Csr Tata Power- Project

7/21/2019 Csr Tata Power- Project

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CORPORATE SOCIAL RESPONSIBILITY

TATA POWER

CSR REPORT



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INDEX

INTRODUCTION : ENERGY SECTOR

SL. NO. CONTENT PAGE NO.

1 INTRODUCTION : ENERGY SECTOR 3

2 DEMAND-SUPPLY GAP IN THE POWER SECTOR 4

3 POWER CRISIS 5

4 TATA POWER: INTRODUCTION 6

5 CSR SUSTAINABILITY MODEL AND INITIATIVES 7

6 GREY AREAS 10

7 CRITICAL ANALYSIS

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8 REFERENCE 13



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GLOBAL SCENARIO :

For the year 2012, the following table shows the maximum amount of energy being supplied bydifferent countries of the world.

Countries Units ( Mtoe )

China 2459

United States 1826

Russia 1325

Saudi Arabia 650

India 548

Canada 417

Indonesia 415

Iran 323

Australia 320

Nigeria 263

INDIA :

The total All India Installed Capacity of electric generating stations as on 31st December,2012was 2,11,766.22 MW and the demand was 1,35,453 MW as per the CEA. The distribution of thesame as per the energy sources installed is as follows:

Table 1

(Source : CEA)

Fuel MW %age

Total Thermal 141713.68 66.91

Coal 121,610.88 57.42

Gas 18,903.05 8.92

Oil 1,199.75 0.56

Hydro (Renewable) 39,416.40 18.61

Nuclear 4,780.00 2.25

RES** (MNRE) 25,856.14 12.20

Total 2,11,766.22 100.00



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Pic 1: (Source :www.indianpowersector.com)

As per the Press information report, power sector has grown positively over the 11th Plan period. It registered a growth rate of 3.96% in 2012-13. The peak deficit in the year 2012-13

was 9% against the deficit of 10.6% in the year 2011-12. The decision to add generationcapacity of 88,537 MW, import 82 Million Tonnes of coal, reduction in transmission anddistribution losses etc. is expected to bridge the gap between peak demand and peak met.As perPlanning Commission, capacity addition of 88,537 MW is planned from conventional sources forthe 12th Five Year Plan on an all-India basis.

DEMAND-SUPPLY GAP IN THE POWER SECTOR

The power supply position of the country remains grim even in the first year of 12th Five year

plan 2012-2017 in spite of massive 55000 MW capacity addition in the 11th plan against meagrecapacity addition of 21000 MW in the 10th plan. The country suffered energy shortage of 2011-12 as the supply was 858 BU (billion units) against the demand of 937 BU. The peak powerdemand during the previous year 2011-12 was 1,30,006 MW while the availability was 1,16,191MW, thereby rendering a peak demand gap of 10.6 percent.

In the rural sector, under the Rajiv Gandhi GrameenVidyutikaranYojana (RGGVY), the

government has been able to provide free electricity to only 21 million BPL household still 30thJune, 2013. According to planning commission, there are 42 million people in the rural areas,which means only 50% almost of them have been electrified.

India is a developing country and shortfall in the power supply has direct impact on the GDPgrowth of the country. Power supply gap of 8-9 % has potential to lower GDP by 0.6-0.7 %. Adeveloping economy can ill afford to drop GDP growth by such a large margin. In fact ourneighbour China overcame energy shortage to achieve massive double digit growth..

The latest projections from the Central Electricity Authority(CEA) for the upcoming year says -the country is expected to experience energy shortage of 6.7 per cent and peak shortage of 2.3 per cent despite very high shortages likely to be experienced by Southern Region.

http://www.indianpowersector.com/



http://www.rggvy.gov.in/rggvy/rggvyportal/index.html



http://www.pib.nic.in/newsite/erelease.aspx?relid=97640


http://economictimes.indiatimes.com/topic/Central%20Electricity%20Authority

http://c/Users/riddhi/Desktop/csr/Indian%20Power%20Sector%20Analysis%20%20%20Overview%20of%20Power%20Industry%20%20%20Industry%20Research%202011%20%20%20Stock%20Shastra_files/Top-players-power-sector.png

http://economictimes.indiatimes.com/topic/Central%20Electricity%20Authority






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POWER CRISIS OF INDIA.

1. The disruption or outage costs India Inc Rs.43,205crore every year. ( source: india today)2. The worst-affected sector has been manufacturing. The power shortages and relentless

scheduled and unscheduled cuts have only added to high interest rates and input costs,taking the sector‟s losses to Rs.15,466crores.

3. The worst affected among industrial consumers in the region are the small and mediumsized unit owners, most of whom are left with no option but to either run captive unitsfueled by expensive diesel or simply down the shutters.

4. Telecom, real estate and infrastructure firms suffer the most from downtime losses whichaverage Rs.54,434 per hour. These sectors have critical dependence on IT and automationand conditioning equipment which draw heavily on power.

5. Black outs on 30th and 31st july came with a shutdown of almost the entire country. Over600 million people , of 22 out of 28 states were without power.

6. Transmission and distribution losses amount to almost 28.44%.



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TATA POWER : INTRODUCTION



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TOTAL GENERATION : 8521 MW

TRANSMISSION :Tata Power's transmission operations in Mumbai License Area stretch fromColaba in South Mumbai to Bassein Creek in North Mumbai and to Vikhroli in North-EastMumbai (bypassing Bhandup and Mulund)

DISTRIBUTION :It has its own distribution centres in Mumbai and Delhi. It has franchise fordistribution in Jamshedpur circle.

CSR SUSTAINABILITY MODELS AND INITIATIATIVES

ACKERMAN‟S MODEL

This model defines CSR in three different phases

First phase - Top management recognizes social problem

Second phase – The company appoints staff specialists to look into the issue and find

measures to tackle it

Third phase - Implementation of the strategy derived by the specialists.

TATA power sustainability model:

First phase - Top management recognizes social problem Senior management inTATA sons the main holding company of Tata power always focused on socialdevelopment over the years.

Second phase – The company appoints staff specialists to look into the issue and findmeasures to tackle it. They appointed a Chief Sustainability Officer (CSO) and setupa separate division for Sustainability.

Third phase - Implementation of the strategy derived by the specialists.

87%

13%

Total Generation

conventional

energy

Renewable

Energy



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Ideas that are in use:

1. Care for the environment:

A.

Care for the Environment addresses various aspects of resource conservation, energyefficiency, carbon footprint, renewable power generation, encouraging our ownemployees to monitor their personal contribution to this global issue.

B. Tata Power is among the frontrunners in India in introducing technologies that cutgreenhousegas emissions. Several steps - such as exploring renewable energy opportunities andinitiatingenergy efficiency projects have been framed to reduce greenhouse gas emissions andimproveenvironmental performance.C. Reduce carbon intensity by improving thermal efficiency in existing fossil fuel-based

plants using clean-coal technology.D. Place emphasis on renewable power, such as from biogas, hydro, solar and wind.E. E-Waste Management:

1. Procure IT and OT system hardware from vendors who are likely to take backe-waste in the future.2. Minimize generation of e-waste by extending the useful life of electronichardware.3. Carry out e-waste disposal only through e-waste handlers/recyclers authorized by Central or State Pollution Control Boards

F. They are trying to implement MDG Goal 7Tata Power spends more than Rs.3million a year on afforestation projects since early1970s - with the focus on planting indigenous and endangered species like theSaracaAsoka.In the last two years, 19.6lakh trees have been planted in and around theoperating plants/ projects. This has significantly increased the water table in lakes. It hasalso created employment opportunity for local people by means of nursery and plantationof saplings.1,30,00,000 saplings have been planted by Tata Power since 1970G. Tata power has brought some changes to conserve power:

Switchover to Variable Frequency Drive from constant speed drive in large pumps across

the powerplant. Switchover the energy efficient lighting likes CFLs and standardizing the AC

temperatures to 24oC

Replacing the electric water heaters with solar water heaters at canteens Solar based LEDlighting in selected areas; LED based street lighting

Electric Vehicles for internal transport within plant premises



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2 .Care for the community:

Tata power supplies power that spurs industrial growth, makes education and superiorhealthcare possible.They provide jobs and employment in ancillary industries and in

areas surrounding powergenerating facilities to local community people. Opened primary schools and constructed additional classrooms to existing schools

in villages which in turn increased the number of girl students in particular andstudents in general.

Tata Power‟s Hydro generating station areas are prone to heavy monsoons, school

sessions were often interrupted so Tata power has provided accommodation forteachers which has helped reduced absenteeism of teachers.

Company has built over 65 primary schools, 4 high schools, 20 rooms forteachers, repaired and renovated many schools.

Conduct Vocational Training in technical courses and other skills like

Horticulture, Bamboo Crafts, Paper Mashie, Tailoring, etc that facilitate the youtheither to gain employment or be self employed.

Tata Power began an Energy Conservation Programme for school children by thehelp of Tata Power Energy Club

In the hilly terrains of MavalTaluka in Maharashtra the huts oftribals, which wereaway from the main village, have also been provided with independent homesystems and streetlights. The Company provided a 10% share of the electrification project approved by Maharashtra Energy Development Agency jointly withMinistry of Non-conventional Energy Sources.

In Jojobera (Jharkhand ), 35 solar street lights and 100 lanterns were donated tothe villagers of Khayerbani.

The Company extends healthcare through its Medical Centres, to the surroundingcommunities

Medical Camps are conducted through the year and medicines distributed. Earlydiagnosis had led to early treatments thus reducing Mortality Rates. THEY have been partners in the Polio Immunization Drives of the Government by providingthe necessary infrastructure to conduct the Drives.

The “Life Line Express” medical camp spanned across 40 days and catered tothousands of

patients from the remotest villages.

Repeated childbirths in early years, coupled with inadequate nutrition during

pregnancy,permanently impact the health of the mother and child alike so tata

power distributed oral contraception to rural women . Tata power started rural BPO in September 2009, under the aegis of Mannat

Foundation - the community initiative arm of the company, initially employed 47call agents. It provided employment to lot of youths. Tata power also providedtraining required for those working in BPOs. (3.times of india)

3.Care for customer: They have started working with customers in the form of the Demand SideManagement Projects, the Tata Power Energy Club and helping customers to develop



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small renewable energy systems.To educate consumer on how to conserve electricitythey launched a campaing“I Will, Mumbai Will “ 4 . Care for employees:a. Tata power has taken measure like LASER program for safety of all employees in

all aspects of operations within factory and as well as day-to-day living.An integratedSafety Management System (SMS) based on Occupational Health & Safety wasimplemented.Administration (OSHA) Process Safety Management (PSM) model wasdeveloped and implemented across Tata Power. b. Educate the employees on the hazards of e-wastec. Create awareness amongst employees, consumers and public about energyconservation.d. For reducing Transport Footprint Tata Power provides bus services for employeeswho work at their power plants. Car-pooling and the use of video-conferencing facilities are widelyencouraged in the

company.5. For MDG goal 8:Tata Power has established a formal system of measuring, monitoring and reportingon its economic, environmental and social performance. It is one of the 53international companies that are part of the Combat Climate Change (3C) initiative,which seeks to integrate climatechange issues into world markets.Tata Power is a signatory to the United Nations Global Compact (UNGC), a United Nations initiative that encourages businesses to adopt sustainable policies.

OTHERS:

A bioremediation process (with assistance fromTERI) at Trombay continues tohandle sludge from Oily substance in Trombay and Jojobera, waste lubricating oil

continues to be given to authorized agencies for recycling and fly ash generatedcontinues to be given to vendors for use in Ready-Mix concrete (RMC) plants, brick- block manufacturing plants and cement plants.

Monetary aspect:

Tata Power spends more than Rs.8 crore every year on pollution control andmonitoring. Currently Tata Power spends nearly 1 percent of its net income before tax oncommunity initiatives.4. TATA power sustainability report 2010 and 2011 and 2008

GREY AREAS: KEY STAKEHOLDERS WHO HAVE BEEN NEGATIVELY

IMPACTED BY TATA POWER NOT HONOURING ITS SUSTAINABILITY

REPORT COMMITMENTS

A. STAKE HOLDER: GOVERNMENT1.JHARKHAND:(TUBED COAL BLOCK ISSUE)

The Coal Ministry has issued show-cause notices to certain corporate

entities for not developing the coal mines allotted to them.



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IMG recommended deduction of bank guarantee of Tubed coal block inJharkhand, to Tata Power

[5.thehindubusinessline.com;June18,2013]2. RAIGAD:

The Supreme Court questions Tata power's upcoming 1,600 MW power project in Raigad

The issue was regarding the conversion of agricultural land to Industrial

use6.[ financialexpress.com;Jan19,2013]

B.STAKE HOLDER: COMMUNITY1. RAIGAD:

PIL filed by five farmers opposing the 1,200-acre land acquisition by thestate for Tata Power‟s R8,000-crore coastal power plan.

The agriculturists, claiming to represent 70% of the affected people, saidthat 906 landholders, 500 landless labourers and their families in thevillages were affected by the acquisition.

people who were compensated by the company were not the genuineowners

7.[ finaicialexpress.com;Jan19,2013]

2. MUNDRA:

An independent fact finding team led by former chief justice of SikkimJustice, S.N Bhargava has alleged that the social and environmentalimpact assessments of Tata power's Mundra project are “misleading anderroneous” and exclude a large number of communities whoselivelihood is being affected by the project 8.[ Refer to re port ’Real Cost

of Power’ ]

C.STAKEHOLDER: CUSTOMERS

1.ECONOMIC IMPACT:

TATA POWER had approached the Central Electricity RegulatoryCommission (CERC) to consider an increase in its power tariffs aftercustomers didn‟t want to pay higher charges.9.[livemint.com;April15,2013]

2.HUMAN RIGHTS:

Sube Singh, a resident of Badli locality, hanged himself in the presence ofTata power officials who had come with bouncers10.[indiatv.com;September15,2012]

D.STAKEHOLDER: ENVIRONMENT

1.MUNDRA:



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An Independent fact finding team has called for suspension of work relatedto the upcoming 4,000 MW Tata Mundra Ultra Mega Power Project(UMPP) in Gujarat, citing “serious social and environmental violations”.

The team, led by former Chief Justice of Sikkim S.N. Bhargava, released a

report –„The Real Cost of Power‟- and presented the findings from theground8.[Refer to report,’Real Cost Of Power’ ]

2.TROMBAY:

Pollution norms were not followed for 40 out of 50 months till 2012at Tata Power Company (TPC)‟s Trombay thermal power plant,according to information obtained under the Right to InformationAct (RTI). 11.[hindustantimes.com;July8,2013]

3.ODISHA:

Tata Power Company Ltd (TPCL) has decided to shift the locationof its 2000 Mw coal-based power plant in the state from Naraj in

Cuttack district to Begunia in Khurdadistrict due to opposition bythe state forest and environment department and green activists overlocating the plant close to Chandaka wildlife sanctuary.12.[business-standard.com;June21,2013]

E.STAKEHOLDER: CREDITORSLOAN DEFAULTS:

Tata Power Co , India‟s third-most indebted generator, is negotiating

with lenders to avoid penalties after it failed to meet conditions on$2.3 billion of loans taken to build its largest plant.

The unprofitable Mundra plant in India‟s Gujarat state has weighedon earnings at Tata Power, which has reported two straight years oflosses. 13.[livemint.com;July16,2013]

CRITICAL ANALYSIS

The essence of CSR lies in the integration of social, environmental, and economic considerations

into the decision-making structures of business. It is not only about honoring legal obligations but also about creating more effective strategies within a country‟s legal framework to satisfy the

constantly evolving demands of the society in order to build more sustainable businesses. This inturn, will enable a company to deliver improved shareholder value through:

stronger financial performance through operational efficiency gains improved relations with the investment community and better access to capital

http://www.livemint.com/Search/Link/Keyword/Tata%20Power%20Co

http://www.livemint.com/Search/Link/Keyword/Tata%20Power%20Co



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enhanced employee relations that yield better results respecting recruitment, motivation,retention, learning and innovation, and productivity

stronger relationships with communities and enhanced licence to operate improved reputation and branding

Tata Power‟s CSR initiatives towards the various stakeholders mentioned in detail elsewhere in

this report are all driven towards achieving one or the objective mentioned above. In fact, a key

feature of its CSR activities involves the way that it engages, involves, and collaborates with its

stakeholders including shareholders, employees, customers, local communities and

governments. To the extent that stakeholder engagement and collaboration involve maintaining

an open dialogue, being prepared to form effective partnerships, and demonstrating transparency

(through measuring, accounting, and reporting practices), the relationship between the company

and the community in which it operates is likely to be more credible and trustworthy.

However, everytime there is a violation of these principles (the grey areas detailed in the previous chapter), Tata Power incurs huge financial as well as intangible losses. To cite an

example, when a power project which is causing huge environmental damage, is forced to shift

its location or worse still, becomes inoperational, due to the strong protests of the local

community, Tata Power would incur massive logistical costs(financial) as well as a loss of

confidence in the local community where the project is located(intangible). Both of these

together would drive down a company‟s future margins.

The bottom line is that a prudent business may tend to regard CSR in the same way it treats

most investment decisions. It would be inclined to use the same systematic approach to assess

the anticipated benefits and related revenues relative to the costs that it employs for investment

proposals. A rigorous and systematic approach to CSR investment is likely to yield the most

positive results for both the business and society as it is likely to demonstrate the most efficient

allocation of resources from the perspective of both the firm and society.

Reference:

1. Table 1 – CEA

2. Pic 1- www.indianpowersector.com

3. Times of india 16

th may 2011

4. TATA power sustainability report 2010 , 2011 and 2008

5. .thehindubusinessline.com;June18,2013

6. financialexpress.com;Jan19,2013

7. finaicialexpress.com;Jan19,2013

8. Refer to report ’Real Cost of Power’







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9. livemint.com;April15,2013

10. indiatv.com;September15,2012

11. hindustantimes.com;July8,2013

12. business-standard.com;June21,2013

13. livemint.com;July16,2013

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