INDUSTRY ANALYSIS ON

POWER

BySIVA KUMAR(31)

INDIAN INDUSTRY

• The electricity sector in India had an installed capacity of 

237.742 GW as of February 2014

•  the world's fourth largest Captive power plants generate 

an additional 39.375 GW. 

• Non  Renewable  Power  Plants  constitute  87.55%  and 

Renewable  Power  Plants  constitute  12.45%  of  total 

installed Capacity. 

Indian Industry

• India  generated  around  911  BU  (911,652  MU  i.e. 

911 TWH) of electricity during the 2012–13.

• The total annual generation of electricity from all types of 

sources was 1053.9 Terawatt-hours(TWH) in 2012. 

• The  total  All  India  Installed  Capacity  of  electric 

generating  stations  as  on  31st  March,  2013  was 

2,23,343.60 MW 

• .

TRENDS IN POWER INDUSTRY

• The heart  of  the power plant  -  combustion gas  reaches 1,500 degrees C hot enough to melt some metals.

•   This  hot  gas  races  through  the  turbine,  setting  the special alloy  turbine blades  in rotation at speeds of over 3,000 rpm. 

• This  rotational  energy  is  converted  to  electricity  by  the power  generator  fixed  on  the  end  of  the  turbine  shaft. MHI's benchmark G-Series gas turbine generates around 330MW  of  power,  sufficient  to  provide  electricity  to 40,000 homes

POWER

WAYS OF POWER

THERMAL POWER

NUCLEAR POWER

WIND

POWERSOLAR POWER

SOLAR POWER

• Solar power  is  the conversion of sunlight  into electricity, 

either  directly  using  photovoltaics  (PV),  or  indirectly 

using concentrated solar power (CSP). 

• The 354 MW SEGS CSP installations is the largest solar 

power  plant  in  the  world  and  is  located  in  the  Mojave 

Desert of California

• Solar power is pollution-free during use.

•  PV installations can operate for many years with little maintenance or intervention after their initial set-up 

• Solar electric generation is economically superior where grid connection or fuel transport is difficult, costly or impossible

• Compared to fossil and nuclear energy sources, very little research money has been invested in the development of solar cells, so there is considerable room for improvement

Advantages

• Solar electricity is more expensive than most other forms of small-scale alternative energy production

• Solar electricity is not produced at night and is greatly reduced in cloudy conditions. 

• Solar cells produce DC which must be converted to AC. This incurs 4-12% losses

• The efficiency of conversion of solar energy to useful energy is low

Disadvantages

Wind power

Wind power

• The development of wind power in India began in the 1990

• India has the fifth largest installed wind power capacity in the world.

• The total estimated capacity is 45000 GW

• As of 31 Dec 2013 the installed capacity of wind power in India was 20000 MW

State Capacity as on 31.03.2013(MW)

Tamil Nadu 7162.18

Gujarat 3174.58

Maharashtra 3021.85

Rajasthan 2684.65

Karnataka 2135.50

Andhra Pradesh 447.65

Madhya Pradesh 386.00

Kerala 35.10

Others 4.30

Total 19051.46

NUCLEAR POWER IN INDIA

• Fourth-largest source of electricity in India after thermal,

hydroelectric and renewable sources.

• India has 20 nuclear reactors in operation in 6 nuclear power

plants, generating 4,780 MW.

• 5 plants are under construction and are expected to generate

an additional 2,720 MW.

• Plans to increase nuclear power output to 64,000 MW by

2032

• Current electricity generation capacity from nuclear energy is

approximately 4.2%.

NUCLEAR FUELS

• The most common fissile nuclear fuel is Uranium 235.

• Thorium can also be used as nuclear fuel.

• Although not fissile itself, Th-232 will absorb slow neutrons to produce uranium-233 (U-233), which is fissile.

Coal Reserves in India

• India has World’s Third Largest Coal Reserves

• India has a hard coal reserves around 255 billion tons,

of which 92 billion tons are proven

• Hard coal deposit spread over 27 major coalfields,

located mainly in Eastern and South- Central parts

• The lignite reserves stand at a level around 36 billion

tons, concentrated mainly in Tamil Nadu

Wide Range Technologies

• Steam cycle facilities (most commonly used for large utilities)

• Gas turbines (commonly used for moderate sized peaking facilities)

• Cogeneration and combined cycle facility (the combination of gas turbines or internal combustion engines with heat recovery systems)

KEY PLAYERS IN POWER MARKET

MARKET CAPITAL OF 5 COMPANIES

COMPANY MARKET CAP (NSE/Rs . Cr)

Tata power company 23,333.23

Reliance Infrastructure 13,274.42

CESC 6,593.58

Torrent Power 5,007.95

BF Utilities 2,461.58

 BHARAT FORGE LIMITED(BFL)

• The  Company  was  incorporated  on September 15, 2000 under the Companies Act, 1956

• IT  is a part of USD 2.4 

    billion Kalyani Group

• BFUL earlier operated in two

   Business segments

    Infrastructure  Business  and  Investment Business

Calcutta Electric Supply Corporation

• On 17 April 1899, the first thermal power plant of The 

Calcutta Electric Supply Corporation Limited was 

commissioned at Emambagh Lane near prince Ghat

• The company was shifted to the Victoria House in 

Dharmatala, Kolkata in 1933, and still 

     operates from this address.

Reliance infrastructure

• Reliance Energy came into existence when it took over BSES in 2002. In April 2008, Reliance Energy changed its name to Reliance Infrastructure

• The company is headed by Anil Ambani, The corporate headquarters is in Mumbai

• The company is the sole distributor of electricity to consumers in the suburbs of Mumbai. It also runs power generation, transmission and distribution

    businesses in other parts of 

    Maharastra Goa and Andhra pradesh

Torrent Power

• Torrent Power is one of the leading brands in the Indian 

power sector, promoted by torrent group.

• Torrent Power commences distribution operations in 

Agra, Uttar Pradesh effective from 1st April, 2010

• First wind power project 

     commissioned at Jamnagar.

Tata power

• Tata Power is India’s largest integrated power company with a significant international presence.

• Computerized Grid Control and Energy Management Systems.

•  Tata Power commissioned India’s first power plant- the hydro-electric station- in Khopoli (72 MW) in 1915, the second hydro station one in Bhivpuri 

    (78 MW) in 1919 and the 3rd one in  

       Bhira (300 MW) in 1922.

Porter’s Five Forces Analysis of POWER Industry

• Threat of New Entrants(Low ) High capital requirement Difficult access to distribution Highly to manage

Threat of substitute products or services(low) Power does not have substitute It can be generated from different sources of energy coal availability is limited and therefore power from nuclear, 

hydro and other renewable sources could be used as substitute for thermal power in future.

Bargaining power of customers (buyers )  Industrial consumers have huge demand for power power  Bargaining power is low Government regulates the power sector to ensure supply 

of power

Bargaining power of suppliers(high) Coal is majorly used for generation of power Coal players are in dominant position. However in present situation, the powerof suppliers is high

Competitive rivalry within the Industry(medium)

No competitive rivalry as demand for power.

Cultural With government encouragement , private

participation take advantage of huge demand of market

TOTAL ASSET TURNOVER

Definition :

Asset turnover is a financial ratio that measures the

efficiency of a company's use of its assets in generating

sales revenue or sales income to the company.

Asset Turnover = Net Sales / Total Assets

The lower the total asset turnover ratio , the more

sluggish the firm's sales.

OPERATING PROFIT MARGIN

Definition :

Operating profit margin is a measurement of what

proportion of a company's revenue is left over after

paying for variable costs of production such as wages, raw

materials, etc.

Operating profit margin = EBIT/sales *100

DEBT EQUITY RATIO

Definition:

A measure of a company's financial leverage

calculated by dividing its total liabilities by

stockholders' equity.

Debt equity ratio = Total Debt/ Equity Share Capital

PRICE-EARNINGS RATIO

Definition :A valuation ratio of a company's current share price

compared to its per-share earnings.Calculated as

P/E Ratio = Market Value per Share Earnings per Share (EPS)

Generally a high P/E ratio means that investors are anticipating higher growth in the future.