy accounting is audited by
eminent third parties so that the programme can sustain on its own strength in the
coming years. For carrying out the detailed activities at field level agencies with
sufficient experience in the respective areas of work are proposed to be identified and
accredited. Any SEB can invite quotations from the accredited parties for the specific
work and immediately place an award thereby saving considerable time and effort.
This would facilitate in reduction of bidding time, bring in uniformity of terms of
reference and work content. For the other activities especially those involving HR
initiatives at SEB level and DSM and distributed generation concepts, discussions are
being held with international financing agencies to support the programme.
11. Application of Information Technology
Information technology and computer aided tools for revenue increase, outage reduction,
monitoring and control, play a vital role in distribution management. It is, therefore,
proposed to have a technology mission for customizing / development of cost effective and
relevant solutions for consumer and control point data communications, remote monitoring,
operation and control, etc. for the distribution network. Involvement of IT industries in this
effort is envisaged. IT applications will be used in such processes in the distribution sector to
ensure higher revenues as a result of segregation of T&D losses, and controlling commercial
losses, especially for metering, meter reading, billing, collection and outage reduction.
12. Management Information System (MIS)
Operational efficiency improvement and customer servicing also need to be addressed at

various levels in the organization. In this regard, an effective Management Information
System (MIS) is required to ensure effective flow of information to facilitate quick decision-

making at various levels of organization and to improve the operation and management of the
distribution system.
This is proposed to be achieved through computerization and networking. Management

Information System for the SEBs/ Utilities should provide relevant information at each level
of the organization in timely and accurate manner. The timeliness and accuracy of
information improves decision-making. For MIS, information flow is required from lower
level to higher levels with some information in real time and some in batch mode. For real
time information flow, networking within the organization is needed. In addition to this,
information management required for monitoring and decision-making will be different at
various levels in hierarchy. MIS should be able to take care of different needs at various
levels. Otherwise huge data generated from MIS will not be of any significant use. The
structure of MIS should be SEB specific because of difference in their organizational
structures and responsibilities at various levels across the organization.
A generalized framework of MIS is presented which may be tailored to suit the needs of a
specific SEB/utilities.
13. Capacity Building within SEBs/Utilities
Even though SEBs have expertise in different fields, strengthening of sub-transmission &
distribution network on a scientific basis using computer aided tools requires an integrated
knowledge. Most SEBs, during the regional meetings held in April and then later in June,
2001 expressed their inability to take up such work with their own manpower. It was
considered necessary to promote capacity building exercise in the SEBs/State Power Utilities
to enable SEB personnel to prepare detailed project reports for each of the districts/ circles
and implement the project using APDRP funds at a later stage. Capacity building exercise is
to cover:
 Training the manpower
 Energy audit & accounting studies
 Making the SEB officials collect relevant data from each 11 KV feeder in the identified
circle.
 Analysis of the data using computer tools to prepare feeder wise computer aided least
cost project report.

 Supervision of implementation
Several training programmes were organized by the training institutions such as Power
Management Institute (NTPC), National Power Training Institute, PGCIL etc., and several
working level officers from the various SEBs benefited from such programmes. It is planned
to further strengthen our efforts in imparting quality training to bring about changes in
business perspective crucial to the success of our power reform programme.
It is proposed to provide extensive training to the staff of SEBs / Utilities at all levels to so as
enable them to develop bankable project reports covering techno-commercial activities for
each circle and manage electricity distribution with a commercial orientation. Capacity
building is envisaged as a continuous exercise to ensure that the latest developments are
internalized. Distribution reforms require a structural change in the existing set up of the
SEBs. In order to enable them to manage distribution on a profit centre approach and to
improve their performance on the basis of certain benchmarks, funds under APDRP will be
provided only to those State Govts. /SEBs which agree to certain precedent conditions
through an Agreement The SEBs / State Distribution Utilities will execute a SEB/Utility-
specific Memorandum of Agreement [MOA] with the Ministry of Power. The Ministry of
Power will also monitor implementation of the precedent conditions before releasing funds.
The efficiency gains on account of APDRP investments shall be intimated to the regulatory
commission to ensure that the benefits and reliefs are passed on to the customer by the
private utilities.

CHAPTER 4
SEGMENTS IN POWER GENERATION

SEGMENTS IN POWER GENERATION
4.1. THERMAL
Current installed capacity of Thermal Power (as of 12/2008) is 93392.64 MW which is

63.3% of total installed capacity.
 Current installed base of coal based thermal power is 77458.88MW which comes to
53.3% of total installed base.
 Current installed base of gas based thermal power is 14734.01MW which is 10.5% of
total installed base.
 Current installed base of oil based thermal power is 1199.75 which is .09% of total
installed base.
Maharashtra is the largest producer of thermal power in the country.
Fig. 3: Comparison of Energy Intensity

Source: chmn@dae.gov.in
4.2. HYDRO POWER
India is blessed with a rich hydro power potential. In the exploitable potential terms, India
ranks fifth in the world. Less than 25% of the potential has been developed as of now. A large
hydro has four main advantages.
 It is a source of green energy.

 It has low variable cost.
 It is grid friendly.
 It can also can sub serve other purposes by irrigation, flood control, etc.
India has 3 major rivers: the Indus, the Brahmaputra, and the Ganga. It also has three major
river systems? Central Indian, west flowing rivers of south India, and east flowing rivers of
south India with a total of 48 river basins. The total potential from these river basins is
600TWh (Terawatt Hours) of electricity.

Hydroelectric projects can be classified on the basis of purpose, hydraulic features, capacity,
head, constructional features, mode of operation, etc. The main types are
 ROR (Run of River) There are not large reservoirs; a part of water flow is diverted to
the plant which is adjacent to the river. After generation the flow is diverted back to the
main flow through the tail race. This type of hydro plants requires a diversion dam and
has unregulated water flow.
 Dam Storage In these types of hydro plants, large reservoirs are created by the
construction a sizeable dam across the river and the plants is situated at the toe of the
dam. Here, water could be regulated to generate electricity depending upon the demand
 Pumped Storage These types of plants have two reservoirs, one at the upstream of the
power plant and one at the downstream. When there is low peak demand, the water from
the reservoir situated downstream is pumped0020back to the upstream reservoir.
As of today, the total identified hydro potential is 1 48 701 MW (mega watt). According to
the list of hydro electric projects in the country, a total of 29 572 MW,19.9% of the total? Has
been harnessed and 13 286 MW is under construction. A total of 3 660 MW of pumped
storage schemes have also been developed.
Various initiatives for accelerated development have been taken up by the central government
to harness the hydro potential in India. Some of these are
 Hydro Power Policy (1998)

 50 000 MW initiative
 Preparation of viable models for private sector participation
 Ranking of projects
 R&M up gradation and life extension programmes
 Facilitation for trading and co-operation with other countries
 Execution of projects with interstate aspects by Central Public Sector Units
Fig.4: State wise Hydro-power generation

Source: http://www.marketresearch.com/product/display.asp?productid=1695991
4.3. NUCLEAR POWER GENERATION
In India, out of total installed capacity of 126993.97 MW (as on 31 August 2006); the share
of nuclear power is 3% at 3900 MW. From the electricity generation point of view, nuclear
power plants contributed 17 238.89 GWh out of total electricity generation of 6 17 510.44
GWh during April 2005 - March 2006, amounting to 2.79% of total generation. However,
with exponential growth in energy demand coupled with a finite availability of coal, oil, and
gas; there is a renewed emphasis on nuclear energy. Moreover, nuclear energy is considered
to be an environmentally benign source of energy.
Department of Atomic Energy is carrying out nuclear energy programme in India. The Indian
Nuclear Power Programme has the following three stages.

 The first stage, already commercial now, comprised setting up of PHWRs (pressurised
heavy water reactors) and associated fuel cycle facilities. PHWRs use natural uranium as
fuel and heavy water as moderator and coolant. The design, construction, and operation
of these reactors is undertaken by public sector undertaking the NPCIL (Nuclear Power
Corporation of India Ltd). The company operates 16 reactors (2 Boiling Water Reactors
and 14 PHWRs) with a total capacity of 3900 MWe.
 In the second stage, it was envisaged to set up FBRs (fast breeder reactors) along with
reprocessing plants and plutonium-based fuel fabrication plants. Plutonium is produced
by irradiation of Uranium-238. The Fast Breeder Programme is in the technology
demonstration stage. Under this stage, the IGCAR (Indira Gandhi Centre for Atomic
Research) has completed design of a 500 MWe PFBR (prototype fast breeder reactor)
being implemented by BHAVINI (Bharatiya Nabhikiya Vidyut Nigam).
 The third stage of the Indian Nuclear Power Programme is based on the thorium-
uranium-233 cycle. Uranium-233 is obtained by irradiation of thorium. Presently this
stage is in technology development phase. The ongoing development of 300 MWe
AHWR (advanced heavy water reactor) at BARC (Bhabha Atomic Research Centre)
concerns thorium utilization and its demonstration.
4.4. SOLAR
India is endowed with rich solar energy resource. The average intensity of solar radiation
received on India is 200 MW/km square (megawatt per kilometer square). With a
geographical area of 3.287 million km square, this amounts to 657.4 million MW. However,
87.5% of the land is used for agriculture, forests, fallow lands, etc., 6.7% for housing,
industry, etc., and 5.8% is either barren, snow bound, or generally inhabitable. Thus, only
12.5% of the land area amounting to 0.413 million km square can, in theory, be used for solar
energy installations. Even if 10% of this area can be used, the available solar energy would
be 8 million MW, which is equivalent to 5 909 mtoe (million tons of oil equivalent) per year.

However, solar energy is a dilute source. The energy collected by 1 m square of a solar
collector in a day is approximately equal to that released by burning 1 kg of coal or 1/2 litre
of kerosene. Thus, large areas are needed for collection. Besides, the efficiency of conversion
of solar energy to useful energy is low. Therefore, the energy actually available would be
order of magnitude lower than the aforementioned estimates. Nonetheless, it is obvious that
solar energy can be a good source of meeting energy demands.
On the applications side, the range of solar energy is very large. While at the high end there
are megawatt level solar thermal power plants, at the lower end there are domestic appliances
such as solar cooker, solar water heater, and PV lanterns. Then, in between, there are
applications such as industrial process heat, desalination, refrigeration and air-conditioning,
drying, large scale cooking, water pumping, domestic power systems, and passive solar
architecture. Solar energy can be harnessed to supply thermal as well as electrical energy.
Those technologies that use solar energy resource to generate energy are known as solar
energy technologies.
Solar energy technologies consists of
 Solar thermal technologies, which utilize sun's thermal energy and
 Solar photovoltaic technology, which convert solar energy directly in to electricity.
Solar energy resource: Since the accurate information about solar energy resource at a
specific location is crucial for designing appropriate solar system. Solar energy resource
assessment becomes an essential activity of any solar energy programme.
4.5. WIND
The sun’s energy falling on the earth produces large-scale motions of the atmosphere causing
winds, which are also influenced by small scale flows caused by local conditions such as
nature of terrain, buildings, water bodies, etc. Wind energy is extracted by turbines to convert
the energy into electricity.
A small-scale and large-scale wind industry exists globally. The small-scale wind industry
caters for urban settings where a wind farm is not feasible and also where there is a need for

household electricity generation. The large-scale industry is directed towards contributing to
countrywide energy supply.
4.5.1. WIND RESOURCE IN INDIA
The wind resource assessment in India estimates the total wind potential to be around 45 000
MW (mega watt). This potential is distributed mainly in the states of Tamil Nadu, Andhra
Pradesh, Karnataka, Gujarat, Maharashtra, and Rajasthan. The technical potential that is
based on the availability of infrastructure, for example the availability of grid, is estimated to
be around 13 000 MW. In India, the wind resources fall in the low wind regime, the wind
power density being in the range of 250 -450 W/m2. It may be noted that this potential
estimation is based on certain assumptions. With ongoing resource assessment efforts,
extension of grid, improvement in the wind turbine technology, and sophisticated techniques
for the wind farm designing, the gross as well as the technical potential would increase in the
future.
4.5.2. STATUS
Wind power has become one of the prominent power generation technologies amongst the
renewable energy technologies.
4.5.3. TECHNOLOGY TRENDS
Use of wind energy started long ago when it was used for grinding. The commercial use of
wind energy for electrical power generation started in 1970s. Horizontal axis wind turbines
are most commonly used for power generation, although some vertical axis wind turbine
designs has been developed and tested. The vertical axis turbines have structural as well as
aerodynamic limitations and, hence, are not commercially used.
4.5.4. WIND POWER IN INDIA
Wind turbines offered in India range from 250 kW to 2 MW capacities. As of 31 March 2006,
the total installed capacity in the country was 5340 MW, which is 46% of the total capacity
of renewable resources based power generation. There are 7 manufacturers of wind turbine
generators in India.

4.6. SMALL HYDRO
The word hydro comes from a Greek word meaning water. The energy from water has been
harnessed to produce electricity since long. It is the first renewable energy source to be
tapped essentially to produce electricity
Hydro power currently suffices one fifth of the global electricity supply, also improving the
electrical system reliability and stability throughout the world. It also substantially avoids the
green house gas emissions, thus complimenting the measures taken towards the climate
change issues.
Hydro projects below a specified capacity are known as small hydro. The definition of small
hydro differs from country to country, depending on the resources available and the prevalent
national perspective. The small hydro atlas shows that the largest of the projects (30 MW) is
in US and Canada. Small hydro power has emerged as one of the least cost options of
harnessing green energy amongst all the renewable energy technologies.
 According to the power generated, small hydro power is classified into small, mini/micro
and Mico hydro.
In India, it is being classified as follows.

Small hydro - 2 MW - 30 MW
Mini - 100 kW - 2 MW
Micro - 10 kW - 100 kW
Mico hydro - 1 kW - 10 kW

CHAPTER 5
REFORMS IN POWER SECTOR
REFORMS IN THE POWER SECTOR
5.1.1. PRE REFORM STAGE
Confronted with unprecedented economic crisis in 1991, Government of India embarked

upon a massive cleanup exercise encompassing all policies having financial involvement of
Governments- both at the level of Union and States.

Since after Electricity (supply) Act 1948, the power sector was mainly under the government
control which owned 95 % of distribution and around 98% of generation through states' and
central government utilities, the power sector was chiefly funded by support from
government budgets in the form of long term, concessional interest loans. These utilities were
made to carry forward the political agenda of the ruling parties of the day and the cross-
subsidization i.e. charging industrial and commercial consumers above the cost of supply and
to charge agricultural and domestic consumers below cost of supply was an integral part of
the functioning of the utilities.
Table.6: POWER SECTOR REFORMS
YEAR MAJOR DEVELOPMENTS

1991 The Electricity Laws (Amendment) Act, 1991--Notification. Amends the
Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 by
Private Sector allowed to establish generation projects of all types
(except nuclear)
100% foreign investment & ownership allowed
New pricing structure for sales to SEBs.
5 Year Tax holiday; import duties slashed on power projects
1992 Intensive wooing of foreign investors in US, Europe & Japan
1992-97 8 projects given "fast-track" status.
Sovereign guarantees from Central Government.
Seven reached financial closure
Dabhol (Enron), Bhadravati (Ispat), Jegurupadu (GVK),
Vishakapatnam (Hinduja), Ib Valley (AES), Neyveli (CMS),Mangalore
(Cogentrix)
1995-96 World Bank Reform Model - First Test Case Orissa
Orissa Electricity Reform Act passed
Establishment of Orissa Electricity Regulatory Commission
SEB unbundled into Orissa Power Generating Company (OPGC),
Orissa Hydel Power Corporation (OHPC) and Grid Corporation of
Orissa (GRIDCO)
Distribution privatized
1996 Chief Ministers Conference: Common Minimum Action Plan for Power:
Recommend policy to create CERC and SERCs
Licensing, planning and other related functions to be delegated to
SERCs.
Appeals against orders of SERCs to be in respective High Courts
SERC to determine retail tariffs, including wheeling charges etc.,
which will ensure a minimum overall 3% rate of return.
Cross -subsidization between categories of consumers may be
allowed by SERCs, but no sector to pay less than 50% of the average
cost of supply ( cost of generation plus transmission and distribution).
Tariffs for agricultural sector not to be less than Rs.0.50 Kwh and to be

brought to 50% of the average costing not more than three years.
Recommendations of SERCs to be mandatory, but financial
implications any deviations made by State/UT Government, to be
provide for the explicitly in the State budget.
Fuel Adjustment Charges (FCA) to be automatically incorporated in
the tariff.
Package of incentives and disincentives to encourage and
facilitate the implementation of tariff rationalization by the States.
States to allow maximum possible autonomy to the SEBs, which are
to be restructured and corporatized and run on commercial basis. SEBs
to professionalize their technical inventory manpower and project
management practices.
1997 CEA Clearance exempted for projects under 1000MW but State
Government environment clearance required up to 250-500 MW
Liquid fuel policy -- naphtha allocations to IPPs
1998 Mega-Power Policy: special incentives for the construction and
operation of hydro-electric power plants of at least 500 MW and
thermal plants of at least 1,000 MW.
- The Electricity Laws (Amendment) Act, 1998 and Electricity
Regulatory Commissions Ordinance -- Notification.
Creation of Central Transmission Utility
STUs to be set up with government companies
Establishment of CERC and SERCs
Rationalization of electricity tariffs,
Policies regarding subsidies
Promotion of efficient and environmentally benign policies
- Power Grid notified as Central Transmission Utility
- Haryana Electricity Reforms Act:
HSEB unbundled into Haryana Vidyut Prasaran Nigam Ltd., a Trans
Co. (HVPNL) and Haryana Power Corporation Ltd.
Creation of HERC
Two Government owned distribution companies viz. Uttar Haryana
Bijli Vitaran Nigam Ltd. (UHBVNL) and Dakshin Haryana Bijli
Vitaran Nigam (DHBVNL) have been established.
DFID's technical co-operation grant of 15 million pounds available
for reforms.
1999 Andhra Pradesh Electricity Reforms Act
APSEB unbundled into Andhra Pradesh Generation Company Ltd.
(APGENCO) and Andhra Pradesh Transmission Company Ltd.
(APTRANSCO for transmission & distribution)
Creation of APERC
Other Developments:
World Bank loan of US $ 210 million under the APL
DFID's 28 million pounds as technical co-operation grant.
CIDA technical assistance of Canadian $ 4 million.
- Karnataka Electricity Reforms Act
KEB and KPCL transformed into new companies: Karnataka Power
Transmission Corporation Ltd. (KPTCL) and Visvesvaraya Vidyut
Nigama Ltd., a GENCO, (VVNL)

Creation of KERC
Other Developments:
KPTCL has carved out five Regional Business Centers (RBC) for five
identified zones.
2000 Power Ministers' Conference and Electricity Bill 2000 (draft):
Functional disaggregation of generation, transmission and distribution
with a view to creating independent profit centres and accountability;
Re organization and restructuring of the State Electricity Boards
in accordance with the model, phasing and sequencing to be
determined by the respective State Governments
States to determine the extent, nature and pace of privatization.
(public sector entities may continue if the States find them
sustainable);
Transmission to be separated as an independent function for creation
of transmission highways that would enable viable public and private
investments;
Amendments to the Indian Electricity Act, 1910 made in 1998 for
facilitating private investment in transmission have been broadly
retained except that the private transmission companies would
be regulated by the Regulatory Commissions and Transmission
Centers inst under the direction, supervision and control of the
Central/State Transmission Utilities;
Present entitlements of States to cheaper power from existing
generating stations to remain undisturbed;
Provision of compulsory metering for enhancing accountability and
viability;
Central and State Electricity Regulatory Commissions to continue
broadly on the lines of the Electricity Regulatory Commissions Act,
1998;
State Regulatory Commissions enjoined to recognize in their
functioning the need for equitable supply of electricity to rural areas
and to weaker sections;
Stringent provisions to minimize theft and misuse.
Source: www.cea.nic.in/power_sec_reports/general_review/0405/index.pdf
5.1.2. ELECTRICITY ACT 2003
An Act to consolidate the laws relating to generation, transmission, distribution, trading and
use of electricity and generally for taking measures conducive to development of electricity
industry, promoting competition therein, protecting interest of consumers and supply of
electricity to all areas, rationalisation of electricity tariff, ensuring transparent policies
regarding subsidies, promotion of efficient and environmentally benign policies constitution
of Central Electricity Authority, Regulatory Commissions and establishment of Appellate
Tribunal and for matters connected therewith or incidental thereto.
5.1.2.1. GENERATION:
 Any Company, association or body of individuals (even unincorporated) can generate

electricity without requirement of techno-economic clearance of CEA, or approval of
State Government or regulator, except in case of hydropower station for which written
consent of Central Electricity Authority is required.
 A Generating Company can supply electricity directly to more than one consumer and is
vested with the duty to establish, operate and maintain sub-stations, tie lines etc.
 Any entity, (company, co-operative society or association of persons) can establish a
Captive Generation Plant (CGP) primarily for its own use without any entry barriers.
Open access is to be provided to all CGPs. No cross-subsidy surcharge would be levied
on the persons who have established CGP for carrying electricity to destination of his
own use.
5.1.2.2. RURAL ELCTRIFICATION/GENERATION/DISTRIBUTION
 Government of India will have to formulate a National Policy after consulting State
Governments & CEA, to govern (i) rural electrification and local distribution through
local bodies5, and (ii) rural off-grid supply including those based on
renewable/nonconventional energy resources.
 No license is required for generating or distributing in rural areas notified by the State
Govt.
5.1.2.3. LICENSING
 Trading has been recognized as a separate licensed activity along with transmission and
distribution. However, a license is not required in respect of (i) trading by a distribution
licensee, (ii) transmission, distribution or trading by any Govt., as the Govt. would be
deemed a licensee.

 Electricity Regulatory Commission (ERC), on the recommendation of Government, in

accordance with the national electricity policy and public interest can exempt any of the
local bodies6 from requiring license.
5.1.2.4. TRADING AND CAPTIVE GENERATION
 Trading, i.e., purchase of electricity for resale, is a separate licensed activity, except for
distribution licensees who do not require a separate trading licence. Traders can enter into
direct contracts with the consumers and determine its terms and conditions (including
tariff).
 The Appropriate Commission may specify
 The entry barriers for traders – technical requirements, capital adequacy
requirement, and credit-worthiness;
 Duties re. supply and trading in electricity to be discharged by a trader; and

 Fix trading margin in intra-state trading if considered necessary.
 ERCs have to develop trading market and have to be guided by National Tariff Policy.
5.1.2.5. OPEN ACCESS
 Open access means non-discriminatory use of transmission lines, distribution system and
associated facilities by any licensee/consumer/Genco in accordance with ERC
regulations.
 The licensees, consumers and Gencos have to pay transmission/wheeling charges for
open access. Consumers has to also pay a surcharge (to be utilized to meet cross subsidy)
determined by ERC, for open access.
 ERC may order any licensee owning intervening transmission facilities to provide use of
facilities to any other licensee, to the extent of surplus capacity.
 A State Transmission Utility is obliged to provide non-discriminatory open access to its
transmission system for use by a licensee or Genco forthwith, or by any consumer once
distribution level open access has been provided.

 There is no statutory time limit for introduction of open access. ERC has to determine by
June 10, 2004 the phases and conditions, subject to which open access would be
introduced.
5.1.2.6. DISTRIBUTION
 The distribution licensee has a mandatory duty to supply on request of consumer in a

time bound manner if the consumer agrees to pay the applicable tariff. ERC is
empowered to suspend or revoke license of a Discom for failure to maintain
 Uninterrupted supply. Distribution licensee is empowered to recover
charges/expenses/security and disconnect supply for non-payment of dues.
 Discoms can enter into direct contracts with consumers.
 Discoms can engage in other businesses but have to share revenue to reduce wheeling
charges, and maintains separate accounts for the same.
 ERCs may grant more than one distribution licenses can be issued in a given area,
permitting them to supply electricity through their own distribution system. To get a
subsequent distribution license any person will have to comply with additional
requirements prescribed by GoI regarding capital adequacy, creditworthiness, or Code of
Conduct etc.. If an applicant meets such requirements, he shall not be denied grant of the
license.
 ERCs may permit by regulations a consumer/class to receive supply of electricity from
anyone other than the distribution licensee of the area of supply – against payment of
wheeling charge & surcharge in lieu of cross subsidy.
 Distribution licensee is free to undertake distribution for a specified area within his area
of supply without need for a separate license. Provided that the distribution licensee shall
remain liable for the supply.
5.1.2.7. TRANSMISSION
 To secure non-discriminatory open access, transmission has been segregated as a wires

function without any trading (buying and selling). Central transmission utility (CTU) and
all State transmission utilities (STUs) are deemed licensee.

 CTU and STUs functions are (i) Transmission; (ii) planning & co-ordination of
transmission system; (iii) development of efficient and economical transmission lines
from generating stations to load centers; (iv) providing non-discriminatory open access to
the system.
 RLDCs and SLDCs are empowered to issue directions, and exercise supervision &
control to ensure stability, efficiency & economy of grid operation in the region and the
State respectively. Licensees, generating companies and other persons connected with
operation of power system shall comply. SLDC shall ensure compliance with RLDC
directions.
 Pending creation of separate RLDCs & SLDCs, the CTU and the STU shall perform the
role.
5.1.2.8. TARIFF
 Government has been distanced from determination of tariff. This power has been vested
in the CERC/SERC. In determination of tariff CERC/SERC shall be guided by factors
including National Electricity Policy, tariff policy (formulated by Central Government),
CERC’s principles and methodologies for setting tariff and principles rewarding
efficiency and multiyear tariff.
 In case tariff is determined through transparent bidding as per Government of India
guidelines, the same shall be adopted by the ERCs.
 To promote competition among distribution licensees, where there are 2 or more
distribution licensees supplying in an area, the ERC may fix only maximum ceiling of
tariff for retail sale.
 The PPAs/BSAs entered into before 10th June, 2003 have not been explicitly saved or
granted a protection from regulatory intervention.
5.1.2.9. REGULATORY COMMISSIONS
 It is mandatory to establish SERCs within 6 months from 10th June, 2003. Joint
Commission can be constituted for two or more States or Union territories or both by
mutual agreement.
 The new functions to be performed by CERC/ SERC include specifying Grid Code,
Supply Code (only SERC), levy fees, fix trading margins in interstate trading.

 In exercise of their functions, ERCs shall be guided by – National Electricity Policy,

National Electricity Plan & Tariff Policy; directions of GoI/State Government
concerned, in matters of policy involving public interest – where such Government’s
decision shall be final as to whether the directions relates to a policy involving public
interest. There is no express provision enabling ERCs to depart from such directions.
 Provision for separate ERC funds (not consolidated funds) for finance of ERC
expenditures.
5.1.2.10. POLICY ISSUES
 Central Government shall prepare, publish and revise National Electricity Policy and
Tariff policy in consultation with State Governments and CEA9.
 The implementation of the Act is largely dependent on the nature and scope of the diverse
policy instruments to be issued by Government, and institutions like Special Courts,
Appellate Electricity Tribunal, NLDC, RLDC, SLDC, SERCs and SEB successors to be
constituted by Government’s. It is noteworthy that these instruments will have a bearing
are:-
 Role and functioning of ERCs,

 Role and functioning of CEA,
 Market development,
 Governance of the sector – regulation, grid operations, safety issues, and
 Enforcement.
5.1.2.11. CONSUMER INTERESTS
 Creation of a Consumer redressal forum (CRF) by Distribution licensee in a time bound

manner. The consumers aggrieved from CRF can approach to an ‘ombudsman’10.
 Distribution licensee has to supply electricity within 1 month from the date of request for
supply, except where capital works are required for connectivity. Failure of distribution
licensee to supply within said time period would attract penalty.
5.1.2.12. ENFORCEMENTS

 Suitable provisions for provisional assessments and recovery of compensatory fines may
be able to address a long-standing vacuum in law.
 Special Courts are to be established by Government’s for speedy disposal of cases
relating to theft of electricity.
 The scope of offences has been expanded and enhanced punishments have been
prescribed for subsequent or continuing offences.
 Stronger powers (accompanied with better safeguards) have been provided for
conducting inspections/search/seizure.
5.1.2.13. DISPUTE RESOLUTION
 The appeal against all orders of ERC/adjudication officer would lie to an expert Appellate
Tribunal (an expert body), which shall dispose appeals within prescribed time.
 Appeal from appellate tribunal lies to Supreme Court. The appeal to Supreme Court is
limited to substantial question of law.
5.1.3. ELECTRICITY (Amendment) ACT, 2007.
The Electricity (Amendment) Act, 2007, amending certain provisions of the Electricity Act,
2003, has been enacted on 29th May, 2007 and brought into force w.e.f. 15.06.2007. The
main features of the amendment Act are: -
 Central Government, jointly with State Governments, to endeavor to provide access to

electricity to all areas including villages and hamlets through rural electricity
infrastructure and electrification of households.
 No License required for sale from captive units.
 Deletions of the provisions for elimination of cross subsidies. The provisions for
reduction of cross subsidies would continue.
 Definition of theft expanded to cover use of tampered meters and use for unauthorized
purpose. Theft made explicitly cognizable and non-bail able.
5.1.3.1. DEMAND SIDE MANAGEMENT

Demand-side management is used to describe the actions of a utility, beyond the customer's
meter, with the objective of altering the end-use of electricity - whether it be to increase
demand, decrease it, shift it between high and low peak periods, or manage it when there are
intermittent load demands - in the overall interests of reducing utility costs. In other words
DSM is the implementation of those measures that help the customers to use electricity more
efficiency and it doing so reduce the customers to use the utility costs. DSM can be achieved
through.
 Improving the efficiency of various end-uses through better housekeeping correcting

energy leakages, system conversion losses, etc ;
 Developing and promoting energy efficient technologies, and
 Demand management through adopting soft options like higher prices during peak hours,
concessional rates during off-peak hours seasonal tariffs, interruptible tariffs, etc.
DSM, in a wider definition, also includes options such as renewable energy systems,
combined heat and power systems, independent power purchase, etc, that utility to meet the
customer's demand at the lowest possible cost. Often the terms energy efficiency and DSM
are used interchangeably. However, it is important to point out that DSM explicitly refers to
all those activities that involve deliberate intervention by the utility in the marketplace so as
to alter the consumer's load profile. Energy efficiency issued in an all encompassing sense
and includes any activity that would directly or indirectly lead to an increase in energy
efficiency. To make this distinction precise, a program that encourages customers to install
energy efficient lighting systems through a rebate program would fall under DSM. On the
other hand, customer purchases of energy efficient lighting as a reaction to the perceived
need for conservation is not DSM but energy efficiency gains.
There has been growing recognition of the importance of energy efficiency in India's
electricity sectors. The Ministry of Power (MoP) is the nodal agency for energy conservation
in the country. The Bureau of Energy Efficiency (BEE), an autonomous body under the MoP,
was set up in 1989 to coordinate initiatives and activities on energy conservation. Several
state electricity boards( SEBs) have also set up Energy Conservation Cells, some of which
have been assisting industries in conducting energy audits. Several reports have been
attempted to estimate the potential for energy conservation in various consuming sectors and
have also identified various Energy Efficiency technologies (EETs) for important end-uses.

The National Energy Efficiency Program (NEEP) of the Government of India(GOI) has
targeted savings of about 5000 MW to be realized by the end of the Eighth plan through both
demand (2750 MW) and supply side (2250 MW) efficiency improvements. In terms of
Government policies, there are special equipment in the first year, subsidies for energy
audits, reduced customs duty for selected control equipment for managing energy use, and so
on.
5.1.3.2. Environmental Reform in the Electricity Sector:
Enhanced economic activity and population growth have led to increasing energy demand
that in turn has spurred electricity generation. But large-scale electricity generation and
distribution have adverse environmental impacts, varying by the technologies employed and
their locations. These need to be addressed so that energy services can be enhanced in
harmony with the environment, within our ecological footprints. Due to the “externalities” of
electricity generation, that is, the negative impacts not directly affecting or being restricted to
those involved, the costs of impact mitigation are typically not included in electricity prices.
Consideration for the environment has therefore to be forced into the reckoning, or preferably
integrated into the system, hence the importance of environment policy in the context of the
power sector.
Focusing on environmental issues and policies applicable to the power sector in China and
India. These countries generate 68% of the electricity generated in developing Asia, but with
a total population of about 2.4 billion, have large unmet needs.
In approaching the problem of environmental protection in the power sector in rapidly

developing country, our analytical framework consists of identification of those state
environmental policies and regulations that pertain to the power sector, both directly and
indirectly, assessment of the barriers encountered, and finally recommendations of likely
solutions to circumvent these problems.
Let us consider the impacts of electricity generation on the environment. The focus is on to
list the national environmental policies that affect these impacts, beginning with general
direction, proceeding to specific rules and standards and then to alternatives to conventional
electricity generation. This leads to the problems that beset effective policy implementation.

CHAPTER 6
IMPACT OF POWER SECTOR

6.1. POWER SECTOR IMPACTS ON THE ENVIRONMENT
The need for electricity – for productive purposes and for extending home electrification –
far outstrips supply in India. In 2004, Indian utilities generated 587 TWh from 118.4 GW,
with a shortage of about 43 TWh (CEA-GoI, 2005). Hence, while demand side management
(DSM) and efficiency improvement can reduce the demand-supply gap, increased generation
– through more power plants and/or increased utilization of existing capacity – is essential.
Electricity generation has several impacts on the environment, depending on the choice of
technologies. While the evaluation of specific power plants would necessitate the assessment
of site and plant-specific issues, in general, one can consider source-specific local, regional,
and global impacts.
6.1.1. LOCAL IMPACTS
Large power sources can affect their surroundings through impacts such as air pollution,
submergence of land and waste accumulation, excessive resource use and disruption of
human activity.
The impacts of coal-based thermal plants are particularly important in a study of India, as
these plants currently provide the largest generating capacity in India, and about 80% of the
actual generation. Electricity generation consumed 67% of India’s coal use, in 2002; further,
India’s coal consumption is projected to grow 2.2% annually between 2002 and 2025 (EIA,
2005).
Most of the existing thermal power plants in India use the traditional pulverized coal
combustion technology. As a result, they have to contend with gaseous emissions including
carbon dioxide, nitrogen oxides, carbon monoxide, sulphur dioxide, mercury and particulate
matter. Coal-burning thermal power plants in India are responsible for about 40% of the
country’s SO2 and 41% of its CO2 in 2000 (Shukla, Nag, & Biswas, 2003). Coal-plant

emissions far outweigh those from other fossil-fuel plants contributing to acid rain, and air
pollution and the consequent adverse effects on health.
When based on locally mined coal, the associated problems of mining accidents and land
degradation are serious. In some areas, the use of high ash coal results in disposal problems,
although ash does have productive uses such as brick-making. However, with the alternative
fossil-fuel options, oil- and gas-based plants, too, issues of waste disposal and possible
drilling and pipeline accidents have to be considered. The water use by some thermal plants
constitutes a more serious problem; Indian thermal power plants reportedly use 88% of the
country’s industrial water supply (DTE, 2003). Temperature increases and pollution of
receiving water bodies through inadequately treated effluents have also to be dealt with.
Although based on a clean and renewable source, large hydroelectric plants are not impact-
free. Large dams can cause submergence of human settlements and natural forests, adversely
affecting or even destroying people’s livelihoods, particularly traditional lifestyles, and also
terrestrial ecosystems. However, the magnitude of these impacts varies with the location and
the height of the dams constructed.
With nuclear power plants, radiation hazards (not only through accidents), and disposal of
radioactive spent fuel must also be contended with. Thus far, no country is sure of safe and
permanent waste disposal. And, while clean in terms of carbon-emissions, both ends of the
nuclear fuel cycle – uranium mining and nuclear waste – have harmful environmental
impacts, if not very carefully managed.
However, environmental impact costs are not easily quantifiable. Pollution-induced health
impacts are underestimated when economically disadvantaged people do not obtain medical
treatment; similarly, disruption costs of displaced communities could be inestimable.
6.1.2. REGIONAL IMPACTS
Regional pollution issues, for example the issue of acid rain and sulphur deposition, have
received attention in Northeast Asia. While the magnitude of coal-fired power plants'
contribution may be disputed, particularly during winter and spring, when dominant high-
pressure systems sweep accumulated pollutants off the landmass toward the eastern ocean-
mass.

6.1.3. GLOBAL IMPACTS
The Indian power sectors contribute about 52% of the carbon emissions in the country. Due
to the magnitude of its electricity generation, China’s total carbon emissions are over three
times those from India and even on a per capita basis are over 2½ times. However, as
emissions per capita are low by international standards (EIA, 2003), and developing
countries are not required to adopt greenhouse gas (GHG) reduction targets under the Kyoto
protocol (in effect from February 16, 2005), global issues currently remain less important
than local impacts.
6.2. NATIONAL ENVIRONMENTAL LEGISLATION AFFECTING THE

ELECTRICITY SECTOR
Energy Conservation Act, 2001 (with effect from 2002)
 National Environment Appellate Authority Act, 1997

 National Environment Tribunal Act, 1995
 Ministry of Environment and Forests Environmental Impact Assessment
Notification, 1994 (and additional notification of September 2005)
 Central Pollution Control Board’s National Ambient Air Quality Standards
Notification, 1994
 Environment (Protection) Act, 1986, amended 1991 (followed by Rules and
amendments of 1986, 1998, 1999, 2001, 2002, 2003, 2004)
 The Air (Prevention and Control of Pollution) Act, 1981, and Amendment, 1987
 The Water (Prevention and Control of Pollution) Act, 1974, amended 1988
 42nd Amendment, 1976, to the Indian Constitution (1949)
a. Article.48A (directing the State to make efforts for the protection and improvement of the
environment)
b. Article 51A(g) (stating that every citizen has a fundamental duty towards protecting the
environment)
2. The Atomic Energy Act, 1962 and Radiation Protection Rules, 1971
6.3. NATIONAL ENVIRONMENTAL POLICIES RELEVANT TO THE

ELECTRICITY SECTOR
National Electricity Policy, 2005
 National Environmental Policy, 2004

 Environmental Action Plan, 1993 (including cleaner technologies & development of
alternative energy projects)
 The National Conservation Strategy and Policy of Environment and Development,
1992
 The Policy Statement for Abatement of Pollution,1992 (including pollution
prevention at source, adoption of “polluter pays principle”, & encouragement of best
practices)
 National Water Policy, 1987 (with first priority for drinking water, followed by
irrigation, hydro power, navigation, industrial and other uses)

CHAPTER 7
STUDY OF SELECTED COMPANIES

STUDY OF SELECTED COMPANIES
To study and analyze the power sector better, the comparative and analytical study of the Top
5 and Bottom 5 listed firms of power sector in India are done. The firms are chosen based on
their sales turnover. The below are the firms selected by us for the study,
TOP 5
 NTPC
 Energy Develop
 Tata Power
 Power Grid
 Torrent
BOTTOM 5
 JP Hydro
 Reliance Infra
 KSK Energy
 GVK Power
 Indowind Energy

7.1. NTPC Ltd.
NTPC Limited is the largest power generating and Navratna status company of India; it was
incorporated in the year 1975 as National Thermal Power Corporation Private Limited to
accelerate power development in the country. As a wholly owned company of the
Government of India, NTPC has emerged as a truly national power company, with power
generating facilities in all the major regions of the country. NTPC's core business is
engineering, construction and operation of power generating plants. NTPC as an integrated
Power Major with presence in Hydro Power, Coal mining, Oil & Gas exploration, Power
Distribution & Trading and also enter into Nuclear Power Development. It provides
consultancy also in the area of power plant constructions and power generation to companies
in India and abroad. It is providing power at the cheapest average tariff in the country. With
its experience and expertise in the power sector, also NTPC is extending consultancy services
to various organisations in the power business. The consulting Wing of NTPC is an ISO
9001:2000 accreditation. In the year of 1982, the company commissioned the first Singrauli
unit.
The Company's status was converted into a public limited in the year 1985 and the name was
changed to National Thermal Power Corporation Limited. In the year 1989, the company
commissioned first gas based combined cycle plant (88MW) at Anta, Rajasthan and its
consultancy services division was commissioned during the same year. The Company had
taken over the 2x210 Mw Feroze Gandhi Unchahar Thermal Power Station in the year 1991,
which was owned by UP RajyaVidyut Utpadan Nigam of Uttar Pradesh. The first gas turbine
was synchronised in 1991-92 and the Unit-I of the company was synchronised in March of
the year 1992. Pursuant to legislation by Parliament of India, the transmission systems owned
by the company was transferred to Power Grid Corporation of India Ltd during the year of
1992. The Company's three gas turbines and two steam turbines were commissioned in the
1992-93. A tripartite agreement was signed between NTPC, UPSEB and GAIL for direct
power supply to GAIL during the year of 1994. NTPC had undertook the 4x60 MW + 2x110

MW Talcher Thermal Power Station during the year of 1995 from the Orissa State Electricity
Board. MOUs had signed with M/s. Nagarjuna Litecrete Ltd. and M/s. Ria-Shelcon for
setting up ash based products manufacturing units with ash from Ramagundam and Farakka
Power Stations.
In 1998, the company commissioned the first Naptha based plant at Kayamkulam with a
capacity of 350MW. Maharashtra State Electricity Board has signed separate power purchase
agreement with the company for the total power supply of 1,345 mw from Kawas-II,
Gandhar-II, Vindhyachal-II and Siptat power stations in the year of 2000. NTPC has signed a
memorandum of understanding with the Ministry of Power for generating 9,400 million units
of electricity during the year. The Company forayed into wind power segment, started the
preliminary work on two projects in Karnataka and Tamil Nadu each with a capacity of 20
MW. The Company has established a 2000MW gas-based power plant near Mangalore. The
4x110 MW of Tanda Thermal Power Station, which was taken by the company in the year
2000, the UP State Electricity Board formerly owned it. NTPC has launched a drive to
recover arrears from the electricity boards of Maharashtra, Madhya Pradesh, Gujarat, Goa,
Daman and Diu and Dadra Nagarhaveli. The Company has signed a memorandum of
understanding with the government to generate 121,000 million units of electricity during
2001-2002.
During the year 2002, the company incorporated three wholly owned subsidiary of the
company viz. NTPC Electric Supply Company Limited, NTPC Hydro Limited and NTPC
Vidyut Nigam Limited. Golden Peacock Award conferred to the company for Corporate
Social Responsibility in14th November of the year 2003. Unit IV (500 MW) of Talcher
Super Thermal Power Project - Stage II (TSTPP-II) of THE COMPANY has been
successfully synchronized on 6th February 2005. The 500 MW Unit at Ramagundam Super
Thermal Power Station has commenced commercial operation on 25th March 2005. In May
of the year 2005, NTPC and Defence Metallurgical Research Laboratory (DMRL) have
signed an MOU. NTPC has bagged IPMA International Project Management Award 2005 for
its Simhadri Thermal Power project on 15th November 2005.
NTPC established the medium Term Note ('MTN') Programme in February of the year 2006
to facilitate the raising of funds on a regular basis from the international debt capital markets

and also signed an MOU with Delhi Transco Ltd., (DTL) on 10th February 2006 for
expansion of one of its stations namely National Capital Power Station Stage-II at Dadri (U.
P.). During the March of the year 2006, NTPC Ltd has entered into a Memorandum of
Understanding with Petronet LNG Limited for arranging one MMTPA of LNG, which used
to overcome shortage of gas at the existing gas power stations of NTPC. The Company had
taken over the Badarpur Thermal Power Station with the capacity of 705MW in the year
2006 from Central Electricity Authority. The Company had signed a Memorandum of
Understanding in 11th March of the year 2006 with the Energy and Resources Institute
(TERI) for implementation of distributed generation projects in villages in India. A 500 MW
unit of Vindhyachal Super Thermal Power Project - Stage III of NTPC Limited located in the
state of Madhya Pradesh has been successfully synchronized on 27th July 2006. NTPC
Limited and Singareni Collieries Company Limited have signed a Memorandum of
Understanding during August of the year 2006, for creation of a Joint Venture Company to
undertake various activities in coal and power sectors including acquisition of coalmines,
development and operation of integrated coal based plants and providing consultancy
services. The Company has signed a Memorandum of Agreement (MOA) in September 21st
of the year 2006 with the Government of Arunachal Pradesh for implementation of the
following two hydroelectric power projects in the States of Arunachal Pradesh. NTPC had
formed a joint venture Company under the name and style of 'Aravali Power Company Pvt
Ltd' on December 21, 2006 with Haryana Power Generation Corporation Ltd (A Government
of Haryana Undertaking). The Company has signed a MoU in February 14th of the year 2007
with Bharat Earth Movers Limited (BEML) for collaborating and associating with NTPC for
a long-term mutually beneficial business.
A 500 MW unit of Vindhyachal Super Thermal Power Project, Stage III of NTPC Limited
located in the state of Madhya Pradesh has been successfully (test) synchronized in the night
of 8th March 2007. Signed a Memorandum of Understanding with Coal India Limited on
15.03.2007 for undertaking development, operation & maintenance of coal blocks and
integrated coal based power plants. NTPC signed an agreement for a term loan of USD 100
million with KFW of Germany on March 23, 2007 at Frankfurt am Main.
During the year 2007-08, the MOU was signed with ADB for establishment of power
generation capacity of about 500 MW through Renewable Energy Sources. The JVA was

signed between NTPC and BSEB for setting up 3x660 MW at Nabinagar, Bihar and also
another one JVA was signed with UPRVUNL to set-up 2x660 MW power project at Meja
Tehsil in Allahabad, UP. The Joint Venture Company (Subsidiary of NTPC) under the name
of 'Bhartiya Rail Bijlee Company Limited' incorporated with Railways for setting up 1000
MW coal based power plant at Nabinagar, Bihar. Business Collaboration and Share Holder's
Agreement signed with Govt. of Kerala and TELK to acquire around 44.6% stake of TELK.
The MOU was signed with Bharat Forge Limited for setting up a new facility to take up
manufacture of Balance of Plant equipments, castings, forgings, fittings etc. JVA signed with
BHEL for taking up activities related to carrying out EPC and manufacturing of equipments
in the period of 2007-08. The 500 MW Unit-I at Sipat Super Thermal Power Project, Stage-II
has commenced commercial operation in June of the year 2008. NTPC has signed a
Memorandum of Understanding (MOU) with Secretary (Power), Government of India for
generating 2.09 billion units of Electricity during the financial year 2008-09.
Developing and operating world-class power stations is NTPC's core competence. Its scale
of operation, financial strength and large experience serve to provide an advantage over
competitors. To meet the objective of making available reliable and quality power at
competitive prices, NTPC would continue to speedily implement projects and introduce
state-of-art technologies.
Fig.5: Growth of NTPC

Source:http://tempweb606.nic.in/index.php?option=com_content&view=article&id=40&Ite
mid=86
Fig. 6: NTCP PERFORMANCE
Source:http://tempweb606.nic.in/index.php?option=com_content&view=article&id=40&Ite
mid=86
COMPANY PROFILE:
Company name : NTPC Ltd
Address : NTPC Bhawan Scope Complex,
7-Institutional Area Lodi Road,
New Delhi - 110003, New Delhi.
Year of Establishment : 1975
Chairman : Mr. R S Sharma

E-mail : info@ntpc.co.in
Website : http://www.ntpc.co.in
Production Capacity : 29,394 MW
7.2. RELIANCE INFRASTRUCTURE LTD
Reliance Energy Limited (REL), with its corporate lineage going back to 1929. At the time of
incorporation REL was called as Bombay Suburban Electric Supply Limited (BSES). The
company has been in the field of power distribution for nearly eight decades and with its
emphasis on continuous improvements. REL is a fully integrated utility engaged in the
generation, transmission and distribution of electricity. It ranks among India's top listed
private companies on all major financial parameters, including assets, sales, profits and
market capitalization. A key constituent of the Reliance - Anil Dhirubhai Ambani Group,
India's third largest business house. Reliance Energy has emerged as one of the leading
players in India in the Engineering, Procurement and Construction (EPC) segment of the
power sector. Reliance Energy company currently pursue several gas, coal, wind and hydro-
based power generation projects in Maharashtra, Uttar Pradesh, Arunachal Pradesh and
Uttaranchal with aggregate capacity of over 13,510 MW. Reliance Energy is also active in
the trading and transmission of power sector and has forayed as an equity investor in to the
infrastructure business, including in the prestigious Mumbai metro rail project and various
road projects of the National Highways Authority of India. REL has also entered into the
Internet service provider business in a big way by the name of powersurfer.net. REL (BSES)
has several group companies - ST-BSES Coal Washery (Joint Venture), BSES Infrastructure
Finance, Utility Powertech (Joint Venture), Ticapco, BSES Telecom, BSES Kerala Power,
BSES Andhra Power and three new companies of Orissa. The company has a strategy of
adding value by strategic alliances within the group.
In March 2000 company has been operated "BSES Telecom" as an Internet service provider
(ISP) in Mumbai and has a fiber optic network to support its last mile services and also
exploring alliances for providing utility solutions. Dahanu Power Station achieved a plant
load factor (PLF) of 82.68% during 2000-01. In 2001-02, the BSES Kerala Power Ltd had
commissioned the power station in the Combined Cycle mode but due to various reasons the
BKPL has suspended its operations from October, 2001. OFGW of 220 KW transmission line

between Ghodbunder, Versova and Dahanu was successfully completed. RE L's Wind Energy
has one of the highest PLF in the country in the wind farm segment. Contracts and EPC
Division was instrumental in construction and erection works of 5,000 mw in Indian and
other industrial and infrastructure projects. BSES Infrastructure Finance has tied up funds for
various projects to the tune of over Rs 1,500 crore. Utility Powertech is a JV with National
Thermal Power Corporation (NTPC) has 250 operational sites.
During the year 2002-2003, the company has successfully commissioned 210 MW Gas
Based Combined Cycle power plants for BSES Andhra Power and 24 MW Bagasse fired
Power Plant for Godavari Sugar Mills Ltd and 20 MW for Suryachakra Power Corporation
Ltd. In April 2003 Andhra Power Ltd and Reliance Salgocar Power Company Ltd were
amalgamated with the company. During the year 2003-2004, the Company was renamed to
Reliance Energy Ltd from its old name BSES. Reliance energy continues to receive
prestigious awards and recognitions for its outstanding performance in various fields and
through various sources. The Dahanu Power Station received the National Award for
Excellence in Energy Management and National Award for Excellence in Water Management
from the Confederation of Indian Industry and also company got the Maharashtra safety
award-2004 from the Maharashtra Chapter of National Safety Council.
Gold Shield for Meritorious Performance by the Central Electricity Authority (CEA) of the
Government of India for its excellent performance amongst Indian thermal power plants in
the year 2004-05, which was presented by the Honorable Prime Minister of India. The power
station also obtained OSHAS 18001 certification from BVQI during the year of 2005-06.
During the year 2006-07, Reliance Energy had received many awards such as Golden
Peacock Award for its pursuit of excellence in corporate governance, International Quality
Crown Award London 2006 in Gold category, Srishti Good Green Governance (G-Cube)
Award and participated in the prestigious Ramakrishna Bajaj National Quality Awards, the
company was awarded a commendation certificate for the same. In April 2007 REL planned
to set up a 1,400 Mw gas-based power project in Delhi and also company has estimated that
it would have to invest Rs 60,000 crore in next five years to add a capacity of 15,000 MW of
power. As on September 2007 REL considered to hive off its engineering, procurement and
construction (EPC) division into a new company.

Reliance Energy distribute more than 28 billion units of electricity to cover 25 million
consumers across different parts of the country including Mumbai and Delhi in an area that
spans over 1,24,300 sq. kms. It generates 941 MW of electricity, through its power stations
located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa. These projects are at
various stages of development. Company wants to attain global best practices and become a
world-class utility and to provide uninterrupted, affordable, quality, reliable and clean power
to millions of customers. Future plan and action of the company is installation of third
cooling tower cell to improve plant reliability and output. Energy savings by installation of
energy efficient blades on cooling tower fans. ETP pump modification to reduce auxiliary
power consumption. Auto - locking facility of energy meters at midnight to facilitate
simultaneous logging of energy meter readings. The company has targeted to complete all
activities under the six sigma project, ISO 27001 and OHSAS certifications during 2007-08,
which will make Reliance Energy the first utility in the country to achieve these
certifications. These initiatives are aimed to cater the market and at further promoting
business excellence in all functional areas of the company. In 2008 company engaged in
several mega projects under implementation and under consideration in different functional
areas, in that the notable two big projects are engineering, procurement and construction
(EPC) contract from Damodar Valley Corporation (DVC) to set up the 2 x 600 MW coal
based power station at Raghunathpur in West Bengal worth of Rs 3,725 crore and Airport
Metro Express Line, Delhi project on BOOT basis for a concession period of 30 years worth
of Rs 2,500 crore.
PROFILE:
Company name : Reliance Infrastructure Ltd
Address : Reliance Energy Centre,
Santa Cruz (East),
Mumbai - 400055, Maharashtra
Chairman : Anil D Ambani
E-mail : helpdesk@rel.co.in/rel.investor@relianceada.com

Website : http://www.rinfra.com
Production Capacity : 941 MW
7.3. TATA POWER COMPANY LTD
Tata Power Company Limited (TPC), India's largest integrated Electric Power Utility in
private sector with a reputation for reliability, incorporated in the year 1919 at Mumbai. TPC
pioneered the generation of electricity in India nine decades ago. The core business of Tata
Power Company is to generate, transmit and distribute electricity. The Company operates in
two business segments: Power and Other. The Power segment is engaged in generation,
transmission and distribution of electricity. The other segment deals with electronic
equipment, project consultancy.
The Tata-Ebasco Consulting Engineering Services' was established based on partnership with
Ebasco India, Ltd for consulting engineering together with its two associated companies in
the year 1961. In the year 1969, a new company under the name Chemical Terminal Trombay
Ltd was formed in participation with other Tata Companies and Elephanta India Private Ltd
to installation of storage tanks on a part of the Company's ash disposal area at Trombay and
the laying of a pipeline connecting the storage tanks with the Mumbai Port Trust's pier at Pir
Pau. TPC sets up its new manufacturing facility at Bangalore during the year 1980, for
commercial production of electronic items designed by its R&D laboratory.
TPC has undertaken a 180 MW combined cycle plant at Trombay using gas turbines. In
1989, six new outlets for BEST at 33 KV from Carnac receiving stations were commissioned
during the year. In the same year the company also associated with Siemens in the erection
and commissioned the mechanical and electrical equipment for the 4 x 130 MW gas turbines
and 2 x 150 MW steam turbines at NTPC's combined cycle power plant at Dadri in Uttar
Pradesh. The second 500 MW units 6 at Trombay was trial synchronized with the grid on
23rd March 1990. The Company took up two major generation projects, viz., 150MW
Pumped Storage Unit at Bhira and a gas-based 180 MW Combined Cycle Plant at Trombay
Thermal Power Station in case of a major system disturbance and supply power to essential
consumers, viz., Railways, BMC, BARC, etc. TPC started one new 110 KV substation at

Versova during 1991, which comprised 2 x 90 MVA, 110/33 KV power transformers along
with 33 KV indoor SF6switchgear and supervisory control and data acquisition system and
also another one switching station was established in the same year, which comprised 3 x 250
MVA, 220/110/33 KV autotransformers, space saving 245 KV gas insulated switchgear and
supervisory control and data acquisition system.
The modern 22 KV indoor SF6switchgear was installed at Salsette and also the 60 MVAR
new capacitor banks were installed during the year 1992 at Versova and Malad. Apart from
these, replacement of 110 KV oil circuit breakers by modern SF6 breakers at Kalyan,
Ambernath, Vikhroli and Salsette receiving stations and extension of fibre optic
communication network were also carried out during the same year. In 1994, the Trombay
Unit-7 steam turbine generator of the company was harmonized, which generated 650 MUS
with PLF of 61.9%. During the year, the Company undertook the work of strengthening dams
as per designs codes in respect of earthquakes.
The Government of Maharashtra had accorded its permission for rebuilding a dam at
Somwadi. A MoU was signed between TEC and the Tennesse Valley Authority of USA for
renovation and modernisation of power plants. In the same year 1994, the Company issued
91,549 Global Depository Shares. The 150 MW Pumped storage unit was commissioned in
the year 1995, based on the synchronous condenser mode and also the Company undertook
the work of modernisation and renovation of old 12 MW hydro units at Bhivpuri and Khopoli
Generating Stations. In the year 1996, the generating station five 25 MW units were
refurbished by installation of new modern turbine runners of higher efficiency at Bhira.
During same the year, the Company bagged the Multi-fuel based 80 MW power project from
the Government of Karnataka. The thermal Units at Trombay operated by the company in the
year 1997 based on-line availability of about 74% and utilization of about 64.3%. TPC
entered into a Joint Venture Agreement with Total Gas and Power India in the year 1998 for
establishment of LNG Terminal at Trombay.
During 1999, the company acquired a generating station consisting of 37.5 MW Unit at Wadi,
Karnataka and also in the year the Power Purchase Agreement for 81.3 MW Diesel-based
Power Plant at Belgaum, Karnataka was signed with Karnataka Electricity Board. Tata Power
Company has obtained A' licence as Internet service provider that enables it to operate
throughout the country in the year 2000. The Andhra Valley Power Supply Company Ltd and

Tata Hydro Electric Supply Company Ltd were merged with the company in the same year
2000. Tata Power Company Ltd on September of the year 2001, decided to sell its stake
consisting of 45 lakh shares in Tata Liebert Ltd (TLL) considering of Rs 170 per share to
Emerson Electric (Mauritius) Ltd. The Company signed an agreement with Power Grid
Corporation of India Ltd for 'Tala Transmission Line' in the year 2002. The 120 MW Unit 3
at the Jojobera Power Plant of the Company situated in Jamshedpur was commenced its
commercial production. TPC has signed the share acquisition agreement with Gvt of National
Capital Territory of Delhi to acquire the North North-West Delhi Distribution Co. Ltd.
(Discom-III), a distribution company belonging to the Delhi Vidyut Board (DVB), which
supplies power to north and northwestern Delhi. The company ties up with the UK-based
energy major British Petroleum to jointly work on 2,184 mw Dabhol power project during
the year 2003. During the same year 2003, TPC awarded the contract for supply and
construction of 180 KM long 400 KV Double Circuit Transmission Line from Palandur to
Chandrapur (Maharashtra) By Power Grid Corporation of India Ltd. Tata Power infuses Rs
352 crore in the group's telecom businesses.
Tata Power acquired 100% equity stake in Tata Power Trading Co. Pvt Ltd in the year 2004.
The Christened Tata Power Trading Company was incorporated in the year as a subsidiary of
the company. TPC has signed a Development Agreement with GAIL India Ltd & BP to
jointly participate in evaluating the Dabhol gas and power opportunity. A MoU was signed
with National Power Company of Al-Zamil Group, Kingdom of Saudi Arabia. The company
bagged the 2nd Wartsila - Mantosh Sondhi Award for outstanding contribution to the Indian
Power Sector in 2004. Tata Power signed a generation pact with DVC on Maithon Project in
the year 2005 and entered into an agreement for sale of shares in Tata Power Broadband. The
company received CII EXIM Bank Award 2005 for 'Certificate for Strong Commitment to
Excel'. During the period of 2006, the company joined hands with Siemens. The company
signed a joint venture agreement with Tata Steel to set up a Captive Power plants in
Chattisgarh, Orissa and Jharkhand. The company received seven licenses from the Gvt of
India, Ministry of Commerce and Industry, Dept of Industrial Policy & Promotion for its
Strategic Electronics Division (Tata Power SED).
In the year 2007, TPC has signed a MoU with the Government of Chhattisgarh for the setting
up of a 1000 MW coal fired mega power plant in the State. The company has roped in Korea-

based Doosan Heavy Industries and Construction Ltd for supercritical boilers for its Mundra
ultra mega power project. The acquisition of Coastal Gujarat Power Ltd was med by the
company and a Special Purpose Vehicle (SPV) formed for Mundra Ultra Mega Power Project
(UMPP). TPC has signed an EPC contract for supply of five (5) 800 MW Steam Turbine
Generators with Toshiba Corporation for the first 4000 MW Ultra Mega Power Project
(UMPP) in India to be located at Mundra, Gujarat in August 2007.
As on February 2008, The Tata Power Company Limited (Tata Power) and Damodar Valley
Corporation (DVC) jointly completed its financing for the 1050 MW coal based thermal
power project, being set up in Dhanbad District of Jharkhand State. Recognising the steady
and stable performance in generating quality and reliable energy, the Central Electricity
Authority has awarded Tata Power's Bhira Hydro generation facility with the Silver Shield
award for the meritorious performance in March 2008. April of the year 2008, Tata Power
completes the Signing of Financial Agreements for 4000 MW Ultra Mega Power Project,
coming up at Mundra, Gujarat. The cost of the project is estimated at INR 17000 crores
(USD 4.2 billion). Tata Power announced in September of the year 2008, it would acquire a
11.4 per cent stake in Geodynamics Ltd, an Australian company specialising in geothermal
energy, for Rs 165 crore.
Tata Power is surging ahead, lighting up lives through its activities from its inception. The
challenge of fulfilling the ever growing needs of power have been met by Tata Power through
efficient generation, transmission, distribution and constant upgradation of its technology in
every aspects.
PROFILE:
Company name : Tata Power Company Ltd
Address : Bombay House,
24 Homi Mody Street,
Mumbai, 400001, Maharashtra
Chairman : Mr. R N Tata

E-mail : investorcomplaints@tatapower.com
Website : http://www.tatapower.com
Production Capacity : 2300MW
7.4. POWER GRID CORPORATION OF INDIA LTD
The Company was incorporated in October 23rd of the year 1989 as the National Power
Transmission Corporation Limited with the responsibility of planning, executing, owning,
operating and maintaining the high voltage transmission systems in the country.
Subsequently, the company name was changed to the present name Power Grid Corporation
of India Limited (PGCIL) with effect from October 23rd of the year 1992. The company's
operational area includes, Development of Inter-State transmission Systems and Grid
Management. Development of Inter-State transmission Systems consists of Planning &
Design, Construction, Quality Assurance & Inspection and Operation & Maintenance. Grid
Management includes Establishment of modern Load Despatch Centres, Real-time Grid
Operation, Optimum scheduling & despatch and Energy accounting including settlements.
The Diversification consists of Broadband Telecom Services, Sub-transmission, Distribution
and Rural Electrification. The company has certified as PAS 99:2006, which integrates the
requirements of ISO 9001:2000 for quality, ISO 14001:2004 for environment management
and OHSAS 18000:1999 for health and safety management systems.
PGCIL has commenced the operations in the year 1992 as part of an initiative of the
Government of India to consolidate all the interstate and inter-regional electric power
transmission assets of the country in a single entity. In the year 1993 Tehri Hydro
Development Corporation Limited's assets were transferred to PGCIL pursuant to a
memorandum of understanding executed between the both. Since 1994, the GOI has
progressively entrusted the company with the operation of the Regional Load Despatch
Centres ('RLDCs') in each of the five regions into which India is divided for purposes of
power transmission and regulation. From the year 1995, the consultancy division of the
company has provided transmission-related consultancy services to domestic and
international projects. In consultancy business, the company has also facilitate the
implementation of various GOI-funded projects for the distribution of electricity to end-
users, such as the Accelerated Power Development and Reform Programme ('APDRP') in

urban and semi-urban areas and the Rajiv Gandhi Grameen Vidhyutikaran Yojana (the
'RGGVY') in rural areas. During the year 1995, the company took over the management of
the Eastern Regional Load Despatch Centre and the North Eastern Load Despatch Centre.
Again in 1996, the company captured over the management of the remaining two regional
load despatch centres, namely, the Northern Regional Load Despatch Centre and the Western
Load Despatch Centre. In 1998, the Government of India formally notified the PGCIL as a
Central Transmission Utility and also in same year PGCIL was declared as a Mini Ratna
Category I public sector undertaking by the Government of India.
Department of Telecommunications, Government of India has granted the Infrastructure

Provider II license (IP II) to the company in the year of 2001, for pursue leasing of bandwidth
capacity to various customers on its telecommunications network. During the year 2002, the
company commissioned the unified load dispatch and communications schemes for the
northern and southern regions. The Sasaram HVDC back to back transmission system
developed by the PGCIL was commissioned leading to the completion of the first phase of
the construction of the National Grid and also the 2,000 MW Talchar-Kolar bipolar HVDC
link was commissioned, which also developed by the company.
The Company had entered into a joint venture arrangement with Tata Power Company
Limited during the period of 2003 for implementing a part of the entire transmission system
associated with Tala Hydro-Electric Project which was the first public-private sector
initiative in the transmission sector. PGCIL had developed the 400 KV Raipur-Rourkela line
transmission lines and it was commissioned. Also in the same period of 2003, the Western
region, Eastern Region and North-Eastern Region begin operating in a synchronised manner
with a cumulative capacity of 50,000 MW. The Company secured its first international
consultancy contract from Bhutan Telecommunications. The unified load dispatch and
communications scheme for the eastern region was commissioned in the year of 2005. After
a year, in 2006, the unified load dispatch and communications scheme for the western region
was commissioned. In the same year 2006, PGCIL had entered into an agreement with Rural
Electrification Corporation Limited and certain state governments and state utilities for
undertaking rural electrification works under the Rajiv Gandhi Grameen Vidyutkaran Yojana
in nine states. Power Grid Corporation of India Ltd (PGCIL) has been selected for the
Government's MoU Excellence Award for the year 2006-07.

PGCIL has signed a loan agreement with Asian Development Bank (ADB), Manila for US$
400 million on March 28th 2008, as well as in the same date, same month and same year the
company has signed a loan agreement with The World Bank for USD 600 Million. As on
May 1st of the year 2008, the Government granted coveted 'Navratna' status to Power Grid
Corporation of India Ltd, giving the transmission major financial autonomy to take
independent decision on investments up to Rs 1,000 crore. The company is looking to tap the
potential of its telecom business and consultancy; the electricity towers could be an ideal
place to locate the cellular phone transmission towers in the future.
PROFILE:
Company name : Power Grid Corporation of India Ltd
Address : B-9 Qutab Institutional Area,
Katwaria Sarai,
New Delhi - 110016, New Delhi
Chairman : S K Chaturvedi
E-mail : investors@powergridindia.com
Website : http://www.powergridindia.com
Transformation capacity : 77,217 MVA

7.5. TORRENT POWER LTD
Torrent Power Limited (TPL) is an integrated power company engaged in the generation and
distribution of electricity in the cities of Ahmedabad, Gandhinagar and Surat in the state of
Gujarat and Bhiwandi Franchise in Maharashtra. TPL was incorporated in 29th April of the
year 2004 as Torrent Power Trading Private Limited.
Torrent brought together three of its group companies during the year 2004-05, Torrent
Power AEC Limited, Torrent Power SEC Limited and Torrent Power Generation Limited
under a single, unified brand as Torrent Power. Government of India conferred Gold shield
for best performance in power distribution for the years 2004-05 and also for 2005-06. TPL
and Siemens created a 50:50 JV to provide O&M services to its SUGEN 1147.5 MW CCPP
in the year 2005-06. The Company had awarded EPC contract for its SUGEN 1147.5 MW
CCPP to a consortium of Siemens AG and Siemens Ltd. India; commenced construction of
its first power block. The Company had entered into a Joint Venture with Power Grid
Corporation of India Limited (PGCIL) in the same year 2005-06 for setting up dedicated
transmission lines of 440 KV for evacuation of power from 1100 MW SUGEN project to
Ahmedabad distribution area and to the National Grid through connectivity with PGCIL at
Dehgam and Loop In Loop Out of Gandhar- Vapi line. The name of the company was
changed to Torrent Power Private Limited in 25th January of the year 2006. Consequent to
the conversion of the company into a Public Limited Company in 8th February of the year
2006, the company came to be called as Torrent Power Limited.
As at 20th December 2006, the company had signed a distribution franchise agreement for a
period of ten years for the Bhiwandi circle in Maharashtra with Maharashtra State Electricity
Distribution Company Limited (MSEDCL). The Company had commenced Distribution
Franchise Bhiwandi circle of catering to 1.4 lakh customers with an unrestricted demand of
about 700 MW in 26th January of the year 2007. TPL had signed a memorandum of
understanding (MoU) with Gujarat Power Corporation in May of the year 2007 for setting up
over 1000-MW coal based power project at Pipavav, dist. Amreli in Gujarat. TPL made tie up

with Gujarat State Petronet Limited for the gas transportation in line with project
requirement. The Company had enhanced power transformation capacity during the year
2007-08 about 371 MVA by commissioned of two 220 kV substations at Surat and one 33 kV
substation at Ahmedabad. CRISIL had assigned AA- & P1+ ratings to the company's bank
facilities in March of the year 2008.
PROFILE:
Company name : Torrent Power Ltd
Address : Torrent House,
Off Ashram Road,
Ahmedabad - 380009, Gujarat
Chairman : Mr. Sudhir Mehta
E-mail : investorservice_ahd@torrentpower.com
Website : http://www.torrentpower.com
Production Capacity : 500 MW

7.6. JP HYDROPOWER
The Company was incorporated on December 21, 1994 with the object, interalia, to set up
hydro-electric or Thermal power projects and for the supply of general electric power. The
Certificate of Commencement of Business was granted on January 9, 1995. Our registered
office is in New Delhi. Jaiprakash Hydro-Power Limited (JHPL), a part of the Jaypee Group
owns and operates the 300 MW Baspa-II Hydroelectric Project at District Kinnaur in
Himachal Pradesh.
Financial Institutions approved the Project at an estimated project cost of Rs.11, 020 million
in March of the year 1995 and signed PPA as one of the pre-disbursement conditions.
Executed the tripartite agreement between JHPL, JAL and GoHP in the same year 1995
consenting the transfer of all assets, liabilities, obligations, privileges and benefits arising out
of MOU from JAL to JHPL. During June of the year 1997, the company signed PPA with
HPSEB pursuant to Implementation Agreement with GoHP. In the same year, the financial
institutions reappraised the project with a revised cost of Rs.12, 630 million. In January of
the year 2008, JHPL made an amendment in the PPA to include provisions for escrow
mechanism and letter of credit for realisation of payment from HPSEB. Accomplished the
agreement with Siemens AG Consortium, Germany and Alstom T & D, France in the year
1999 for import of electromechanical equipment and GIS/GIB respectively. Again the
financial institutions reappraised project cost at Rs.13, 450 million in the year 2000 and Rs.
16,120 million in the year 2002.
The Baspa-II project - India's Largest Private Sector Hydro-Power project has been fully
commissioned in 8th June of the year 2003 at a project cost of Rs 1624.72 crores and has
started generating power. Jaiprakash hydropower filed prospectus with ROC, all decks
cleared for IPO in power sector in third week of March 2005. During the year 2005-2006, the
company entered into a memorandum of Understanding with the Power Grid Corporation of
India Ltd to promote a Joint Venture Company for establishing a Transmission System for
evacuating power from 1000 KW Karcham Wangtoo Hydro-Electric Project. To minimize the
erosion due to silt (with large quartz content) during monsoons, two more modern technology

spare runners with Tungsten Carbide coating employing HVOF thermal spray have been
procured/ ordered. One such runner was put in operation in May of the year 2006. JHPL filed
the tariff application in 30th November of the year 2007 with Hon'ble HPERC for
determination of tariff for Financial Year 2008-09 to 2010-11, which is in process.
Present Scenario:
JPVL plan to implement a 2400MW hydroelectric project (the Lower Siang project),
expected to commence operations in 2014 and a 500 MW hydroelectric project (the Hirong
project), expected to commence operations in 2015, in the state of Arunachal Pradesh
(collectively the Arunachal projects). These projects were initially awarded to JAL and were
transferred to us through a tripartite agreement dated December 13, 2007. The memoranda of
agreement for these projects provide for the Government of Arunachal Pradesh to own 11%
of the equity capital in the special purpose vehicle that are to be incorporated to implement
each of these projects. JPVL proposes to subscribe 55.36% of the equity capital of Jaypee
Karcham Hydro Corporation Limited (JKHCL), which is implementing a 1000 MW ( 4*250
MW units) run-of-the-river hydroelectric power projects on the river Sutlej, in Kinnaur
district of the state of Himachal Pradesh , expected to commence operations in 2011 (the
Karcham –Wangtoo project).
PROFILE
Company name : JP Hydropower
Address : JA Annexe 54,
Basant Lok,
Vasant Vihar,
New Delhi-110 057.
Year of Establishment : Dec.21,1994
Name of CEO : Mr. Gagan Banga
E-mail : mm.sibbal@jalindia.co.in

7.7. ENERGY DEVELOP
Energy Development Company Limited was incorporated as a public limited company as on

the 19th January, 1995. The company took over execution of Harangi Mini Hydro Electric
Power project on BOT (Build Operate Transfer) basis for a period of 40 years from the date
of commissioning of the project. The project was initially awarded to M/s. North East Energy
Services ("NEES") USA, by the Government of Karnataka.
Accordingly an agreement was entered between the Government of Karnataka and M/s.
Public Power International Inc ("PPII") a group company of NEES acting on behalf of
NEES. In accordance with this agreement a new company was incorporated on the 19th
January, 1995 in the name of "Energy Development Company Limited" for executing the
project.
During the year 1999, the company signed Power Purchase Agreement with Karntaka Power
Transmission Corporation Ltd (Formerly KEB) for sale of entire energy generated, which
would be valid for 20 years. The Harangi Hydro Electric Project was finally commissioned
and synchronised with the grid on 14th July, 1999.
Energy Development Company Ltd has signed a Power Purchase Agreement with Hubli
Electricity Supply Company Ltd (HESCOM) in respect of its 6 Mw Harangi Phase - 2
Minihydel Project, which is subject to approval of the Karnataka Electricity Regulatory
Commission (KERC).Energy Development Company Ltd has signed a Power Purchase
Agreement (PPA) with Hubli Electricity Supply Company Ltd (HESCOM) in respect of its 6
Mw Harangi Phase - 2 Minihydel Project which is subject to approval of the Karnataka
Electricity Regulatory Commission (KERC). Energy Development Company Ltd has signed
a Memorandum of Understandings (MoU) with Government of Arunachal Pradesh to
develop 5 (Five) Hydro Electric Projects totaling to 210 MWs on BOOT basis.
PROFILE
Name : Energy Develop
Address : Harangi Hydroelectric Project

Village-Hulugunda, Kodagu, Karnataka-571233
Chairman : Mr. Amar Singh
E-Mail : edcl.investor@edclcal.com
7.8. KSK ENERGY

KSK Energy Ventures Limited (KSKEVL), a subsidiary company of KSK Energy
(Mauritius) was got birth on 14th February 2001 as a private limited company under the
name of KSK Energy Ventures Private Limited to capitalize on the emerging opportunities in
the Indian power sector and focus on developing, operating and maintaining power projects.
KSKEVL is a power project development company in India, with track record of developing
and operating power plants, which supply power to a combination of industrial and state-
owned consumers in India. Business model of the company includes Power Plant
Development, Security Fuel Linkages, Project Management & Development and Operation
Management. The company has operational power plants capable of generating 144 MW of
power, and currently constructing, developing or planning power projects capable of
generating an aggregate of 8,993 MW of power.
KSKEVL became a public company pursuant to a special resolution of the shareholders of

the company at an extraordinary general meeting held on February 9, 2002, and the word
'private' was deleted from its name. During the year 2004, the 'Small is Beautiful' Fund
achieved financial closure. After a year, in 2005, KSKEVL had signed a shareholders
agreement and a power purchase agreement with Lafarge India Private Limited to set up a 43
MW coal-based captive power plant in Arasmeta. In April of the same year 2005, the
company had executed an agreement with India Cements Limited for expansion of the power
plant of Coromandel Electric Company Limited by 8.73 MW. In November 2005, a Joint
venture agreement was signed with LB India Holdings Mauritius I Limited to form KSK
Electricity Financing India Private Limited. As on January 2006, the Coromandel Electric
Company Limited commenced commercial operation of Phase 2 of the 8.73 MW gas engine
based captive power plant and in May of the same year 2006, the 43 MW coal based captive
power plant of Arasmeta Captive Power Company Private Limited synchronized with the
grid.
KSK Power Ventur plc is a power project development company listed on Alternate
Investment Market (AIM) of the London Stock Exchange. KSK operates in India through its

fully owned subsidiary, KSK Energy Ventures Limited (KSKEVL). Its operations in the
Indian Power Sector are powered by the growth opportunities it realizes and capitalizes on.
An affiliate of Lehman Brothers of USA has 33.5% stake in KSKEVL.
Present Scenario:
In the existing scenario investors who have a long-term view of at least two years can remain
invested. Other investors can consider exiting the stock at an appropriate opportunity.
The company, which currently has a capacity of 144 mw, expects to commission a 135-mw
plant towards the end of ’08. Another plant of 540 mw capacity is expected to be
commissioned by December ’09. With these two plants, the company should be able to
nearly double its by FY10, compared to FY08.
PROFILE
Company : KSK Energy
Address : KSK Energy Ventures Limited

8-2-293/82/A/431/A
Road No:22, Jubilee Hills
Hyderabad 500033, INDIA.
Establishment : 2001
Tel : +91 40 23559922/23/ 24/ 25
Fax : +91 40 23559930
E-Mail : info@ksk.co.in
Main buyers : Industrial and state-owned consumers

7.9. GVK POWER

GVK Power & Infrastructure Limited (GVKPIL) is a listed public company belonging to
GVK, engaged in the business of owning, operating, and maintaining power plants by itself
and through its subsidiary/associate companies. GVK is amongst India's largest infrastructure
developers with experience and expertise spanning areas including hospitality,
manufacturing, power, roads, airports, SEZs and urban infrastructure. The Company was
incorporated in 2nd December of the year 1994 as a private company with unlimited liability
under the name of Jegurupadu Operating & Maintenance Company. GVK is amongst India's
largest infrastructure developers with experience and expertise spanning areas including
hospitality, manufacturing, power, roads, airports and urban infrastructure. Until date GVK
has invested over Rs. 5,000 crore in its various business and has on hand projects in the
pipeline of over Rs. 12,000 crore. GVK is developing power projects that are based on coal,
gas and hydel resources. The projects are being developed across several States in the
country including Andhra Pradesh, Punjab and Uttarakhand.
The Company was converted to a company with limited liability and consequently the name
was changed to Jegurupadu Operating & Maintenance Company Private Limited in 20th
April of the year 2005. Subsequently, it was converted from a private limited company to a
public limited company during 19th May of the year 2005 and renamed as Jegurupadu
Operating & Maintenance Company Limited. Thereafter, the name of the company was
changed to GVK Power & Infrastructure Limited as at 13th July of the year 2005. In October
of the year 2005, GVKPIL acquired GVKPPL and Transoceanic Projects Limited's equity
stake in GPL. Accordingly, 51% of the equity shares in GPL now held by GVKPIL continue
to remain pledged with PFC. In January 2006, the consortium led by GVK Group and
comprising Airports Company South Africa and Bidvest was awarded the mandate to
modernize India's busiest airport, the Chhatrapati Shivaji International Airport (CSIA) at
Mumbai. The GVK is a diversified business house with interests in a range of businesses
including power, roads, urban infrastructure, bio-science, hotels and manufacturing.

Managing Director of GVKPIL, is a first generation entrepreneur who established the
business 4 decades ago. The Company was incorporated in the National Capital Territory of
Delhi on December 2, 1994 as of the security mechanism Maytas, IJM, NCC and GVKPPL
and their respective affiliates were required to pledge 51% of their respective shareholding on
the current paid up capital of the GPL with PFC.Jegurupadu Operating & Maintenance
Company, a private company with unlimited liability, under the Companies Act, 1956. The
Company was converted from a company with unlimited liability to a company with limited
liability and consequently the name was changed to Jegurupadu Operating & Maintenance
Company Private Limited on April 20, 2005. Subsequently, the Company was converted
from a private limited company to a public limited company on May 19, 2005 and the name
was changed to Jegurupadu Operating & Maintenance Company Limited. Thereafter, the
name of the Company was changed to GVK Power & Infrastructure Limited on July13,
2005.
Present Scenario
In recent years the Promoters through the Promoter Group Companies have increasingly
focused on the power and infrastructure sector. Managing Director of GVKPIL, is a first
generation entrepreneur who established the business four decades ago. The Company has
tied up the entire financial assistance of Rs.10,150 million (constituting 70% of the project
cost of Rs 14,500 million) from various lenders, lead by Power Finance Corporation Limited
(PFC). The Company has initialed the draft Power Purchase Agreement with Punjab State
Electricity Board ('PSEB') in December 2006. GVK consolidates its Power, Airports And
Road Projects Under GVK Power & Infrastructure Limited in January 2007. During July of
the year 2007, GVK signed MoU with Tamil Nadu Industrial Development Corporation
(TIDCO) to set up multi-product SEZ in Perambalur. As at August of the year 2007,
Alakananda Hydro Power Company Ltd, a GVK group company has achieved financial
closure for its 330 MW Shrinagar Hydro Electric Project, being set up in Uttarakhand.
During February 2008, the Chhatrapati Shivaji International Airport (CSIA), Mumbai
International Airport Pvt Ltd (MIAL) today signed an agreement with SITA, the world's
leading provider of IT applications to airports. The GVK-BHP Billiton consortium has
emerged as provisional winners of seven deepwater exploration blocks off the west coast of
India during June of the year 2008.

GVKPIL has initiated power projects that will cross over 2000 MW capacity once
operational. While Jegurupadu Combined Cycle Power Plant is operational, several
ambitious power projects are under development.
PROFILE
Name : GVK Power
Address : GVK Industries Ltd.
Paigah House,
156-159, SP Road,
Secunderabad 500003,
AP, India.
Year of establishment : 1994
Chairman : Mr.G.V.krishna Reddy
Tel : +91-40-27902663/4
Fax : +91-40-27902665
E-Mail : info@gvk.com

7.10. INDOWIND ENERGY

The Company was incorporated as Indowind Energy Private Limited' on July 19, 1995. The
Company became a deemed public limited company on September 30, 1997 and was
converted into a public limited company on December 29, 2000.
Mr. K.V. Bala and Subuthi Finance Limited have promoted the Company with the main
object of developing wind farms on a large scale for commercial exploitation, generating
energy from Wind Mills, Wind Turbines and other Equipment and selling it to State Electric
Boards and Corporate clients.
The Company commenced its commercial operation of generating power on September, 1995
by setting up 225 KW Wind Electric Generator in Tamil Nadu. The Company has been
raising its generation capacity every year and the same has since been increased to 16.825
MW. The Company has altered its main object clause to include the activities of
manufacturing equipments of windmills under the purview of its business; a unit was set up
in Pondicherry through which the Company has provides total solution for installation,
operation and maintenance of windmills for third parties. Indowind, is an IPP in the
renewable energy field generating “Green Power ” through dedicated Wind farms & also
offers allied services in the Wind Energy sector with a mission to be a global player in wind
energy sector.
Indowind, with proven capabilities in setting up Wind farms, Operating & Maintaining them
with optimum machine availability, Green Power sale to Corporates & EB, for which we
have acquired through a decade on onsite experience possessing considerable domain and
technology knowledge to provide end-to-end solutions & services. Indowind has strong
capabilities and expertise in areas like project management, robust managerial & financial
resources and experience in the operations of wind farms. The Indowind O&M team consists
of dedicated staff for 24x7 monitoring of the Wind mills with capabilities for attending to
machinery breakdowns to keep them in shipshape. Strong credibility of the promoters, their
business orientation and approach including the corporate strategy provides the competitive
edge to be a significant global player.
Present Scenario
It currently supplies power to a state utility and a few companies in Karnataka. Tamil Nadu
Electricity Board (TNEB) is its major client.
The company has purchased WEGs from reputed suppliers like NEPC-MICON, VESTAS-
RRB, AMTL-Wind World and AWT to avoid dependence on single technology and single
manufacturer. The company has offer Green Power' to customers that include SEBs and
Corporates. Other than the above company has also into the business of providing Operations
and Maintenance services for windmills. Recently, the company has ventured into turnkey
projects for erection, installation and maintenance of windmills for corporate companies.
The company has worked continuously to strengthen infrastructure and enhance the presence
in this sector. The company has been selling the power generated to Tamil Nadu Electricity
Board (TNEB) and various private corporate clients in Karnataka such as Hindustan Coca
Cola Beverages Private Limited, Karnataka Distilleries Limited, United Breweries Limited,
H&R Johnson India Limited, Delphi Automotive Systems Private Limited and Spicer India
Limited. The electricity charges recovered for the corporate clients in Karnataka are more
than the revenue generated from the sale to SEBs. Since the wheeling charges under the new
policy are very exorbitant, the company has decided to sell the power generated from the
proposed 9 MW project to BESCOM (KPTCL) where the realization per unit is higher as
compared to sale to private corporate clients under the current guidelines.
Currently, Indowind Energy sells power to TNEB at Rs 2.70 per unit. It sells power to
corporate clients in Karnataka at Rs. 4.05 per unit (however, the company has to pay
wheeling charges at 10%).Is setting up a wind farm of 9-MW capacity in Karnataka at an
investment of Rs 49.7 crore. Intends to sell this project for an appropriate price. The project
division’s profit before tax (PBT) margin was 23.5% in the year ended March 2007 (FY
2007).

PROFILE:
Name : Indowind Energy
Address : Indowind Energy Ltd.
Kothari Buildings, 4th Floor,
114, M.G.Road,
Nungambakkam,
Chennai-600034,
Tamil Nadu, India.
Establishment : 1995
Chairman : Mr. K.V.Bala
Tel : +91 44 28331956 / 57 / 58 / 59
Fax : +91 44 28330208
E-Mail : contact@indowind.com
Main Buyer : Titan,Coca-Cola,Spicer,Axis Bank,TVS
Production Capacity : 17.915MW

CHAPTER 8
Analysis of power sector

8.1. RATIO ANALYSIS
Financial ratio analysis can reveal much about a company and its operations. However, there
are several points to keep in mind about ratios. First, a ratio is a "flag" indicating areas of
strength or weakness. One or even several ratios might be misleading, but when combined
with other knowledge of a company's management and economic circumstances, financial
analysis can tell much about a corporation. Second, there is no single correct value for a
ratio. The observation that the value of a particular ratio is too high, too low, or just right
depends on the perspective of the analyst and on the company's competitive strategy. Third,
financial ratios are meaningful only when compared with some standard, such as an industry
trend, ratio trend, a trend for the specific company being analyzed, or a stated management
objective.
8.1.1. Key Ratios
1. Debt-to-equity ratio:
A debt-to-equity ratio, which is the total debt of an entity divided by the total equity of that
entity, is a measure of the use of leverage or a measure of risk. Leverage is the use of other
people's money to make money. In its simplest form, it is borrowing money from someone at
a stated interest rate (such as 8%) and then investing that money in a project that earns a
greater return than this stated rate (such as a 12% return). Leverage results in great
profitability--when it works--because an entity is earning profits without having to invest any
of its own money to get that return. The greater an entity's debt-to equity ratio, the greater is
the use of other people's money to make money. The greater an entity's debt-to-equity ratio,
the greater is the opportunity for high returns for that entity. The debt-to-equity ratio is also a
measure of risk since the more debt that is used, the greater the risk that the entity might be
forced to liquidate and go out of business.
2. Long Term Debt-to-equity Ratio:
It is a capitalization ratio comparing long-term debt to shareholders' equity. Its a measure of a

company's financial leverage calculated by dividing its total liabilities by stockholders'
equity. It indicates what proportion of equity and debt the company is using to finance its

assets. Sometimes only interest-bearing, long-term debt is used instead of total liabilities in
the calculation. It is also known as the Personal Debt/Equity Ratio, this ratio can be applied
to personal financial statements as well as companies. A high debt/equity ratio generally
means that a company has been aggressive in financing its growth with debt. This can result
in volatile earnings as a result of the additional interest expense. The debt/equity ratio also
depends on the industry in which the company operates.
3. Current Ratio:
An indication of a company's ability to meet short-term debt obligations; the higher the ratio,
the more liquid the company is. Current ratio is equal to current assets divided by current
liabilities. If the current assets of a company are more than twice the current liabilities, then
that company is generally considered to have good short-term financial strength. If current
liabilities exceed current assets, then the company may have problems meeting its short-term
obligations.
8.1.2 Turnover Ratios:
1. Interest Cover Ratio:
It is a ratio used to determine how easily a company can pay interest on outstanding debt.
The interest coverage ratio is calculated by dividing a company's earnings before interest and
taxes (EBIT) of one period by the company's interest expenses of the same period. The lower
the ratio, the more the company is burdened by debt expense. When a company's interest
coverage ratio is 1.5 or lower, its ability to meet interest expenses may be questionable. An
interest coverage ratio below 1 indicates the company is not generating sufficient revenues to
satisfy interest expenses.
2. Fixed Asset Turnover:
A long-term, tangible asset is held for business use and not expected to be converted to cash
in the current or upcoming fiscal year, such as manufacturing equipment, real estate, and
furniture. A high fixed asset turnover is preferred since it indicates a better efficiency in fixed
assets utilization.

3. Inventory turnover:
It’s a ratio showing how many times a company's inventory is sold and replaced over a
period. This ratio measures the stock in relation to turnover in order to determine how often
the stock turns over in the business. It indicates the efficiency of the firm in selling its
product. It is calculated by dividing the cost of goods sold by the average inventory.
Inventory represents one of the most important assets that most businesses possess, because
the turnover of inventory represents one of the primary sources of revenue generation and
subsequent earnings for the company's shareholders/owners. Possessing a high amount of
inventory for long periods of time is not usually good for a business because of inventory
storage and obsolescence costs. However, possessing too little inventory isn't good either,
because the business runs the risk of losing out on potential sales and potential market share
as well. The days in the period can then be divided by the inventory turnover formula to
calculate the days it takes to sell the inventory on hand or "inventory turnover days".
4. Debtors Turnover Ratio:
Indicates the relation between net credit sales and average accounts receivables of the years.
It’s also known as debtors’ velocity. This ratio indicates the efficiency of the concern to
collect the amount due from debtors. It determines the efficiency with which the trade
debtors are managed. Higher the ratio, better it is as it proves that the debts are being
collected very quickly.
5. ROCE:
Return on Capital Employed (ROCE) is used in finance as a measure of the returns that a
company is realizing from its capital employed. It is commonly used as a measure for
comparing the performance between businesses and for assessing whether a business
generates enough returns to pay for its cost of capital.
6. RONW:
Return on Net Worth is the ratio of net income after taxes to total net worth at the end of the
year. This ratio indicates the return on stockholder's total equity. Also known as Return on

equity which measures a corporation's profitability by revealing how much profit a company
generates with the money shareholders have invested.
8.1.2. RATIO ANALYSIS OF INDUSTRY
Though the value of debt to equity ratio depends on overall financial situation, goals,
employment security, risk aversion, tax implications, etc., the value of debt to equity ratio* in
Indian power industry is 0.75 which shows that there is 75 paisa debt for every 1 rupee of
share holders’ funds which is not a very high value and firms are moderately strong to meet
the repayment requirements. According to Central Electricity Regulatory Commission this
debt equity ratio should be improved to 2.33 for the purpose of tariff determination for a
particular company in the power sector. The long term debt equity ratio (0.73) is nearly equal
to the debt- equity ratio which shows that the companies of this sector are able to fulfill its
long term repayment requirements as efficiently as other liabilities and the business is not at
high risk.
In case of current ratio the rule of thumb says that the current ratio should be at least 2, that is
the current assets should meet current liabilities at least twice. In power industry the current
ratio* of 1.59 shows that it is less than required value, thus it is seen that this industry should
increase current assets and should control the current liabilities. In the power industry the
value of inventory turnover ratio* of 14.2 can also be said in the form of 365/14.2 = 25.7
days. The ratio shows a relatively high stock turnover which would seem to suggest that the
business deals in the field which require fast moving of its product i.e. electricity. Generally,
the higher the firm’s total asset turnover, the more efficiently its assets have been utilised.
Always high fixed assets turnovers are preferred since they indicate a better efficiency in
fixed assets utilization.
In case of Indian power industry a very low value (0.47) of fixed asset turnover* shows that
the fixed assets of the industry have not been utilized efficiently. The value of interest cover
ratio* is 2.96 is very impressive in Indian power sector. It shows that the firms in the industry
are strong enough to pay the interest expenses timely. The value of Return on capital
employed (8.79) is not very good return but with the high value of interest cover ratio and
slightly lower value of debt to equity ratio in the industry the return on capital is in the
moderately good condition.

*(For aggregate data refer to table of comparative ratio analysis top/bottom 5 companies)
8.1.3. FIVE YEARS’ RATIO ANALYSIS OF THE INDIVIDUAL

COMPANIES IN INDIAN POWER SECTOR (2004-2008)
8.1.3.1. NTPC (National Thermal Power Corporation)
In NTPC the debt-equity ratio has not changed since 2004 as the values the change is
only 0.01 during 2004 to 2006 and the change is 0.07 during next two years. This shows the
lower level of financial leverage which is not a good sign for the company. However
company’s profitability determines the debt equity ratio yet the high profitability of the
company do not suggest such a lower value of debt equity ratio. It can be seen exactly same
trend in the long term debt to equity ratio of NTPC.
Current ratio of the company is showing U-shape trend during 2004 to 2008 and like
previous days company has again reached to good liquidity position. The fixed asset turnover
ratio has shown 50% growth in last 5 years but it is still low and company should maximise
its asset utilisation. A high debtor turnover ratio is showing the good debt collection ability of
company. Interest cover ratio of the company is continuously increasing showing that the
company is becoming stronger in the ability of meeting interest expenses.
Table.7: Ratio Analysis of NTPC (2004-08)
NTPC NTPC NTPC NTPC

YRC
200403 200503 200603 200803
Key Ratios
Debt-Equity Ratio 0.42 0.42 0.43 0.50
Long Term Debt-Equity Ratio 0.42 0.42 0.43 0.50
Current Ratio 2.39 1.65 1.86 2.23
Turnover Ratios
Fixed Assets 0.49 0.55 0.60 0.72
Inventory 10.75 12.84 12.92 14.21
Debtors 2.92 24.65 24.00 17.62
Interest Cover Ratio 2.46 4.47 4.69 6.33
PBIDTM (%) 54.72 43.06 42.66 38.38
ROCE (%) 17.24 14.14 15.11 15.72
RONW (%) 13.03 14.85 14.86 14.36
Source: Derived from data available on Capitalline.
Inventory turnover of the company is showing the increasing capability of selling the
product but at the same time it can be observed that company’s profitability is decreasing
(decreasing profit %) and this trend can be attributed to the fact that company is not using

debt efficiently to enhance the business. As it is known that shareholders’ expectations are
quite higher than the interest on debt. The return on capital employed and return on net worth
are good in NTPC but it is not increasing; we can see slight decrease in the return.
8.1.3.2. PGC (Power Grid Corporation)
In Power Grid Corp. the debt to equity ratio is higher than that of NTPC but it is still not
very good. The company can take advantage of financial leverage as its profitability is very
high. However the return on capital employed and return on net worth are not good as
compared to NTPC. The decreasing current ratio during the last 5 years is showing increasing
current liabilities of the company which in turn has lowered company’s liquidity.
Table.8: Ratio Analysis of Power Grid Corp. (2004-08)
Power Grid Power Grid Power Grid Power Grid

YRC Corpn Corpn Corpn Corpn
200403 200503 200603 200803
Key Ratios
Current Ratio 1.28 0.81 0.57 0.59
Turnover Ratios
Fixed Assets 0.12 0.12 0.13 0.14
Inventory 12.66 13.19 17.26 21.35
Debtors 2.12 5.37 8.10 5.80
PBIDTM (%) 102.15 94.16 90.95 91.41
ROCE (%) 8.55 8.01 8.95 9.82
RONW (%) 9.23 8.99 10.65 12.99
In Power Grid we can observe very low fixed asset turnover ratio which tells the under
utilisation of company’s fixed assets. The increasing Interest cover ratio is showing
company’s increasing capability of paying the interest which is a good sign for company’s
future financing ability in the financial market. A high debtor turnover ratio is showing the
good debt collection ability of company.
8.1.3.3. Reliance Infra

After increasing continuously the debt equity ratio of Reliance Infra has slipped between
2006 and 2008 and it is also very low, thus it suggests that with the two digit rate of return on
net worth company can think to raise the finance (if it is possible at low cost of capital) so
that by starting new projects profitability can be improved. Current ratio is satisfactory for
the company and it has good ability to meet current liabilities.
Table.9: Ratio Analysis of Reliance Infra (2004-08)
Reliance Reliance Reliance Reliance

YRC Infra Infra Infra Infra
200403 200503 200603 200803
Key Ratios
Current Ratio 1.47 2.23 2.64 2.41
Turnover Ratios
Fixed Assets 0.93 0.96 0.87 1.12
Inventory 38.82 18.16 11.91 20.75
Debtors 6.75 5.94 3.91 4.80
PBIDTM (%) 22.96 23.92 33.42 27.36
ROCE (%) 10.13 8.52 9.68 9.80
RONW (%) 10.61 9.98 10.79 11.48
The fixed asset turnover has increased slightly but company should still do efforts to
increase the utilisation of its fixed assets. Inventory turnover is lower now as compared to
2004; however it is not very low as electricity is fast selling product. Interest cover ratio and
debtor turnover ratio are going down which is not good sign for the company and it is
showing company’s falling ability to meet the interest expenses and collecting the receivables
from debtors. The profitability is satisfactory which can be seen in PBIDTM and RONW of
the company.
8.1.3.4. TATA Power
The profitability of TATA Power is going down which can be seen by PBIDTM%, ROCE
and RONW. However the debt to equity ratio of the company is very low but with the
decreasing rate of return it cannot think for debt to increase the ratio. Inventory turnover ratio
and the debtor turnover ratio have not changed significantly and they are showing stability of
the firm.

The decreasing current ratio is not a good signal for suppliers and creditors of the
company, but at the same time company’s lenders can see the positive thing in the form of
increasing interest cover ratio. The return of the company is not very high but with the sales
turnover ratio size, company comes into top 5 companies of power sector in India.
Table.10: Ratio Analysis of TATA Power (2004-08)
Tata Power Tata Power Tata Power

Tata Power Co.
YRC Co. Co. Co.
200503
200403 200603 200803
Key Ratios
Current Ratio 1.52 1.66 2.00 1.81
Turnover Ratios
Fixed Assets 0.78 0.72 0.80 0.93
Inventory 13.15 12.90 12.36 13.65
Debtors 5.27 5.56 5.21 4.11
PBIDTM (%) 31.90 27.50 22.10 18.28
ROCE (%) 14.70 9.81 8.99 7.67
RONW (%) 10.78 7.37 8.70 8.12
The fixed assets of the company are not being utilised efficiently so there is scope for the
company for enjoying the operational leverage and the profitability can be improved.
8.1.3.5. Torrent Power
Company’s cost of capital seems to be high due its low debt to equity ratio as we know
that the shareholders’ expectations are always high as compared to the interest on debt.
However the debt to equity ratio of the company is very low but with the decreasing rate of
return in last two years it cannot think for debt to increase the ratio.
Table.11: Ratio Analysis of Torrent Power (2004-08)
Torrent Pow. Torrent Pow. Torrent Torrent

YRC Power Power
200403 200503 200609 200803
Key Ratios

Current Ratio 0.70 0.69 0.86 0.76
Turnover Ratios
Fixed Assets 0.74 0.71 1.82 1.09
Inventory 19.41 21.64 54.38 22.78
Debtors 5.05 5.25 14.87 9.61
PBIDTM (%) 15.67 22.47 18.60 16.10
ROCE (%) 10.67 19.46 15.87 8.39
RONW (%) 7.99 16.15 9.08 7.55
Company’s current ratio is also very low showing its lower capability to meet current
liabilities. Long term debt to equity ratio is also very low. At the same time company is not
utilising its fixed assets efficiently which can be seen in the form of its fixed asset turnover
ratio.High inventory turnover ratio and debtor turnover ratio are sufficient to justify
company’s position on the top 5 companies of the industry. Profitability of the company is
satisfactory but it is not showing a satisfactory growth during last five years except in the
year 2005.
8.1.3.6. Indowind Energy
Indowind Energy has been able to increase its profitability during last 5 years but this
company comes in bottom 5 companies due to its sales turnover size. Company is
continuously increasing the value of debt to equity ratio by increasing the debts and enjoying
the financial leverage but its value is still very low which shows the future scope of
increasing the debt. But company presently is not in a condition of increasing the debt
because of its lower rate of return on capital employed.
Table.12: Ratio Analysis of Indowind Energy (2004-08)
Indowind Indowind Indowind Indowind

YRC Energy Energy Energy Energy
200406 200506 200606 200806
Key Ratios
Current Ratio 1.99 3.11 8.27 5.46
Turnover Ratios
Fixed Assets 2.63 0.93 1.08 0.47

Inventory 0.00 4.55 3.49 1.31
Debtors 15.06 7.84 4.54 2.06
PBIDTM (%) 14.96 51.37 46.89 49.39
ROCE (%) 11.47 17.79 17.20 6.34
RONW (%) 11.59 12.60 12.05 4.30
Current ratio of the company has been increasing sufficiently which is a good indication
for the suppliers and creditors. Inventory turnover ratio and debtor turnover ratio are not
showing positive trend and it is not good for the financial health of the company. Interest
cover ratio of the company has grown slightly showing satisfactory condition to the lenders
of the company. However the profit % has been increasing but company is not able to retain
the earnings as we can see it in the form of decreasing ROCE and RONW.
8.1.3.7. Energy Develop Co.
Debt to equity ratio of the company is going continuously down even after the increase in
the return and profitability (except 2008). Thus the company should improve the balance of
the capital structure and should enjoy the financial leverage. Exactly same trend can be seen
in the long term debt to equity ratio of the company between 2004 and 2008. Sharply falling
current ratio is a worrying situation of the company showing its inability to meet the current
liabilities. It’s a negative signal for the supplier and creditors.
Table.13: Ratio Analysis of Energy Develop Co. (2004-08)
Energy Energy Energy Energy

YRC Devlop.Co Devlop.Co Devlop.Co Devlop.Co
200403 200503 200603 200803
Key Ratios
Current Ratio 18.50 27.62 2.55 1.10
Turnover Ratios
Fixed Assets 0.16 0.19 0.28 1.23
Inventory 9.92 12.41 20.12 109.57
Debtors 9.59 3.74 2.24 5.56
PBIDTM (%) 80.25 88.24 90.60 36.78
ROCE (%) 9.67 13.42 14.88 26.72
RONW (%) 4.68 14.60 17.97 20.39

Looking at fixed asset turnover ratio we can say that the company has increased the
utilization of fixed assets due to which it has become able to increase the rate of return
(ROCE and RONW). In 2008 company’s profit % has gone down significantly but returns
has been increased and inventory turnover has boosted which shows the firm’s ability to sell
effectively and retain the earnings.
8.1.3.8. GVK Power Infra
With the financial ratios it can be seen that however company’s profit% has grown
significantly yet company is not able to retain the earnings and the capital structure’s balance
is becoming worse. Debt equity ratio is going down which is showing the high cost of capital
in the form of equity. Return on capital employed and return on net worth are still low.
Table.14: Ratio Analysis of GVK Power Infra (2004-08)
GVK Power GVK Power

GVK Power Infra
YRC Infra Infra
200803
200503 200603
Key Ratios
Debt-Equity Ratio 9.37 0.20 0.16
Long Term Debt-Equity Ratio 9.12 0.20 0.00
Current Ratio 1.61 7.68 1.68
Turnover Ratios
Fixed Assets 162.67 257.11 131.56
Inventory 0.00 0.00 0.00
Debtors 9.57 16.18 7.73
Interest Cover Ratio 4.63 2.21 16.04
PBIDTM (%) 55.60 163.79 386.10
ROCE (%) 8.73 7.55 8.36
RONW (%) 39.38 3.88 8.78
Current ratio is also not satisfactory except in (2006). Debtor turnover ratio is good but
inventory turnover is creating doubt about company’s progress. Fixed assets of the company
are being utilized efficiently but during last two years fixed asset turnover ratio is showing
downward trend which is probably be due to enhancement of the asset side of the balance
sheet. The only positive signal is for the lenders in the form of higher interest cover ratio.

8.1.3.9. Jaiprakash Hydro
Looking at the good profit % and good rate of return (RONW and ROCE) we can say that
company should take advantage of financial leverage and should improve its capital structure
balance in the form of debt and equity. As the company’s debt to equity ratio is going down it
can be said that the overall cost of capital is increasing in the form of dividends and other
expectations of shareholders. Company’s inventory turnover is showing exceptional
movement downward in the year 2005.
Table.15: Ratio Analysis of Jaiprakash Hydro (2004-08)
Jaiprakash Jaiprakash Jaiprakash Jaiprakash

YRC Hydro Hydro Hydro Hydro
200403 200503 200603 200803
Key Ratios
Current Ratio 0.91 0.93 0.97 1.91
Turnover Ratios
Fixed Assets 0.36 0.19 0.17 0.18
Inventory 2,857.33 214.03 59.82 53.78
Debtors 6.01 2.42 1.68 1.31
PBIDTM (%) 88.46 87.33 83.54 103.17
ROCE (%) 12.50 11.38 11.14 13.91
RONW (%) 11.48 9.23 12.49 15.80
Interest cover ratio has grown and reached to a satisfactory level providing good signal to
the lenders. Fixed assets of the company are under utilized as the fixed asset turnover ratio is
very low. Debtors turnover ratio is coming down which is an alarming situation for the
company to recover the debts given outside. Profit is however showing rosy picture but
return is not growing in accordance with it which shows company’s lesser ability to retain the
earnings.
8.1.3.10. KSK Energy
The ratio analysis of the company showing that company is facing a very tough time now
and not a single indicator is providing satisfactory picture of the financial health of the

company. Debt equity ratio is going down because return on investment is going down and
also the profit 5 is going down. Long term debt to equity ratio is also showing similar trend
to the debt to equity ratio. Significant downward movement of the current ratio is showing
company’s decreasing ability to meet current liabilities. Even after efficiently utilizing the
fixed assets company is not able to increase the earnings which can be seen in the form of
higher fixed asset turnover ratio and very low return on net worth (RONW).
Table.16: Ratio Analysis of KSK Energy (2004-08)
KSK Energy KSK Energy

YRC
200603 200803
Key Ratios
Debt-Equity Ratio 0.83 0.49
Long Term Debt-Equity Ratio 0.80 0.33
Current Ratio 3.78 1.45
Turnover Ratios
Fixed Assets 7.75 11.65
Inventory 0.00 0.00
Debtors 0.00 0.00
Interest Cover Ratio 6.08 1.58
PBIDTM (%) 148.22 98.62
ROCE (%) 14.98 7.86
RONW (%) 18.47 3.31
In such a condition cannot go for debt also. Rather than using financial leverage and
operational leverage company should improve debtor turnover ratio and inventory turnover
ratio. So the financial health of the company can be improved. Also we can see that no lender
will allow debt to this firm easily because the interest cover ratio has come down
significantly.
8.1.4. Comparative Ratio Analysis of top 5 companies
The debt to equity ratio in the industry is 0.75 which is a moderately good value and can be
taken as a base to analyze different companies within the industry. As in case of NTPC
(0.50), Reliance Infra (0.58) and TATA Power (0.47) the value of debt to equity ratio is low,
showing a very low risk of business and an opportunity of financial leverage. In Torrent
Power the value comes at 0.86 which is slightly high than industry showing medium level of
risk but not a worrying situation. The only thing to be considered is that this excess equity is

assumed as an interest bearing debt by Central Electricity Regulatory Commission, thus
bringing down the effective ROE. In case of Power Grid Corp the value is more than double
the industry average which shows a higher value of debt to equity ratio. Central Electricity
Regulatory Commission (CERC) requires the debt-equity ratio of 2.33 for the purpose of
tariff determination, whereas the current debt-equity ratio of Power Grid is 1.69 which should
be improved.
Table.17: Comparative Ratio Analysis (Top 5 Companies)

NTPC Power Grid Corpn Reliance Infra Tata Power Co. Torrent Power
YRC Aggregate
200803 200803 200803 200803 200803
Key Ratios:
Debt-Equity Ratio 0.75 0.50 1.69 0.58 0.47 0.86
Long Term Debt-Equity Ratio 0.73 0.50 1.62 0.51 0.43 0.85
Current Ratio 1.59 2.23 0.59 2.41 1.81 0.76
Turnover Ratios:
Fixed Assets 0.47 0.72 0.14 1.12 0.93 1.09
Inventory 14.20 14.21 21.35 20.75 13.65 22.78
Debtors 4.65 17.62 5.80 4.80 4.11 9.61
Interest Cover Ratio 2.96 6.33 2.43 4.73 4.57 7.30
PBIDTM (%) 35.38 38.38 91.41 27.36 18.28 16.10
ROCE (%) 8.79 15.72 9.82 9.80 7.67 8.39
RONW (%) 9.07 14.36 12.99 11.48 8.12 7.55
We can also see the similar values of long term debt to equity ratio and overall debt to equity
ratio for each of the top five companies, which show that in NTPC (0.50), Reliance Infra
(0.51) and TATA Power (0.43) the value of long term debt to equity ratio is low, showing a
lower level of financial leverage. In Torrent Power the value comes at 0.86 which is slightly
high than industry showing medium level of financial leverage. In case of Power Grid Corp.
the value is more than double the industry average which shows a higher level of firm’s
financial leverage. The policy of Power Grid Corp. can be beneficial to the shareholders in
long run but at the same time it enhances the risk involved in the business.
In case of current ratio the current assets should meet current liabilities at least twice. In
NTPC (2.23) and Reliance Infra (2.41) we can see the favorable value of current ratio which

shows that both the firms are strong enough to meet their current liabilities but in TATA
Power (1.81) current ratio is moderately low. In case of Power Grid (0.59) and Torrent
Power (0.76) the value of current ratio is very low showing that the firms are not able to
handle the current liabilities efficiently.
Looking at the values of fixed asset turnover we see that Reliance Infra (1.12), Torrent Power
(1.09) and TATA Power (0.93) have higher value of fixed asset turnover comparative to the
industry which shows the optimality of utilization of fixed asset of these companies, in NTPC
(0.72) the value is still higher than industry but not impressive. The value of fixed asset
turnover is exceptionally low in case of Power Grid Corporation (0.14) which is the
indication of improper utilization of company’s fixed assets. Power Grid, Reliance Infra and
Torrent Power have high value of inventory turnover ratio which shows their high efficiency
of selling, while NTPC and TATA Power have inventory turnover values nearly equal to the
industry average (≈14.2) which is also good indication in selling efficiency.
A high interest cover ratio of companies shows higher ability to meet interest expenses.
However the interest cover ratio is high in all the 5 companies, the value of this ratio in
NTPC (6.33) and Torrent Power (7.30) is exceptionally high showing the strong ability of
companies to meet interest expenses. The debtors turnover ratio is high in all the companies
and it is exceptionally high in NTPC (17.62) which shows that debts are collected very
quickly. NTPC is leading the industry because return on capital employed ROCE (15.72) and
return on net worth RONW (14.36) are also very high in case of NTPC. Power Grid Corp
and Reliance Infra are also showing satisfactory value of these parameters while TATA
Power and Torrent Power are showing moderately low returns as compared to industry
average. PBIDTM % is highest in case of Power Grid Corp (91.41%) and the second
position is held by NTPC with 38.38% whereas Torrent power is showing lowest return
(16.1%) among all the 5 companies.
8.1.5. Comparative Ratio Analysis of Bottom 5 Companies
In the bottom 5 companies we can see that Indowind Energy and Jaiprakash Hydro has the
debt equity ratio slightly higher than the industry average which shows that the debt is not
high; however it depends on many factors like the interest rate, profitability etc. yet it is in

the easily acceptable range. GVK Power Infra and KSK Energy has very low debt equity
ratio which shows that these companies have opportunity to increase the debt to maximize
the profit without affecting the debt equity ratio adversely. In case of long term debt-equity
ratio we can observe that Indowind Energy and Jaiprakash Hydro have its value near to the
industry standards while KSK has comparatively very low value of it. Thus we can see here
the lack of financial leverage in the bottom companies of power sector.
Among the bottom five companies current ratio is highest in case of Indowind Energy (5.46)
showing its strong capability to meet current liabilities quickly. As the industry average
(1.59) in case of current ratio is not strong enough, we can observe that Jaiprakash Hydro has
the value near 2 which is favorable but others still need to increase the current ratio
especially Energy Develop Co and KSK Energy. An interesting comparison can be seen in
the fixed asset turnover ratio of the bottom 5 companies. It can be clearly seen that the
industry average is 0.47, Indowind Energy is equal to it, Energy Develop co is higher and
Jaiprakash Hydro is lower than the industry average while KSK (11.65) and GVK Power
Infra (131.56) have exceptionally high ratio which shows highest utilization of assets in GVK
Power Infra among all bottom five companies. The inventory turnover ratio is very low in
Indowind Energy, GVK Power Infra and KSK Energy while it’s favorably high in Jaiprakash
Hydro (53.78) as compared to the Industry average on the other hand it’s exceptionally high
in Energy Develop Co (109.57) which shows its very high capability to replace or sell the
inventory.
Table.18: Comparative Ratio Analysis (Bottom 5 Companies)
Indowind Energy GVK Power Jaiprakash KSK

Aggrega
YRC Energy Devlop.Co Infra Hydro Energy
te
200806 200803 200803 200803 200803
Key Ratios
Debt-Equity Ratio 0.75 0.78 0.00 0.16 1.02 0.49
Long Term Debt-Equity
0.73 0.69 0.00 0.00 0.88 0.33
Ratio
Current Ratio 1.59 5.46 1.10 1.68 1.91 1.45
Turnover Ratios
Fixed Assets 0.47 0.47 1.23 131.56 0.18 11.65
Inventory 14.20 1.31 109.57 0.00 53.78 0.00
Debtors 4.65 2.06 5.56 7.73 1.31 0.00
Interest Cover Ratio 2.96 3.76 49.84 16.04 2.73 1.58

PBIDTM (%) 35.38 49.39 36.78 386.10 103.17 98.62
ROCE (%) 8.79 6.34 26.72 8.36 13.91 7.86
RONW (%) 9.07 4.30 20.39 8.78 15.80 3.31
Looking to the interest cover ratio we see that all the bottom 5 companies which were taken
for the study have the value of it greater than 1.5 so the performance of none of these is
questionable in terms of interest cover but we can see a big difference among all these. KSK
Energy has marginally acceptable value (1.58), Jaiprakash Hydro and Indowind Energy are
near to the industry average i.e. appreciable value. GVK Power Infra (16.04) and Energy
Develop Co (49.84) have very high values which show their very high capability of the
interest coverage. Looking to debtors turnover ratio we observe that the industry average is at
4.65, Indowind Energy, Jaiprakash Hydro and KSK Energy are not good in collecting the
debt as they have very low values while the performance of Energy Develop Co and GVK
Power Infra is very good in this field which have high value of debtors turnover ratio.
Return on capital employed is highest in Energy Develop Co (26.72%) showing a good

opportunity for the stakeholders and shareholders. Jaiprakash Hydro (13.91%) is also
showing good return on the capital employed. Indowind Energy and KSK Energy have lower
return than industry average while GVK Power Infra is reaching very close to the industry
average in the ROCE. A nearly similar variation can be seen in the return on net worth
RONW.
However the profitability is good in each of these companies as compared to the industry
average of PBIDTM% yet Energy Develop. Co is showing least profitability while GVK
Power Infra (386.10), Jaiprakash Hydro (103.17) and KSK Energy (98.62) are showing very
high PBIDTM% or a very high profitability.
Thus it is seen that every industry has different kind of strength and weakness in the power
sector. This analysis is done taking into account one parameter at a time; a complexity of
analysis is obvious when we take more than one parameters at a time.

8.2. REGRESSION ANALYSIS
8.2.1.1. Definition:
Regression analysis is a Statistical Forecasting model that is concerned with describing and
evaluating the relationship between a given variable (usually called the dependent variable)
and one or more other variables (usually known as the independent variables).
Regression analysis refers to techniques for the modelling and analysis of numerical data
consisting of values of a dependent variable (also called response variable or measurement)
and of one or more independent variables (also known as explanatory variables or
predictors). The dependent variable in the regression equation is modelled as a function of
the independent variables, corresponding parameters ("constants").
Regression Analysis can predict the outcome of a given key business indicator (dependent
variable) based on the interactions of other related business drivers (explanatory variables or
independent variables). For example one can predict sales volume based on the amount spent

on advertising and the number of sales people one employs. Of course, a real model would
need more variables and is much more complex.
Regression analysis employs algebraic formulas to estimate the value of a continuous random
variable, called a dependent variable, using the value of another, independent, variable.
Statistical methods are used to determine the most correct estimate of that dependent
variable, and whether the estimate is valid at all.
The goal of regression analysis is to determine the values of parameters for a function that
cause the function to best fit a set of data observations that is provided. In linear regression,
the function is a linear (straight-line) equation.
8.2.1.2. Applications:
Regressions may be used for a wide variety of purposes where estimation is important. For
example, a marketer may employ a regression to determine how sales of products might be
affected by investments in advertising. An employer may perform a similar analysis to
estimate an employee's job evaluation scores based on the employee's performance on an
aptitude test.
Statistical technique used to establish the relationship of a dependent variable, such as the
sales of a company, and one or more independent variables, such as family formations, Gross
Domestic Product, per capita income, and other economic indicators .Bring exactly how large
and significant each independent variable has historically been in its relation to the dependent
variable, the future value of the dependent variable can be predicted. Essentially, regression
analysis attempts to measure the degree of correlation between the dependent and
independent variables, thereby establishing the latter's predictive value.

8.2.1.3. Variants Chosen:
Here in case of Power sector Sales is taken as Dependent variable, Transmission and
Distribution, Consumption of Electricity and Production of Electricity are taken as
Independent variables. Sales are predicted by using these independent variables. It is found
out that how the values of independent variables affect the value of dependent variable
(Sales).
8.2.1.4. Hypothesis:
H0: The null Hypothesis is that Transmission& Distribution, Consumption and Production
do not have any significant effect on the sales of the company.
H1: The alternate Hypothesis is that Transmission & Distribution, Consumption and
Production have significant effect on the sales of company.
8.2.1.5. Interpretation:
I. Energy Developement:
In case of Energy Development R square and Adjusted R square values are 0.998 and 0.993,
Significance value is 0.052 which is > 0.050, therefore, Null Hypothesis is accepted.
Regression Equation : Sales = 290.655+0.007(TnD)+0.288(consumptn)+0.240(Prodn)
II. GVK Power:
In case of GVK Power R square and Adjusted R square values are 0.989 and 0.956,
Significance value is 0.056 which is > 0.050, therefore, Null Hypothesis is accepted.
Regression Equation: Sales = 21.811-0.003(TnD)-0.197(consumptn)+0.257(Prodn)

III. Indowind Energy:
In case of Indowind Energy R square and Adjusted R square values are 0.591 and 0.635,
Significance value is 0.042 which is < 0.050, therefore, Null Hypothesis is Rejected.
Regression Equation: Sales = 121.619+0.014(TnD)+0.214(consumptn)-0.454(Prodn)
IV. JP Hydro:
In case of JP Hydro R square and Adjusted R square values are 0.912 and 0.647, Significance
value is 0.039 which is < 0.050, therefore, Null Hypothesis is Rejected.
V. KSK Energy:
In case of KSK Energy R square and Adjusted R square values are 0.997 and 0.990,
Significance value is 0.067 which is > 0.050, therefore, Null Hypothesis is Accepted.
Regression Equation: Sales = 87.629+0.002(TnD)-0.318(consumptn)+0.489(Prodn)
VI. NTPC:
In case of NTPC, R square and Adjusted R square values are 0.991 and 0.998,

VII. Power Grid:
In case of Power Grid R square and Adjusted R square values are 0.991 and 0.965,
Regression Equation: Sales = 5886.594-0.512(TnD)+14.895(consumptn)+32.493(Prodn)
VIII. Reliance Infrastructure:
In case of Reliance Infrastructure R square and Adjusted R square values are 0.983 & 0.933,
Regression Equation: Sales= 8055.025+0.068(TnD)+5.052(consumptn)+16.748(Prodn)
IX. Tata Power:
In case of Tata Power R square and Adjusted R square values are 0.935 and 0.739,
X. Torrent:
In case of Torrent R square and Adjusted R square values are 0.826 and 0.306,

8.3. TREND ANALYSIS
The term "trend analysis" refers to the concept of collecting information and attempting to
spot a pattern, or trend, in the information. In some fields of study, the term "trend analysis"
has more formally-defined meanings.
In project management trend analysis is a mathematical technique that uses historical results
to predict future outcome. This is achieved by tracking variances in cost and schedule
performance. In this context, it is a project management quality control tool.
The trend analysis of the Industry (power generation) is done here in two methods,
 Exponential Trend Analysis

 Moving Average Method
The factor considered by us for the Trend analysis is the power generation over the period of
years.
India's power generation has grown with nominal rate at 0.65% in December 2008 compared
with 3.90% increased in December 2007. Thermal, hydro and nuclear are three major source
of power generation. Thermal power generation recorded positive growth at 3.25% in
December 2008 however hydro and nuclear were recorded negative growth rate at 12.41%
and 21.62% respectively in December 2008 compared with December 2007.
In April-December 2008 power generation were recorded 2.57% growth compared with
April-December 2007.
There has been significant improvement in the growth in actual generation over the last few
years. As compared to annual growth rate of about 3.1% at the end of 9th Plan and initial
years of 10th Plan, the growth in generation during 2006-07 and 2007-08 was of the order of
7.3% and 6.33% respectively.

The electricity generation target for the year 2008-09 has been fixed at 744.344 BU
comprising of 631.270 BU thermal; 118.450 BU hydro; 19.000 BU nuclear; and 5.624 BU
import from Bhutan.
Table. 19: Trend in Power Generation in India
Power Generation in India in billion KWH in billion KWH
Gross Energy Trend Analysis (Exponential) Trend Analysis (Moving

Year
Generated (A) {F1=F0+0.2*(A0-F0)} Average Method)
1980 – 81 129.2 129.2 129.20

1981 – 82 131.1 129.2 131.10
1982 – 83 140.3 129.58 140.30
1983 – 84 151 131.72 133.53
1984 – 85 169.1 135.58 140.80
1985 – 86 183.4 142.28 153.47
1986 – 87 201.3 150.51 167.83
1987 – 88 219 160.67 184.60
1988 – 89 241.3 172.33 201.23
1989 – 90 268.4 186.13 220.53
1990 – 91 289.4 202.58 242.90
1991 – 92 315.6 219.94 266.37
1992 – 93 332.7 239.08 291.13
1993 – 94 356.3 257.8 312.57
1994 – 95 385.5 277.5 334.87
1995 – 96 418.1 299.1 358.17
1996 – 97 436.7 322.9 386.63
1997 – 98 465.8 345.66 413.43
1998 – 99 496.9 369.69 440.20
1999 – 00 532.2 395.13 466.47
2000 – 01 554.5 422.54 498.30
2001 – 02 579.1 448.94 527.87
2002 – 03 596.5 474.97 555.27
2003 – 04 633.3 499.27 576.70
2004 – 05 665.8 526.08 602.97
2005 – 06 672.4 554.02 631.87
2006 – 07 697.4 577.7 657.17
2007 – 08 704.47 601.64 678.53
2008 – 09 744.34 622.21 691.42
2009 – 10 projected 646.63 715.40

Source: Derived from the data collected economy survey of Indian power and then
formulated.
8.3.1. Output
Fig.7: Output of Trend Analysis – Exponential method (1980 – 2009)
Source: Derived from the table 19
Interpretation:
The output (Fig.7) shows that there has been gradual and continuous growth in power
generation in India, the trend analysis using exponential method also shows the similar curve
in growth, showing the projected power generation for the year 2008-09 in the growing
pattern.

Fig.8: Output of Trend Analysis – Moving Average method (1980 – 2009)
Source: Derived from the table 19
Interpretation:
The output (Fig.8) shows that there has been gradual and continuous growth in power
generation in India, the trend analysis using moving average method also shows the similar
curve in growth, showing the projected power generation for the year 2008-09 in the growing
pattern.

8.4. JUDGEMENTAL ANALYSIS
Power is one of the prime movers of economic development. The basic responsibility of
power supply industry is to provide adequate electricity at economic cost, while ensuring
reliability and quality of supply. Significant impetus by successive Governments has resulted
in increase in capacity from 1,300 MW during independence to more than 100,000 MW
today. Along with the growth in installed generation capacity, there has also been a
phenomenal increase in the transmission and distribution capacity. However, despite the
significant progress in capacity addition, the demand for electricity continues to outstrip
supply with the result that energy and peaking shortages continue to plaque the economy. The
per capita consumption is among the lowest in the World at 408 kwh/year (as on 2001).
With reforms in this sector gaining pace, many structural changes are taking place both at the
policy and technical levels. With the passing of the Electricity Act 2003, generation,
transmission and distribution sectors have been thrown open to competition along with the
ushering in of a de-regulated regime. The Government proposes to enhance public funding
for the sector as well as encourage the public sector undertakings to take up projects in joint
ventures with private investors and state governments in the 10th and 11th Plan period. There is
also a focus on initiating suitable policy measures to accelerate the pace of hydro power
development as well as to make nuclear power generation as competitive as power generation
from other fuels.
With responsibility for electricity supply shared constitutionally between the central
government and the states, the Government of India has placed increased emphasis on
improving the efficiency of supply, consumption, and pricing of electricity. Significant
reforms are being undertaken in power sector management and financing at the state level.
The Government of India, with World Bank assistance, has been encouraging the states to
undertake in depth power sector reforms. This involves distancing the state government from
operation of the power sector, establishing an independent regulatory framework for the

sector, progressively reducing subsidies and restoring the creditworthiness of the utilities
through financial restructuring and cost-recovery based tariffs, and divesting existing
distribution assets to private operators.
The Indian power sector is undergoing a crucial phase of transition. Both the Central and
State governments are actively engaged in finding viable solutions to achieve sustainable
development of the power sector. As of now, regulation, rapid capacity addition, and reforms,
with a specific focus on improving revenues from the distribution segment, are emerging as
important areas of reforms in the sector.
8.5. EXPERTS’ OPINION
An expert’s opinion or professional witness is a witness, who by virtue of education, training,

skill, or experience, is believed to have knowledge in a particular subject beyond that of the
average person, sufficient that others may officially (and legally) rely upon the witness's
specialized (scientific, technical or other) opinion about an evidence or fact issue within the
scope of their expertise, referred to as the expert opinion, as an assistance to the fact-finder.
Expert witnesses may also deliver expert evidence about facts from the domain of their
expertise.
The expert-opinion on various issues is discussed in the context of the present energy
shortage faced by the State. The experts participated in the Delphi survey unanimously
stressed on the urgent need for an integrated approach in the power sector planning process
of the State. They also emphasised on the imperativeness for exploiting the demand side
management potential of the State to alleviate energy crisis in future. The study fetched
informative and revealing results, which may aid to formulate and review future planning
strategies for the expansion of power sector of the State.
“India’s power sector needs investment to the tune of $ 120-160 billion to implement
structural reforms in the vital field”, says Power Minister Mr. Suresh Prabhu.

“We need more players and there is a need to generate investors’ interest,” the minister said,
stressing that private investment was possible in generation, transmission and distribution of
electricity in India. Mr Prabhu said the government plans to provide electricity to all
households by 2012.
Power Grid has bright future ahead: Experts
The future scenario of Power Sector in India is very good as many Indian MNCs are
venturing into Power Sector.
There will be a lot of private players including the Ambanis and Tata.But there is a lot of
scacity. Once the private players enter the fray, electricity will be available in plenty, but the
price would be around Rs.10 a unit. Many in the power sector believe that reforms are
necessary. "They are crucial to improving the State's financial health," a senior Government
official said.
The Managing Director of Bangalore Electricity Supply Company Ltd., Bharat Lal Meena,
agreed with the views of the official. "Reforms are the need of the hour. If we are to be made
more efficient in our functioning, we need to reform. Besides, that is the policy that we have
adopted. It cannot be changed now," he added.
Going by the activism shown by the government in 2001, the future raises hopes of a much
stronger power infrastructure in the country. The government has set an objective of
providing ‘Power for All’ by 2012. But funds are also required to back up the political will.
The government will require an investment of $200 billion to achieve its goal set in the 11th
Five-Year Plan for the power sector. This view has been echoed by industry experts as well as
government authorities closely associated with this sector.
"Of course, the development of the power sector will not be possible without private sector
participation," says Jayant Kawale, Joint Secretary, Ministry of Power. “India requires $500
billion in infrastructure, but the major share lies in power which is $200 billion, and it is the
least progressing sector compared to others. To overcome this crisis we have to add 50,000
mw every year, but this will happen only after the deficit is removed," says Lalit Jalan,
Director, Reliance Energy Ltd.

8.6. PORTER’S FIVE FORCE MODEL:

The model of pure competition implies that risk-adjusted rates of return should be constant
across firms and industries. However, numerous economic studies have affirmed that
different industries can sustain different levels of profitability; part of this difference is
explained by industry structure.
Porter’s model is based on the insight that a corporate strategy should meet the opportunities
and threats in the organizations external environment. Especially, competitive strategy should
base on and understanding of industry structures and the way they change.
Fig.9: Diagram of Porter’s Five Forces.
Source: http://faculty.css.edu/dswenson/web/525ARTIC/porter5forces.html
Porter has identified five competitive forces that shape every industry and every market.
These forces determine the intensity of competition and hence the profitability and

attractiveness of an industry. The objective of corporate strategy should be to modify these
competitive forces in a way that improves the position of the organization. Porter’s model
supports analysis of the driving forces in an industry. Based on the information derived from
the Five Forces Analysis, management can decide how to influence or to exploit particular
characteristics of their industry.
8.6.1. Main Aspects of Porter’s Five Forces Analysis

The original competitive forces model, as proposed by Porter, identified five forces which
would impact on an organization’s behaviour in a competitive market. These include the
following:
 The rivalry between existing sellers in the market.
 The power exerted by the customers in the market.
 The impact of the suppliers on the sellers.
 The potential threat of new sellers entering the market.
 The threat of substitute products becoming available in the market.
Understanding the nature of each of these forces gives organizations the necessary insights to
enable them to formulate the appropriate strategies to be successful in their market
8.6.2. PORTER’S FIVE FORCES ANALYSIS - POWER SECTOR IN INDIA
Table.20: FIVE FORCES ANALYSIS
Many projects have been planned but due to slow regulatory environment,
the supply is far lesser than demand. Currently, India needs to double its
Supply generation. Many projects have been planned but due to slow regulatory
environment, the supply is far lesser than demand. Currently, India needs
to double its generation capacity to meet the potential demand.
Demand The long-term average demand growth rate is 6%.
Barriers to Barriers to entry are high, as entering this business requires heavy
Entry investment initially. The other barriers are fuel linkages, payment
guarantees from State Governments, Retail distribution licensed, etc.
Bargaining Not very high as Government controls tariff structure. However, this may
Power to change the future.
Suppliers
Bargaining Bargaining power of retail customers is low, as power is in short supply.
Power of However, Government is a big buyer and payment by Government can be
Customers more erratic.
Competition Not high currently. The Electricity Act, 2003 will encourage investments,

thereby increasing competition.
Source: Derived from the study of Power sector in India.
8.7. SWOT ANALYSIS

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage
of planning and helps marketers to focus on key issues. SWOT stands for strengths,
weaknesses, opportunities, and threats.
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective. These come from within the company's unique value
chain. SWOT analysis groups key pieces of information into two main categories:
 Internal factors – The strengths and weaknesses internal to the organization.

 External factors – The opportunities and threats presented by the external
environment to the organization
SWOT analysis is a flexible concept that can be used in various scenarios from assessing
projects or business ventures, making decisions, solving problems, evaluating candidates for
a position to marketing strategy formulation.
Fig.10: SWOT Analysis

Source: http://www.excelsia.ch/htmlgb/blog/index.php?entry=entry090108-234052
The SWOT analysis provides information that is helpful in matching the firm's resources and
capabilities to the competitive environment in which it operates. As such, it is instrumental in
strategy formulation and selection. The following diagram shows how a SWOT analysis fits
into an environmental scan:
Fig.11: SWOT Analysis Framework

Environmental Scan
/
\
Internal Analysis
External Analysis
/\
/\
Strengths Weaknesses
Opportunities Threats
SWOT Matrix
Source: http://www.dolphinventures.com/swot_analysis.htm
STRENGHTS AND OPPORTUNITIES OF POWER SECTOR:
 Well established and vast transmission and distribution network.

 Highly qualified engineering and technical personnel.
 Regulatory framework is further facilitated with enactment of Electricity Bill, 2003.

 The Electricity Bill, 2003 holds promises for the power sector and certainly for the
consumer by way of competition reliability and rationalized tariff structure.
 Emergence of strong and globally comparable central utilities (NTPC,
POWERGRID).
 India has substantial non-conventional energy resource base and technologies to meet
growing power requirements by tapping this energy.
WEAKNESSES AND THREATS TO POWER SECTOR:
 Poor infrastructure has led to heavy T&D losses. Old and poor transmission and
distribution network has led to frequent power outages and poor quality of power
 Lack of proper metering and theft has led to large scale losses. Only 51% of the power
generated is billed and only 41% is realized
 Moreover, Government provides power to agricultural sector at subsidized rates and
also free of cost in some states. All these factors have resulted in financial disorder of
the State Electricity Boards (SEBs).
 Restoration of SEBs financial health and improvement in their operating performance
continues to be a critical issue. The Government of India has signed a Memorandum of
Understanding (MOU) with various states reflecting the joint commitment of centre and
states to undertake reforms in a time bound manner
 Poor return to utilities, which affect their profitability and capacity to make further
investments
 Increasing gap between unit cost of supply & revenue, approximately Rs 1.10/ unit
 Managerial and financial inefficiencies in state sector utilities have adversely affected
capacity addition and systems improvement
 Non-availability of quality coal may hamper thermal plants’ efficiency in power
generation

 Inability of SEBs to raise funds, as most of the SEBs is on the verge of bankruptcy due
to poor operational performance. Adding to the problems, SEBs need huge money to
measure up competition from efficient private players
 The major risk of privatizing a critical sector like power is the precedence of
commercial over public interest. Some of these interests that will take a back seat
include development of environment friendly generation and provision of electricity for
rural areas. The new Electricity Act does not provide any specific financial incentives
for private players to address public issues
 The SBEs which are right now holding 60% of total installed capacity, will be hit
adversely by some provisions of the new electricity act such as delicensing of
generation and open access for IPPs and CPPs, there by such units will take away the
most lucrative customers (like industrial and commercial users) from the SEBs. This
will not only affect SEB’s but also the entire power sector for near term.
CHAPTER 9
Issues and challenges

9. ISSUES AND CHALLENGES
9.1. While India has made impressive progress in the Power Sector since independence, it
has not been sufficient. In terms of generation, while new capacity has been added,
demand has far outstripped the supply leading to a widening gap. The primary reason of
the widening gap lies in the distribution link in the value chain. The generation
companies have not found it easy to recover their dues from their biggest buyers,
mainly the State Electricity Boards (SEBs). SEBs suffer huge financial losses every
year due to power theft and ineffective practices of billing and collection. Apparently,
the losses have reached an alarming Rs. 26,000 crore. It is clear that the biggest
fundamental issue hampering the viability of the Indian Power Sector is the sheer
volume or level of Transmission and Distribution (T&D) losses that amount to 25%, a
very high level by any standard. To make the matter worse, indirect calculations show
T&D losses to be much higher in the range of 40-50%. In addition, the distribution
system in India is often characterized by inefficiency, low productivity, frequent
interruption in supply and poor voltage.

9.2. The power supply position is characterized by shortages both in terms of demand met
during peak time and overall energy supply. The peaking shortage is much more in
every region and it is about 12% on all India basis. The energy shortages on regional
basis are varying in magnitude and overall shortage on all India basis is about 7%. To
meet the growing demand and shortages encountered in various regions, generation
capacity is required to be doubled in 10 years, so that the total demand both in terms of
peak and energy can be met
9.3. With the advent of economic liberalization in 1991, the power sector was the focus of
attention for attracting private investment specially FDI in generation. Eight fast track
projects were even offered counter guarantees for payment by the Central Government
in addition to the guarantees of the State Governments. By 1995-96, 57,000 MW of
projects were proposed by potential developers and 27,000MWhad received techno-
economic clearance from the Central Electricity Authority. These were all MOU based
projects with negotiated costs and tariffs. In the absence of a transparent process of
bidding, many of these had high costs. Due to lack of adequate payment security
mechanisms, combined in some cases with public perceptions of high cost in tariffs,
most of these projects did not get implemented. Since 1990 till date only 9922MWof
generation has come in the private sector.
9.4. The decade of the 1990s also saw the gradual deterioration of the financial health of
State Electricity Boards. Towards the latter half of 1990s, it was apparent that the
deterioration in the finances of the State Electricity Boards was becoming
unsustainable. Restoration of the financial health of the State Electricity Boards / State
Utilities was recognized as the most critical challenge facing the sector. In this context
it becomes clear that the distribution sector needed urgent attention if the trend of
deteriorating financial health had to be reversed. The reversal would need a
combination of the following key measures:-
a. Control of theft of electricity

b. Reduction in the cost of supply through reduction in technical losses.
c. Better management and lowering the cost of generation
d. Payment of user charge and Tariff rationalization

CHAPTER 10
CONCLUSION & FINDINGS

10. CONCLUSION & FINDINGS:
Power is one of the prime movers of economic development. The basic responsibility of
power supply industry is to provide adequate electricity at economic cost, while ensuring
reliability and quality of supply. Significant impetus by successive Governments has resulted
in increase in capacity from 1,300 MW during independence to more than 100,000 MW
today. Along with the growth in installed generation capacity, there has also been a
phenomenal increase in the transmission and distribution capacity. However, despite the
significant progress in capacity addition, the demand for electricity continues to outstrip
supply with the result that energy and peaking shortages continue to plaque the economy. The
per capita consumption is among the lowest in the World at 408 kwh/year (as on 2001).
With responsibility for electricity supply shared constitutionally between the central
government and the states, the Government of India has placed increased emphasis on
improving the efficiency of supply, consumption, and pricing of electricity. Significant
reforms are being undertaken in power sector management and financing at the state level.
With reforms in this sector gaining pace, many structural changes are taking place both at the
policy and technical levels. With the passing of the Electricity Act 2003, generation,
transmission and distribution sectors have been thrown open to competition along with the

ushering in of a de-regulated regime. The Government proposes to enhance public funding
for the sector as well as encourage the public sector undertakings to take up projects in joint
ventures with private investors and state governments in the 10th and 11th Plan period. There is
also a focus on initiating suitable policy measures to accelerate the pace of hydro power
development as well as to make nuclear power generation as competitive as power generation
from other fuels.
The financial weakness of the SEBs has been one of the major stumbling blocks in achieving
financial closure of Independent Power Producers (IPPs). The Government of India, with
World Bank assistance, has been encouraging the states to undertake in depth power sector
reforms. This involves distancing the state government from operation of the power sector,
establishing an independent regulatory framework for the sector, progressively reducing
subsidies and restoring the creditworthiness of the utilities through financial restructuring and
cost-recovery based tariffs, and divesting existing distribution assets to private operators.
The Indian power sector is undergoing a crucial phase of transition. Both the Central and
State governments are actively engaged in finding viable solutions to achieve sustainable
development of the power sector. As of now, regulation, rapid capacity addition, and SEB-
reform, with a specific focus on improving revenues from the distribution segment, are
emerging as important areas of reforms in the sector.
10.1. MAJOR FINDINGS:
 Most of the SEBs though are supported by state government, are running under loss.
This is because of power theft, transmission losses, use of conventional methods for
power generation and transmission and out dated management policies.
 Indian power sector has been witnessing a wide demand – supply gap. Although
electricity generation has increased substantially, it has not been able to meet the
demand.
 India is going to build an additional capacity of 1 lakh MW by 2012 including private
sector contribution.
 In a bid to bring structural transformations, necessary reform programs should be
carried out in distribution and transmission process.

India possesses a vast opportunity to grow in the field of power generation, transmission, and
distribution. The target of over 150,000 MW of hydel power germination is yet to be
achieved. By the year 2012, India requires an additional 100,000 MW of generation capacity.
A huge capital investment is required to meet this target. This has welcomed numerous power
generation, transmission, and distribution companies across the globe to establish their
operations in the country under the famous PPP (public-private partnership) programmes.
The power sector is still experiencing a large demand-supply gap. This has called for an
effective consideration of some of strategic initiatives. There are strong opportunities in
transmission network ventures - additional 60,000 circuit kilometers of transmission network
is expected by 2012 with a total investment opportunity of about US$ 200 billion.
REFERENCE

DATABASE:
• Capital line plus

• CEA
• Central Electricity Authority India
• Indiaenergyportal.org
• Ministry of Power
SEARCH ENGINES
• Google.com
• Askjeeves.com
• Soople.com
• Yahoo.com

WEBSITES:
• www.Ibef.org
• www.india.gov.in
• www.teriin.org
• www.coreinternational.com
• www.energywatch.org.in
• www.hansuttam.com
• www.elsevier.com
• www.sciencedirect.com
WEB PAGES:
• http://www.indexmundi.com/India/electricity_consumption.html
• http://www.indexmundi.com/India/electricity_production.html
• http://www.cea.nic.in
• http://www.topnews.in/business-news/power-sector.html
• http://www.energywatch.org.in
• http://www.bharatbook.com/Market-Research-Reports/Indian-power-sector-
database.html
• http://www.marketresearch.com/product/display.asp?productid=1695991
ARTICLES & MAGAZINES
• http://recindia.nic.in/download/T_D_Overw.pdf
• www.wwf.org.uk/filelibrary/pdf/ipareport.pdf
• www.ibef.org/Attachment/Investment%20opportunities%20in%20Power%20Sector.pdf
• http://www.adb.org/Documents/Studies/Timor-Power-Sector-Dev/default.asp
• www.appanet.org/files/PDFs/RestructuringStudyKwoka1.pdf
• www.saneinetwork.net/pdf/SANEI_II/Reforms_and_PowerSector_in_SouthAsia.pdf

• www.ebrd.com/projects/eval/showcase/psr.pdf
LITERATURE REFERENCE:
Augustine .A(2007), “Modeling Indian Power Sector”, pp: 173-181.

www.cs.utexas.edu/~achal/IndianPowerSector.pdf
Banerjee. R (2004), “Comparison of options for distributed generation in India”, Journal of

Energy Policy, Elsevier - Article in Press, 6th June, 2004, Vol – 37 (1), pp: 1-11.
http://www.whrc.org/Policy/COP/India/Banerejee_Energy%20Policy%20(in%20press).pdf
Kumar. S, A. Khetan & B. Thapa (2005),“Indian Power Sector – Emerging Challenges to

Growth”. Reprinted from World Power, pp: 1-5.
http://www.icfi.com/Markets/Energy/doc_files/indian-power-sector.pdf
Newbery. D ,(2005), ‘Power sector reform, private investment and regional co-operation’,
Journal of South Asia: Growth and Regional Integration, pp: 143-170
http://siteresources.worldbank.org/SOUTHASIAEXT/Resources/Publications/448813-
1171648504958/SAR_integration_ch6.pdf
Remes .M (2007), “Russia forerunning EU in power sector forum”, Journal of Baltic Rim
Economies, Expert article 154, 21st December,2007, pp: 20-21
http://www.tse.fi/FI/yksikot/erillislaitokset/pei/Documents/bre/expert_article154_62007.pdf
Schwartz. J (2008), “Lighting Update (ENERGY STAR, Legislation, Trends, Incentives and
Opportunities)” Journal of Today’s Lighting Distributor, May/June 2008, pp: 12-13.
http://www.icfi.com/Markets/Energy/doc_files/lighting-update-schwartz.pdf
Singh. A (2006), “Power sector reform in India: current issues and prospects”, Elsevier in its
journal Energy Policy, Vol: 34 (16)
http://ideas.repec.org/s/eee/enepol.html
Soronow. D, M. Pierce & K. Wang (2003), “The Power Sector Model”, Journal of
NEWFRONTIERS, pp: 18-19.
www.fea.com/resources/pdf/a_power_sector_model.pdf
Sreekumar. N (2008), “Market-Oriented Power Sector Reforms: A Critique”, Journal of

Governance and Public Policy.
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Perspective”.
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Tongia R. (2003), “Power Sector Reform India – The Long Road Ahead”, CEIC Seminar
Carnegie Mellon University
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Interoperability in the Indian Power Sector”, Journal of Grid Interop Forum 2007, pp: 1- 6.
http://www.gridwiseac.org/pdfs/forum_papers/117_paper_final.pdf

Appendix
APPENDIX
Spss Outputs Regression Analysis
ENERGY DEVELOPMENT: Input Data for SPSS
Year Sales Transmission&disbn Consumption Production

2004 7.29 3599 497.2 533.3
2005 8.5 3198 510.1 547.2
2006 12.98 2733 519 556.8
2007 61.68 4413 587.9 630.6
2008 65.74 6662 517.2 665.3
Output:
Variables Entered/Removed(b)

Mode Variables Variables

l Entered Removed Method
1 prodn,
consumpt . Enter
n, TnD(a)
a All requested variables entered.
b Dependent Variable: sales
Model Summary
Std. Error
Mode Adjusted of the
l R R Square R Square Estimate
1 .999(a) .998 .993 2.41480
a Predictors: (Constant), prodn, consumptn, TnD
ANOVA(b)
Mode Sum of Mean

l Squares Df Square F Sig.
1 Regressio
3535.150 3 1178.383 2.081 .052
n
Residual 5.831 1 5.831
Total 3540.981 4
Coefficients(a)
Unstandardized Standardized
Mode
Coefficients Coefficients
l Std. T Sig.
B Error Beta

1 (Constant) 290.655 1.649 -14.076 .145

TnD .007 .003 .374 2.485 .244
Consumpt
.288 .069 .344 4.189 .149
n
Prodn .240 .090 .467 2.652 .230
a Dependent Variable: sales
Regression Equation: Sales = 290.655+0.007(TnD)+0.288(consumptn)+0.240(Prodn)
GVK POWER: Input Data for SPSS

2004 7.13 3599 497.2 533.3
2005 7.32 3198 510.1 547.2
2006 11.57 2733 519 556.8
2007 11.15 4413 587.9 630.6
2008 26.97 6662 517.2 665.3
Output:


1 prodn,
consumpt . Enter
n, TnD(a)
Model Summary
Adjuste Std. Error

M R d R of the
odel R Square Square Estimate
1 .995(a) .989 .956 1.70745
Anova(b)
Mode Sum of Mean

1 Regressio
264.284 3 88.095 0.217 .056
n
Residual 2.915 1 2.915
Total 267.200 4

Coefficients(a)
Mode
l Std. T Sig.
B Error Beta
1 (Constant) 21.811 4.600 1.494 .136
TnD -.003 .002 -.587 -1.515 .141
Consumpt
-.197 .049 -.854 -4.042 .114
n
Prodn .257 .064 1.822 4.024 .145
INDOWIND ENERGY: Input Data for SPSS

2004 41.79 3599 497.2 533.3
2005 18.67 3198 510.1 547.2
2006 23.31 2733 519 556.8
2007 24.37 4413 587.9 630.6
2008 25.59 6662 517.2 665.3
Output:


1 prodn,
consumpt . Enter
n, TnD(a)
Model Summary
Std. Error
1 .769(a) .591 .635 0.26309
ANOVA(b)
Mode Sum of Mean

l Squares df Square F Sig.
1 Regressio
183.474 3 61.158 .482 .042
n
Residual 126.857 1 126.857
Total 310.332 4

Coefficients(a)
Mode
l Std. T Sig.
B Error Beta
1 (Constant) 121.619 6.311 1.263 .026
TnD .014 .013 2.528 1.066 .030
consumpt
.214 .321 .861 .666 .046
n
Prodn -.454 .422 -2.988 -1.078 .043
JP HYDRO: Input Data for SPSS
Output:

2004 300.02 3599 497.2 533.3
2005 304.99 3198 510.1 547.2
2006 277.55 2733 519 556.8
2007 335.77 4413 587.9 630.6
2008 307.63 6662 517.2 665.3


1 prodn,
consumpt . Enter
n, TnD(a)
Model Summary
Std. Error
1 .955(a) .912 .647 0.35616
ANOVA(b)
Mode Sum of Mean

1 Regressio
1579.154 3 526.385 0.344 .039
n
Residual 152.675 1 152.675
Total 1731.828 4

Coefficients(a)
Mode
l Std. T Sig.
B Error Beta
1 (Constant) 159.016 5.657 1.505 .033
TnD .028 .015 2.093 1.900 .008
Consumpt
.918 .352 1.565 2.607 .045
n
Prodn -.771 .462 -2.147 -1.668 .014
KSK ENERGY:
Input Data for SPSS

2004 0 3599 497.2 533.3
2005 6.05 3198 510.1 547.2
2006 6.47 2733 519 556.8
2007 16.53 4413 587.9 630.6
2008 50.16 6662 517.2 665.3

Output:

1 prodn,
consumpt . Enter
n, TnD(a)
Model Summary
Std. Error
1 .999(a) .997 .990 2.04206
ANOVA(b)
Mode Sum of Mean

1 Regressio
1608.715 3 536.238 3.594 .067
n
Residual 4.170 1 4.170
Total 1612.885 4

Coefficients(a)
Mode
l Std. T Sig.
B Error Beta
1 (Constant) 87.629 7.462 -5.018 .125
TnD .002 .002 -.191 -1.012 .246
consumpt
-.318 .058 -.563 -5.475 .315
n
Prodn .479 .076 1.383 6.273 .211
Regression Equation: Sales = 87.629+0.002(TnD)-0.318(consumptn)+0.489(Prodn)
NTPC:
Input Data for SPSS

2004 18868.4 3599 497.2 533.3
2005 22732.4 3198 510.1 547.2
2006 26904.9 2733 519 556.8
2007 32817.3 4413 587.9 630.6
2008 37302.4 6662 517.2 665.3

Output:

1 prodn,
consumpt . Enter
n, TnD(a)
Model Summary
Std. Error
1 1.000(a) .991 .998 1.390
ANOVA(b)
Mode Sum of Mean

1 Regressio 2215869 73862311.3
3 1.654 .068
n 34.198 99
Residual 109158.1
1 109158.150
50
Total 2216960
4
92.348

Coefficients(a)
Mode
l Std. t Sig.
B Error Beta
1 (Constant) -62159.4
5.169 -22.002 .129
74
TnD -4.356 .396 -.906 -11.011 .258
consumpt
-77.689 9.411 -.370 -8.255 .277
n
Prodn 253.518 2.366 1.972 20.500 .131
POWER GRID:
Input Data for SPSS

2004 2263.03 3599 497.2 533.3
2005 2513.07 3198 510.1 547.2
2006 3145.34 2733 519 556.8
2007 3589.85 4413 587.9 630.6
2008 4614.82 6662 517.2 665.3
Output:


1 prodn,
consumpt . Enter
n, TnD(a)
Model Summary
Std. Error
1 .996(a) .991 .965 .42873
ANOVA(b)
Mode Sum of Mean

1 Regressio 3472515. 1157505.33
3 1.612 .059
n 989 0
Residual 30775.24
1 30775.240
0
Total 3503291.
4
230
b Dependent Variable: sale
Coefficients(a)

Mode
l Std. T Sig.
B Error Beta
1 (Constant) 5886.59
0.089 -3.924 .159
4
TnD -.512 .210 -.848 -2.438 .248
consumpt
14.895 4.997 -.565 -2.981 .206
n
Prodn 32.493 6.566 2.010 4.948 .127
Regression Equation: Sales = 5886.594-0.512(TnD)+14.895(consumptn)+32.493(Prodn)
RELIANCE INFRASTRUCTURE:
Input Data for SPSS

2004 3510.88 3599 497.2 533.3
2005 4152.69 3198 510.1 547.2
2006 3956.05 2733 519 556.8
2007 5769.26 4413 587.9 630.6
2008 6152.12 6662 517.2 665.3
Output:


1 prodn,
consumpt . Enter
n, TnD(a)
Model Summary
Std. Error
1 .992(a) .983 .933 0.95998
ANOVA(b)
Mode Sum of Mean

1 Regressio 5426864. 1808954.90
3 19.709 .164
n 704 1
Residual 91784.75
1 91784.751
1
Total 5518649.
4
455

Coefficients(a)
Mode
l Std. T Sig.
B Error Beta
1 (Constant) 8055.02
0.607 -3.109 .198
5
TnD .068 .363 .089 .187 .882
consumpt
5.052 8.630 .153 .585 .663
n
Prodn 16.748 1.340 .826 1.477 .379
Regression Equation: Sales= 8055.025+0.068(TnD)+5.052(consumptn)+16.748(Prodn)
TATA POWER:
Input Data for SPSS

2004 4237.05 3599 497.2 533.3
2005 3935.63 3198 510.1 547.2
2006 4568.67 2733 519 556.8
2007 4725.92 4413 587.9 630.6
2008 5937.36 6662 517.2 665.3
Output:


1 prodn,
consumpt . Enter
n, TnD(a)
Model Summary
Std. Error
1 .967(a) .935 .739 1.25545
ANOVA(b)
Mode Sum of Mean

1 Regressio 2192663.
3 730887.824 1.775 .022
n 472
Residual 153080.8
1 153080.825
25
Total 2345744.
4
297
Coefficients(a)

Mode
l Std. T Sig.
B Error Beta
1 (Constant) 441.374 5.621 .132 .016
TnD -.166 .469 -.336 -.355 .033
consumpt
-12.785 1.145 -.593 -1.147 .036
n
Prodn 19.863 4.645 1.502 1.356 .024
TORRENT :
Input Data for SPSS

2004 0 3599 497.2 533.3
2005 0 3198 510.1 547.2
2006 3831.52 2733 519 556.8
2007 1392.95 4413 587.9 630.6
2008 3628.65 6662 517.2 665.3
Output:


1 prodn,
consumpt . Enter
n, TnD(a)
Model Summary
Std. Error of
Mode Adjusted
l R R Square R Square the Estimate
1 .909(a) .826 .306 4.78687
ANOVA(b)
Mode Sum of Mean

1 Regressio 1166385 3887950.44
3 1.588 .015
n 1.335 5
Residual 2448557. 2448557.95
1
953 3
Total 1411240
4
9.289
Coefficients(a)

Mode
l Std. T Sig.
B Error Beta
1 (Constant) -14238.7
0.473 -1.064 .048
45
TnD -3.147 1.874 -2.595 -1.680 .042
consumpt
-74.953 4.574 -1.416 -1.682 .034
n
prodn 116.640 8.569 3.596 1.991 .016

POWER SECTOR - Industry Analytics

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ALLIANCE BUSINESS

SUBMITTED TO : PROF. SAMIK SHOME

SUBMITTED BY: GROUP NO: 2

TOPIC PAGE NO.

Power Sector Report – ABS, Bangalore 2 | Page

6.1 Impact of Power Sector 64

Power Sector Report – ABS, Bangalore 3 | Page

TOPIC PAGE NO.

1. OECD Multinational Electricity companies 13

Power Sector Report – ABS, Bangalore 4 | Page

TOPIC PAGE NO.

1. World Marketed Energy Consumption,1980-2030 12

Power Sector Report – ABS, Bangalore 5 | Page

Power Sector Report – ABS, Bangalore 6 | Page

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

Power Sector Report – ABS, Bangalore 8 | Page

OVERVIEW OF POWER SECTOR

Power Sector Report – ABS, Bangalore 9 | Page

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

Power Sector Report – ABS, Bangalore 10 | P a g e

1.2. GLOBAL OVERVIEW

Power Sector Report – ABS, Bangalore 11 | P a g e

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

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

Power Sector Report – ABS, Bangalore 12 | P a g e

Table 1: OECD Multinational Electricity Companies

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

EDF Generation 1684MW China, Laos, Vietnam

Enron Generation 204MW Philippines, Guam

China, Philippines, Singapore,

Mirant Generation 2261MW Philippines

Transalta Generation 280MW Australia

IP Generation 3817MW Australia, Pakistan, Thailand, Malaysia

CDC Generation 810MW Bangladesh

Power Sector Report – ABS, Bangalore 13 | P a g e

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

Power Sector Report – ABS, Bangalore 14 | P a g e

Power Sector Report – ABS, Bangalore 15 | P a g e

2.1 REVIEW OF LITERATURE

Power Sector Report – ABS, Bangalore 16 | P a g e

Power Sector Report – ABS, Bangalore 17 | P a g e

Power Sector Report – ABS, Bangalore 18 | P a g e

Power Sector Report – ABS, Bangalore 19 | P a g e

Power Sector Report – ABS, Bangalore 20 | P a g e

Power Sector Report – ABS, Bangalore 21 | P a g e

POWER SECTOR IN INDIA

3.1. POWER SECTOR IN INDIA

Power Sector Report – ABS, Bangalore 22 | P a g e

3.1.1. EMERGENCE OF REGIONAL POWER SYSTEMS

Power Sector Report – ABS, Bangalore 23 | P a g e

Power Sector Report – ABS, Bangalore 24 | P a g e

 RES = Renewable Sources.

Table.2: Gap Between Demand And Supply Of Power

Power Sector Report – ABS, Bangalore 25 | P a g e

Transmission Strategy with focus on development of National Grid including Interstate

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

3.1.2.2. INVESTMENTS IN GENERATION

Power Sector Report – ABS, Bangalore 26 | P a g e

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

Power Sector Report – ABS, Bangalore 27 | P a g e

3.1.3.1. GROWTH OF TRANSMISSION

Table.3: CUMLATIVE GROWTH IN TRANSMISSION SECTOR &

Power Sector Report – ABS, Bangalore 28 | P a g e

Source: National Electricity Plan (vol-II) Transmission