GENESIS 09

Institute: Faculty of Management Studies,

Delhi
Team Name: Think Tank

Members: Gaurav Kumar Sharma

Divyanshu Dikshit
Anurag Binani
Sandeep Kanan
Gaurav Mittal
Team Coordinator: Gaurav Kumar Sharma
E-mail ID: gaurav.k10@fms.edu
Contact Number: 09717864652

TOP 5 KEY FEATURES OF THE IDEA

 • Separate detailed plan for Rural and Urban areas as these differ markedly in the approach
that needs to be followed for engaging them; and separate long-term and short-term plans
• Suggested plan recognizes the existing institutional structure of the energy sector and
defines a transition strategy for performing in the present scenario as well as in case of
progressive reforms
• Number of suggestions for pursuing energy efficiency and energy conservation as these
are the most important virtual sources of domestic energy
• Emphasis on new, unexplored and abundantly available energy sources in India like coal-
gasification, bio-fuels, gas-hydrates, off-shore wind power, fusion, tidal and wave energy
etc. apart from the more popular ones like hydro, nuclear and solar
• Policy recommendations for operating in Power Sector, Coal Sector, Oil and Gas Sector,
Demand Side Management, Conventional and Non-conventional sources of energy.

1. KEY ELEMENTS OF THE BUSINESS MODEL

The broad vision behind the plan is to reliably meet the demand for energy services of all sectors
including the lifeline energy needs of vulnerable households in all parts of the country with safe,
clean and convenient energy at the least-cost. This has been tried to be done in a technically
efficient, economically viable and environmentally sustainable manner using different fuels and
forms of energy, conventional and non-conventional, as well as new and emerging energy
sources to ensure supply at all times with a prescribed confidence level.
Based on the data provided by the government of India, a detailed analysis of the total energy
requirements of the country in the next few years was done. This was followed by an
approximation of the electricity required to be generated within the next few years.
An estimate of the different supply options shows that we are constrained by India’s natural
energy resources and import possibilities. Reserves of oil, gas and Uranium are meager though
we have large reserves of thorium. While coal is abundant, it is regionally concentrated and is of
low calorie and high ash content, though it has the advantage of low sulphur content. The
extractable reserves, based on current extraction technology, remain limited. Hydro potential is
significant, but small compared to our needs and its contribution in terms of energy is likely to
remain small. Further, the need to mitigate environmental and social impact of storage schemes
often delays hydro development thereby causing huge cost overruns.
Coal based energy
– Covering all coal bearing areas with detailed drilling could make a significant difference
to the total extractions.
 – In-situ coal gasification can significantly increase the extractable energy from India’s vast
in-place coal reserves. This is so because in-situ coal gasification can tap energy from
coal reserves that cannot be extracted economically based on available open cast/
underground extraction technologies.
Oil and Gas based energy
– India’s supply strategy while stepping up oil exploration should not rely on the possibility
of finding oil domestically. So, it would be wise to have a partnership with a foreign
entity for providing high-grade fuel for producing energy in India. Certain partners have
been identified for the purpose.
Hydro-Power
– India’s hydel resources are estimated to be 84,000 MW at 60% load factor. So use of
small hydel plants (size <25 MW) may be justified given the available potential
hydroelectric energy. All new projects should be designed with this objective in mind.
Such a strategy would ensure that hydro is maximally used for meeting peak loads.
Undeveloped hydro potential is mainly concentrated in the North East, Himachal and
Uttaranchal. In addition there are possibilities of importing hydropower from Nepal and
Bhutan.
Similarly, other supply side options have been explored in detail and a proper plan for
harnessing the energy from them has been proposed.
Simultaneously, a major stress must be laid on energy efficiency and conservation, with
particular emphasis on efficiency of electricity generation, transmission, distribution and end-
use. This issue has been tackled in great depth and methods have been suggested for improving
the efficiency of energy extraction and usage from almost all the major sources of energy.
The Carbon Emissions, which will play a major role in defining any future policy on energy,
have also been extensively dealt with as part of the analysis.
The Investment needed for implementing the energy recommendations has also been calculated
in the form of an elaborate financial model.
Recommendations have also been made for substituting imported energy with different domestic
alternatives for cutting down the costs. At the same time diversification of supply sources has
been dealt with in great detail.
Alternative energy sources’ role in shaping the future Indian energy scenario has been realized
and appropriately discussed. The new sources that have been included in the plan include Wind
Energy, Gas-hydrates, Biomass and Bio-fuels, coal gasification etc.
Steps have also been suggested for ensuring energy security for the poor sections of the
society.
All the plans have been developed separately for rural and urban areas as these two differ widely
in their requirements and the methods by which those requirements can be met.

2. VALUE PROPOSITION OF THE IDEA

3. MARKET ANALYSIS AND CRITICAL CUSTOMERS

The market for the industry is expected to be one full of intense competition and likely to be
dictated by cost considerations. If one does the Porter Five Force analysis for the industry we
will have the following results:

Critical customers are the different state electricity boards who will have to be tied up with or
taken into confidence before going ahead with any energy or power project.

4. GOVERNMENT BUSINESS STRATEGY

The government needs to be treated as an extremely important stakeholder and needs to be
engaged on a consistent basis. It would be great for the business if a tie-up can be made wherein
the government promises to buy X number of units from the production and distributes it through
the existing energy supply infrastructure.

5. TECHNICAL AND ECONOMIC FEASIBILITY

The plan is technically feasible as it uses the existing technology for implementing it and needs
no great advancements in the next few years as far as implementation feasibility is concerned.
Economically, it makes great sense as the sources that have been explored have been known to
produce reap rewards for the supplier as well as the customer if used in an efficient manner as
has been suggested in the plan.

6. MARKETING AND FINANCIAL STRATEGY

With the authority to distribute power projects likely to be totally in government hands, the
immediate strategy should be to engage the government on a constant basis and let them know of
the policies being followed as part of the plan for energy and environment conservation as these
might turn out to be competitive advantages in the industry.
The financial strategy is the one based on a consumer base as the margins in this case are likely
to be capped by the government of India policies. Economies of scale nonetheless promise to
yield huge profits for the company and abundant power for the company.
 7. SWOT ANALYSIS
Strengths:
1. Separate plan for rural and urban areas which ensures their implement ability in the
Indian context.
2. Separate log-term and short-term plans which will ensure a vision is there to act as the
guiding principles.
3. The progressive policies by the government are anticipated and provisions have been
made for the plan of action in case of reforms as well as status quo.
4. Policy recommendations for operating in Power Sector, Coal Sector, Oil and Gas Sector,
Demand Side Management, Conventional and Non-conventional sources of energy.
5. Scaling up is easy if the expansion is done along the given lines.
6. Emphasis on green technology for power generation acts as a source of competitive
advantage. Also, issue related to carbon release has been tackled in detail.
Weakness:
1. In the absence of progressive reforms, the plan may not be able to reap the kind of
dividends expected.
2. The plan is highly capital intensive and will take some time before breakeven is reached.
Opportunity:
1. A rapid reform process by the newly elected government will have a very positive
influence on the overall promise held by the plan.
2. The recent trend in emphasis on renewable sources bodes well for the plan as it is highly
dependent on renewable sources.
Threat:
1. Continual of current unprogressive power sector policies by the Indian government.