Proposal On Business Model Based on

Molten Carbonate Fuel Cell Technology

Presentation to the Board of Directors, Reliance Energy

An Educational Project as part of course on Business to Business Technology Marketing

By Prof. Saji K.B.Nair (IIM(L))

Submitted By:
Renjan Oommen
Basant Maheshwari
Sindhu Sivan
Nitish Pandey
Swaminath Adabala
Vikram Phatak
Contents

1. Abstract
2. Situational Analysis
a.
b.
c.
d.
e.

Introduction
Marketing Objectives
Technology product category threats and opportunities
Company strengths and weaknesses
Competitive Analysis

3. Generic Marketing Strategies

a. Segmenting
b. Target Segment
c. Differentiation
d. Positioning
4. Technology Marketing Plan

Situation Analysis
Introduction
Product
A fuel cell is an electrochemical energy conversion device which converts the
chemicals hydrogen and oxygen into water, and in the process it produces electricity.
The fuel cell essentially requires
hydrogen and oxygen: while the
oxygen is drawn from air, the
hydrogen is either supplied
directly or is reformed from
hydrocarbon gases such as
methane or other fuels like
ethanol and methanol. Hydrogen
and oxygen combine in the fuel
cell to produce electricity, heat
and water. There are several
different types of fuel cell but
they are all based around a
central design.
Fuel Cells as Stationary Power Plants
According to the Central Electricity Authority (CEA), India needs an additional 1,
00,000 MW at an estimated investment of nearly US$100bn to meet its power
requirements in the next 15 years. Combined with the rising interest in non-conventional
energy sources, this translates into great potential for entry of fuel cell power plants as
power generators. Given the strong agrarian economy, ethanol (from sugarcane
molasses) and methane (from biogas) are readily available as primary choices as fuels
for fuel cell plants.
While setting up of the fuel cell stack and fuel processor are significant
investments, the operation costs are much lower than conventional power generation
facilities. A typical fuel cell plant using methane as a fuel could have raw electricity
generation costs at Rs. 4-5 per kWh, which will drop down to a competitive Rs. 2-3 per
kWh after factoring reductions in price due to environmental credits, savings on
maintenance, increased reliability and use of the heat generated in the fuel cell process.
The Most Promising Fuel Cell - Molten Carbonate Fuel Cell Technology (MCFC)
Molten carbonate fuel cells are designed to operate at higher temperatures than
phosphoric acid or proton exchange membrane fuel cells and thus achieve higher fuelto-electricity and overall energy use efficiencies (50%) than these low temperature cells
(37-42%). When the waste heat is captured and used, overall thermal efficiencies can be
as high as 85%. Conventional modes come no where near these figures.

Type
Alkaline Fuel Cell
(AFC)
Proton Exchange
Membrane Fuel Cell
(PEMFC)
Phosphoric Acid Fuel
Cell (PAFC)
Molten Carbonate
Fuel Cell (MCFC)
Solid Oxide Fuel Cell
(SOFC)

Operating Electrolyte Typical Application

Template
Unit Size
70-90
KOH
1-100
Space and Military
50-80

Polymeric
Membrane

0.1-500

Residential, Portable
and Transportation

160-210

OrthoPhosphoric

5-200

650

Molten
Carbonate
Zirconia

Dispersed Power, Acid

Combined Heat &
Power (CHP)
Central Utilities

1002,000
25Central Utilities
1,00,000

800-1000

In a molten carbonate fuel cell, the electrolyte is made up of lithium-potassium

carbonate salts heated to about 1,200 degrees Fahrenheit (650 degrees Celsius). At
these temperatures, the salts melt into a molten state that can conduct charged particles,
called ions, between two porous electrodes.
Moreover, MCFCs eliminate the external fuel processors that other lower
temperature fuel cells need to extract hydrogen from the fuel. When natural gas is the
fuel, methane (the main ingredient of natural gas) and steam are converted into a
hydrogen-rich gas inside the fuel cell stack (a process called "internal reforming"). At the
anode, hydrogen reacts with the carbonate ions to produce water, carbon dioxide, and
electrons. The electrons travel through an external circuit creating electricity and return to
the cathode. There, oxygen from the air and carbon dioxide recycled from the anode
react with the electrons to form carbonate ions that replenish the electrolyte and provide
ionic conduction through the electrolyte, completing the circuit. The electrolyte in this fuel
cell is a salt melting of combined alkali carbonates (Li2CO3 / K2CO3).
Unique Selling Proposition
This report looks at Fuel Cells as Stationary Power Plants, the markets in detail
and presents the unique selling propositions of this fuel cell technology. The USPs are:

Environment benefits because of no combustion

Flexibility in the types of fuels that can be used with fuel cell technology

Relieves the reliance on existing natural resources used for energy

consumption

Higher quality of power and energy efficient

Safe, quiet, and reliable

Fuel cells can run continuously for long periods of time before servicing is
required

Fuel cells are also able to respond fast to load changes, because the
electricity is generated by a chemical reaction.

Choice of Company
Reliance Energy Ltd is India's leading integrated power utility company in the
private sector. It has a significant presence in generation, transmission and distribution of
power in Maharashtra, Goa and Andhra Pradesh. It distributes over 5,000 MW of power the largest in the country.
Reliance Energy is in the process of commissioning / execution of 2 x 250 MW
Tau Devilal Thermal Power Station at Panipat, Haryana and 2 x 210 MW Parichha
Thermal Power Station at Parichha, U.P. Also it will be setting the worlds largest 8000
MW gas based power project in Ghaziabad, district of UP by 2008 using gas from
Krishna Godavari basin.
With large scale involvement in power sector Reliance Energy has the
advantage/potential to enter renewable energy sector using Fuel Cell technology, as it is
the most promising renewable source of energy. Moreover the company will have the
first mover advantage as well as it can utilize the sops being provided by GOI.
Marketing Objectives
The business objective of the product launch is to test the installation and
exploitation of this technology at a township scale so that in next 6 years this can be a
preferred source of technology India and that Reliance energy is the giant in an
oligopolistic setting of fuel cell providers. Other objective is that as a spin off Reliance
Energy can look forward to export to SAARC and SAFTA countries.
In order to achieve the objectives within the Indian subcontinent by 2012 the
marketing objective is to market Fuel Cell technology on a turnkey basis for increasing
their market share in power generation area and to position this as a product of choice or
a business opportunity in areas suffering from power shortage.
Technology Product Category Threats and Opportunities
Threats
Renewable i.e solar, wind and hydel as well non-renewable i.e thermal, and
nuclear sources of power generation
Opportunities
(a) India is a power-starved country. According to the Central Electricity Authority (CEA),
India needs an additional 1,00,000 MW at an estimated investment of nearly US$100bn
to meet its power requirements in the next 15 years. The grid quality electricity
generation through fuel cell technology on a decentralized manner can be of immense
help to the country.
(b) Disadvantages of non - renewable sources of energy i.e pollution leading to
climatic changes due to ozone layer depletion. It is estimated that the world-wide
emissions of greenhouse gases will have doubled by 2030

.(c)Storage problem and non-availability of 24X7X365 hours of renewable sources of

energy i.e solar, wind, tidal, geothermal and hydel.
(d)High risk and prohibitive cost in the usage of nuclear energy due to non- renewable
nature of uranium, waste disposal issues.
Companys Strength & Weakness
Strength
Reliance Energy has earned a net profit of Rs 367 crores due to increase in
sales.It ranks third among the Indian private sector companies in terms of net
worth.The company distributed nearly 16,000 million units of power to over 5 million
consumers in Mumbai, Delhi, Orissa and Goa, across an area covering 1,24,300 sq.
kms. It generates 941 MW of power, through its power plants located in Maharashtra,
Andhra Pradesh, Kerala, Karnataka and Goa.It will be setting up the world largest gas
based power 8,000 MW project at Ghaziabad district in UP by 2008.
Weakness
Reliance Energy is yet to venture into renewable energy sector and therefore the
company will require to go in for transfer of technology from indigenous or foreign
sources.
Companys Threats and Opportunities
Threats
(a) The new liberal energy policy of GOI and State Governements is leading
to more and more companies jumping into generation of power. For example:
(i) In UP, the Birla Group and GVK industries, Hyderabad are setting up
power plants at Shahjahanpur and Srinagar respectively.
(ii) The sugar factories are entering into cogeneration leading to sale of
excess power to local grid i.e UP, MP & AP.
(b) Even MNC have evinced interest in entering Indian power sector.
Opportunities
(a) Large deficit in power in the country ,around 1,00,000 MW provides Reliance Energy
to enter into power generation all over the country,
(b) GOI resolve to enhance installed capacity of renewable energy in India from 2,000 to
12,000 MW by the year 2012 with offer of benefits / incentives to Indian industry,
(c) First mover advantage and
(d) Possibility of technology being available at home from Bharat Heavy Electrical
Limited (Hyderabad), Central Electrochemical Research Institute, Karaikudi,
Chennai,Central glass and Ceramic Research Institute, Kolkatta, Indian institute of
Chemical technology, Hyderabad and Indian Institute of Science, Bangalore., IIT , Delhi,
Kharagpur and Chennai., National Chemical Laboratory, Pune, SPIC Science
Foundation, Chennai and Tata Energy Research Institute, Pune/New Delhi and
University of Rajasthan, Jaipur.

Competitive Analysis
Barriers to Entry
The large deficit in power provides opportunity to new players to enter Indian
power generation market. The only barrier is the huge capital investment required in the
power sector. Players maybe willing but not many have access to the know how - a
barrier to some extent.
Bargaining Power of Customers
The costumers do not have bargaining power due to huge
availability and due to the monopoly setting at least for next 3 years.

deficit in power

Bargaining Power of Suppliers

Since fuel cell technology is the heart of power generation therefore, both Indian
and foreign technology suppliers can leverage this advantage for getting the best return
for technology transfer.
Threat of Competitors
There is no threat from competitors because there is enough space for all
players and also Reliance Energy has the First Movers advantage.
Threat of Substitutes
Though there are substitutes of both renewable and non-renewable sources of
energy, however, they pose no threat mainly due to huge deficit in power availability. The
limited availability of non-renewable resources i.e fossil fuels, Uranium etc and storage
as well as round the clock non-availability problems of renewable sources energy i.e
Wind, Solar, Tidal and Hydel work in favour of this Technology.
Segmentation, Target Segment Selection, Differentiation & Positioning
Customer Benefit Enumeration
There are 3 important dimensions of benefits identified namely cogeneration
(heat & power simultaneous production and use), use of such installations as a business
model for power generation and distribution and last as captive power plant units for
value adding to commercial complexes or townships development by realtors. These are
briefly explained next.
Cogeneration
Many commercial and industrial activities have a simultaneous need for power
and for heating or cooling to operate their processes, store their products and maintain
comfortable working conditions for employees. To achieve this they would conventionally
source electricity from a distribution company from remote, large power stations through
an extensive and expensive, high voltage transmission and low voltage distribution
network. Heating could also be supplied by electricity or by on-site fuel combustion in a
boiler, raising steam.

Alternatively, a local COGENERATION scheme could be used whereby useful

heat and power is produced sequentially from the same energy source. Cogeneration
schemes need to be tailored to the particular user demands and considerable
professional expertise is needed to understand and meet all requirements in a
satisfactory way.
Over recent years, there has been resurgence in interest in cogeneration, driven by:

significant advances in the efficiency, reliability and cost of gas turbines

the widespread availability of natural gas fuel at decreasing prices in real terms;
privatisation and liberalisation of electricity generation and distribution activities,
leading to tariff structures more closely reflecting costs;
the relentless search in industry for improved efficiencies as a means to improved
competitiveness;

OPPORTUNITIES FOR COGENERATION

There is an opportunity for Cogeneration when there is a simultaneous requirement for
power and heat. Modern schemes can have considerable flexibility in the ratio of power
to heat provided and may be configured to meet the usual electrical load requirement with supplementary and standby power from the grid, and with supplementary heat from
additional boilers.
Meeting the cyclic demands of large batch processes is awkward - cogeneration sits
most comfortably with continuous processes or activities with relatively steady demands.
Captive Cheaper, Reliable, Noise Free & Environment Friendly Power Packs
The economic growth and that of the population are putting huge pressure on the
already tottering electricity grid. Townships and towers of concrete are being built but
utilities like electricity and water are becoming critical evaluation parameters. Fuel cells
provide an alternate efficient, nonpolluting power source that produces no noise and has
no moving parts. With falling prices and new technologies suggest that the fuel cell's day
may finally have arrived. Fuel cells are capable of converting 40% of the available fuel to
electricity. This can be raised to 80% with heat recovery. The fuel cell itself has no
moving parts, offering a quiet and reliable source of power.
Fuel cell system efficiency is independent of the rated power above 100 kW,
unlike oil, gas or coal burning power plants, where the efficiency is constant only at the
megawatt power level. Even at the 40% of the rated load, a fuel cell has almost the same
efficiency as that of the full load. Fuel cells are also able to respond fast to load changes,
because the electricity is generated by a chemical reaction.
Generation & Distribution
It is a well known that India is amongst the fastest growing economies in the
world. This coupled with corruption seen in last 58 years of independence have
accentuated the gap between the required and supplied power. This thus provides
opportunity to huge capital entities to rush into power generation and distribution.
However, conventionally, electricity is supplied by a distribution company from remote,
large power stations through an extensive and expensive, high voltage transmission and
low voltage distribution network. This has kept this field a precinct of a few. This is now

set to change with the ease and speed of implementation of MCFC based power
generation plants. Consider the following facets:

the huge size of new coal-fired base load generating plant and long project lead
times, coupled with uncertain future demand, creating space for mid-sized
generators with relatively short project times;
BHEL (Hyderabad) is working on developing PAFC and MCFC for distributed
power generation and also focuses on preparing catalyst and fuel reformer to be
used in fuel cell power plants. They have demonstrated some distributed power
systems.

TERI is working on MCFC stack development for power generation and

procedure for making electrodes, electrolyte tapes and electrolyte carriers

In India Fuel Cell Program is largely supported by Government.

----------Need/Benefit Significance Plot---------

Based on the Need Plot we were able to estimate the most significant needs. The larger
segment is looking for Generation and Distribution and for providing Captive Power units.
Now we analysed the potential users looking for these benefits for following
characteristics:
Region
o UP
o North
o South
o East
o Central

 Type

o Western

o Factory
o Realtor
o Power Business Venture
Consumption Size (Continuous Value)
Target Segment (Size Calculation):
To select the target segment there were 2 important considerations, one that our
product cum service would meet that benefit and second that the segment would allow
us to move towards our stated business objective.
As far as being able to fulfilling the need is concerned the potential product line from
Ballard Inc. USA is capable of setting of large generation and distribution plants as well
as medium to small captive power units for townships.
Hence the criteria for segment selection now depends only on the segments
ability to support our stated business objective of cash return in 12 years period.
Considering the following parameters:
Investment ceiling of Rs 1000 Crores
Captive Production Investment requirement: 836 Crores
Generation & Distribution Investment requirement: 846 Crores
Estimated IRR from Captive would be in the order of 11.34%
Estimated IRR from the Generation & Distribution entities it would
be 17.23%.
Number of customers in each segment in year 1 thru 5.
To arrive at our segment we need to evaluate each of our segment data (for
either of the 2 populous benefits viz. generation and distribution and captive power) on
visible characteristics. The graphical plot of same is shown below.

----------------Population Plot for Captive Plant Users------------------

---------- Population Plot for Generation & Distribution -------------

Thereafter we arrived at best estimate number of users in each benefit setting to

enable us profitable returns. While above plots are of the snap shot of latent demand at
this point of time, through other data we have also estimated the growth of demand for
several promising segments. Some of the segments that were considered were (UP,
Power business, consumption), (UP+East, Realtors, Consumption), (Northern, Factory,
Consumption). After selecting the top 6 of the over 108 segment in each benefit setting
the exercise involved was that of plotting the demand projection in each segment. The

segment selection was not merely based on size and financial returns but also on the
mature spectrum of the MCFC technology.
From this exercise it emerged that the best return would be from the following
need segment- Setting up of Power Generation & Generation Units and the visible
characteristics of the targeted customers would be the following:

Existing or potential Power Business Entities

Their Business is targeted to business areas in UP/East

Their consumption size is more than 100 MW and less than 250 MW.

Differentiation
Reliance Energy is the pioneer in this technology in the context of India. Thus the
requirement to differentiate is very easily achieved. Yet in keeping with the existing
position of the corporate image the product needs to be have features, reliability,
durability, service, utility etc. of the highest order. Toward that effect Reliance Energy is
achieving this by sourcing the technology from one of the foremost companies in this
field. The differentiation will assist the company in the following:

Achieving its optimistic growth in customers

Establishing strong barrier to entry

Scoring over wind mills or solar energy by prospects considering captive

power plants
The marketing efforts, collaborations design specification or otherwise are to ensure the
following:The product will have a greater reliability factor as compared to existing power
sources

The utitlity of the product will not be dependent on the weather

The product will not be targeted in geographical regions rated excellent for
setting up of windmill farms

The customers will get 24X7 service and a response time of 4 hours anywhere.
We will need repair teams standby using choppers for high speed and immediate
travel as and when required. The end user should feel comfortable being served
power from a product backed by Reliance Energy.

Positioning
As an extension of the philosophy of differentiation the MCFC plants will be
positioned as state of art technology that is more than just another power source. It is a
competition not to thermal, solar or windmill energy but to the Nuclear power. It is to be
positioned as a modern or even ahead of its time technology adoption of which not only
signifies a cool flow of electricity but a blow to the belief that power cannot be got without
damaging or risking our environment. Espousal of this technology will be made to signify
as having concern for the community and the delicate state of our ecological balance.

For those more inclined to financial aspects of business, the aspect of environment
carbon credit benefits will be highlighted.
There being no other competitor in this segment we did not need to consider
perceptual mapping.
Marketing Plan

Technology Acquisition By Transfer

Research in Fuel Cell technology is in progress in India and few prototypes are
fully operational and running in India by BHEL. Intensive research is being carried out at
TERI(Tata Energy Research Institute) and they already posses the required technology
to produce a MCFC based power generation unit. Since the technology is already
available in India, it is planned to acquire the technology by licence transfer for a period
of 05 years. Following are the additional reasons for transfer of technology
a)
High cost involved in developing the technology and sourcing it from
outside India
b)

Lack of technical expertise in the field

c)

Easy availability proven technology in the Indian market

This decision can be of immense gain to the company in terms of almost nil/low R&D
investment required, Quick to get into use and Low technical and financial risks in the
transfer. In addition, this helps in developing a competitive advantage for the company in
the market.
Since Reliance is already into power generation and distribution in a large scale,
with enough capital and capacity to survive in the market by its own, it required a reliable
source of proven technical know-how to foray into the new area of customised power
generation market. Therefore licensing is the most fitting mechanisms for technology
transfer for the company under the given conditions and would prove more beneficial to
them by adding a new product to the existing business lines.

New Product Development

Companies need to grow their revenue over time by developing new products
and expanding into new markets. New product development shapes the companys
future and helps in venturing into newer markets with a radical solutions to the never
ending needs of the customers. Though NPD is an attractive proposition, it can at the
same time be quite risky. New products continue to fail for many reasons such as
,ignoring or misinterpreting market research; overestimating market size; high
development cost; poor design; incorrect positioning; ineffective advertising or wrong
pricing and also insufficient distribution support. Few difficulties which could be faced by
the company in developing the product out of MCFC technology at NPD decision
process level which can pose a challenging situations for development are as follows.

Cost Of Development:
The Company has to generate many ideas to find one worthy of product
development and often faces high R&D, manufacturing and marketing cost. The concept
testing, prototype development and test marketing processes would consume a large
amount of money. Since the market gap for power in India is phenomenally high and
MCFC being a newer and better technology conforming to the environmental standards it
has a got a greater potential for success and capability in absorbing the cost involved in
development
Social and Governmental Constraints:
Though MCFCs are relatively larger, highly exothermic and corrosive in nature
(up to certain extent) its interaction with the environment is minimal due to close system
concepts and therefore the fear of safety hazards is minimal
Fragmented market:
Companies with newer products aim for a smaller market segment and for High
technology products scope is further limited. But in case of this product this issue is not
of great concern view wide gap in demand supply in the Indian power sector market.
Idea Screening:
The purpose of idea screening is to drop poor ideas as early as possible .The
rationale is that product development cost rise substantially with each successive
development stage especially with such capital intensive project. Secondly if an idea is
allowed to move into the next stage, product failure can occur at a later stage which
could colossal financial damages. The basic risks can be reduced by formation of a
competent idea screening team with a very high idea screening ratio. Since the item is
customised and fewer products are made, alteration at a later stage can undertaken
without completely withdrawing the product from the market.

Marketing Strategy:
Whilst preparing a preliminary strategic plan for introducing a new product into
the market, the market size, structure and positioning are to carried out for the product.
Long term sales and profit goals of the product have been studied and it has been
planned to position the product as power generation plant with zero emission
standards.
Business Analysis
Extraction of Costs and Profits:
Costs are estimated by R&D, manufacturing,
marketing and finance departments. The challenge behind developing the complete cost
is the need to understand the variables involved in making it. Large amount of estimation
and assumptions such as market growth rate, companys market share, and factory
realized prices, anticipatory development cost, market research cost and promotions for

the entire period of the product life cycle etc were considered for arriving at a valid
measure of the cost of the product.

Market testing:
The extent of market testing required by the product is dictated by the investment cost
and risk on one side and the time pressure and research cost on the other side. MCFC
being a High investment technology product , it must be compulsorily market tested and
the cost of the market test will be an insignificant percentage of the total project cost.
Vendors must be careful in interpreting beta results because only a small no of test
customers are being used ,who are randomly drawn and the test are somewhat
customised to each site because of the risk that the customers who are unimpressed
with the product may leak unfavourable reports about the product at an early stage of the
launch.
Commercialization:
Two major factors that are to be factored in during commercialisation of MCFC are as
follows:
Size of the Power Plant
Since the sales and profit were arrived at based on various valid assumptions
and the product and market being new , defining the plant size would be critical decision
at this stage of product development. Moreover this being a customized product, the best
way to counter the risk would be to start producing on a low volume /made to order and
then increase the scale based on the market feed back.
Timing
In commercializing a new product, a market entry timing is critical. The first firm
entering the market enjoys the first movers advantage of locking up the key customers
and gaining leadership. But if the product is rushed to the market before it is thoroughly
debugged, the first entry can backfire. Since Reliance being a established player in the
power market with enough financial muscle power any unfortunate setbacks during the
initial period can be easily absorbed by them.
The product is being targeted to the existing and best prospectus customers,
presumably who would really have the ability to become early adopters, heavy users and
opinion leaders in the power industry and the market. The main aim is to attract strong
sales as soon as possible to get an early start in this new venture. The already existing
market leadership of the company in the existing power markers can be testimony for
marketing the new product. A critical path scheduling of the activities in launching the
product would help in achieving the goal in the least possible time.

Marketing Communication

Business to Business marketing communication budget is usually not a large as the

budget set for consumer goods. Direct marketing (Personal selling), Sales promotion

,Advertising and Public relations are the few modes by which this product can be
marketed .
Direct Marketing(Personal Selling) : This is the most effective tool of the buying process
of high technology products, particularly in building up buyer preference, conviction and
action. This is primarily because of the nature of the product and the target market aimed
at selling the product. Since the no of customers are very small there exist an immediate
and interactive relationship between technology buyer and the seller. The seller has to
develop a kind of relationship deep and long term enough to influence the buyer for not
only the present product but also the variants which may be produced at a later stage in
the technology life cycle. Such relationship are generally strategic in nature .
Advertising : Advertising can be used to build a long-term image for a product or trigger
quick sales. Advertising can efficiently reach geographically dispersed buyers and certain
forms of advertising (TV) can require a large budget, whereas other forms (newspaper) do
not. Just the presence of advertising might have an effect on sales. Large-scale advertising
says something positive about the sellers size, power and success.
Public Relations and Publicity:
Marketers tend to under sue public relations, yet a
well-thought program coordinated with the other communications-mix elements can be
extremely effective. The appeal of the public relations and publicity can lead to high
credibility , ability to catch buyers off guard and dramatize to an extent about the product.
Sales Promotion :
Companies use sales promotion tools to gain attention and may
lead the consumer to the product. They incorporate some concession, inducement, or
contribution that gives value to the consumer. Sales promotion can be used for short-run
effects such as to highlight product offers and boost sagging sales.

RELIANCE ENERGY - INCOME EXPENDITURE STATEMEN

Cost(Crores)

Purpose
Expenditure Initial Investment
Technology Transfer for a period of 5years
Cost of Manufacturing of Fuel Cell generators
Total Initial Investment

Cost Per Year

Cost of Technology per year
Cost of Manufacturing Of Fuel Cell Generators

100
900
1000
20
900

Total Cost Incurred in a year

Income

920 (A

Selling Price

930.4 (B

Profit (B-A)

10.4

Type of generators
KW
Cost @ Rs 2.25 Lacs /KW
1000

C
L

No of Plants
250
100

1
6
15

Assumptions: (a) 1,6 and 15 generators of

1000, 250 and 100 KW rating
generators respectively will be
sold to customers per year.
(b) The technology transfer for a
period of 5 years, thereafter
a fresh contract will have to be
signed for use of technology.

COST JUSTIFICATION FOR RELIANCE ENERGY CUSTOMER

Purchase price of 100 KW Fuel Cell Generator
Cost of generator per year presuming the generator to last 15 years

24.75 L
1.65 La

Apportioned Cost of generator lacs per year

Annual of Cost of Maintenance (Rs 1000 per KW)
Annual Operating Cost
Total cost per year (A)

1.65 La
1.00 La
8.23 La
10.88 L
(0.6X1
efficie
mainte
A/B

Power Generated in a year by 100 KW generator (B)

Cost KWhr