Report On Power Generation Industry

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Reort On Power Generation Industry

Indian generation industry-Staring at reforms...

The 12th Plan (2012-17) is expected to add 76GW of capacity (v/s initial MoP
target of 100GW). Presently, Indian power generation industry is currently
suffering on account of fuel related issues and poor health of state
distribution companies.



India’s 56% of the installed capacity (187GW) is coal-based. In 11th Plan, the
domestic coal supply grew at 4.4% CAGR vis-à-vis demand i.e. capacity addition
of 8-9% CAGR over the same period. Consequently, the power generators are facing
acute shortage of domestic coal. To add to the woes, the imported coal price
revision by Indonesian government has created problems for private IPPs which
entered into power supply agreements based on lower contracted coal prices. CARE
Research has critically analysed the muted domestic coal supply, imported coal
pricing problems and reasons for a non-starter Captive coal Policy and
feasibility of blended coal for Indian power plants.
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http://www.bharatbook.com/market-research-reports/energy-market-research-report/power-generation-industry.html



CARE Research has also evaluated the reasons behind low Indian per capita
electricity consumption, UMPP policy flaws, fate of merchant power plants,
declining hydro share, problems faced by power lenders, gas shortage and
possible solutions and most importantly impact of poor financial health of state
distribution companies on power generation capacity addition in the 12th Plan.



CARE Research estimated the 12th Plan capacity addition of ~49GW with Renewable
share to reach to 20% i.e. 52GW by FY17. However, clarity over imported coal and
gas pricing is likely to be a major boost for improvement in power sector.
Generation Industry



Since 2007, banks and specialized lenders had aggressively lent to power sector
resulting into rising share of power exposure to 7.6% (of gross advances) by
9MFY12. This has resulted into impending risk of rising bad loans for lenders,
if the current policy stalemate is not addressed effectively and if GoI doesn’t
come out with clear policy roadmap in terms of fuel supply (both imported coal
and gas) and addresses the issues such as land acquisition delays, MoEF
clearances, Rehabilitation and Resettlement problems and other infrastructure
related issues in a time bound manner. CARE Research indicates that the
integrated business model with captive coal mines scores over the other
prevailing business models and increasing trend among the power developers to
shun from Merchant Power model to secure domestic fuel going forward. CARE
Research also observes that power industry may witness some kind of project
level consolidation if domestic coal availability doesn’t improve materially.





SECTION- I CARE Research’s OUTLOOK

Outlook

• 12th plan capacity addition expected to falter on coal scarcity

• Renewable share to double to 20% by 12th Plan-end

• Clarity yet to emerge on imported projects; fuel pass through expected

• Power Sector-Consolidation on cards; a key growth driver for large IPPs

• Gas resources constrained; R-LNG may be pooled to run power plants

• Power lenders staring at restructuring power portfolios

• Improvement in Distribution Sector; key for sustainability

• Productive captive mine/binding FSAs--business models with inherent advantage



SECTION- II INDUSTRY SECTION

Introduction

• Pre-2003-Dire State

• 2003-2006- Path breaking reforms

• 2007-2009- initial euphoria and merchant boom

• 2009-11-Self correction

• 2011 onwards- Redefining period

Power Sector – Regulatory evolution

• Pre-reform stage (1947-1991)

• Post-reform (1992-2003)

• Electricity Act, 2003 (2003-till date)

Demand Characteristics and behaviour

• Power demand charterstics

• Seasonality

• Ailing SEBs to stifle growth

• State elections- fair unmet demand indicator

• Consumers ready to pay for quality and reliability

Capacity addition in the 12th Plan

• Thermal PLFs reached record low

• Installed capacity is coal dominated; renewable push expected

• What is in store for the 12th Plan

• Private sector participation to rise

• Case II bids would gets preference

• Only silver lining is 49% of the capacity addition is supercritical

Coal supply- biggest impediment

• Coal demand supply gap widening

• CIL non-committal on new power projects

• Coal stock pile up at pitheads

• Impact of No-Go areas

• A new curse-GCV mechanism

• Economics of imported coal

• Captive coal policy- a non starter

• Feasibility of coal blending

Natural Gas- Is it a game changer?

• Global outlook



For more information kindly visit :

http://www.bharatbook.com/market-research-reports/energy-market-research-report/power-generation-industry.html



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