Indian Power Industry

by KASHIF KALIM RACHIT DHALL TANUJ VIR MAYANK CHATURVEDI NIRBHAY TANEJA

Indian Power Industry

Introduction
5th largest electricity generation capacity 6th largest consumer accounting for 3.4% of global energy consumption Grown 3.6 % p.a over the past 30 years

Players in power sector

31% State utility 48%

Private utility
Central utility

21%

Report of Central Electricity Authority 31-03-2011

Indian Power Sector

One of the most diversified in the word
1% 2% 11% Coal

2010-11 4.9 % 2011-12 9.2 % 2012-13 9.3 %

10%

Hydro Gas Nuclear 55%

Diesel
Renewable

21%

End of Aug 2011 Total 99503 MW

Porters Five Forces Analysis

Potential Entrants

(Low)

Supplier
(supplier power)

Buyers

Industry Rivalry
(Medium)

(Buyer Power)

(High)

(Medium)

Substitutes (Medium)

Potential Entrants (LOW)

Highly capital Intensive Behemoth like NTPC, SEBs contributing around 85% of total power produced Reliance power, Adani power, Lanco etc entrer sector after market opened up for private sector through Electricity Act 2003 However obtaining regulatory approvals, fuel linkages, land etc still remain the major hindrance Hence the threat of new entrant appears to be low

Threat of substitute products or services (Medium)

Power does not have substitute but it can be generated from different sources of energy Currently thermal power is dominant in India, coal being the major raw material Coal availability is limited & therefore power from nuclear, hydro, and other renewable sources could be used as substitute for thermal power in future Although, demand for power exceeds its supply , thermal power plant companies have threat from non thermal power generators Hence the threat of substitute product s is medium

Buyers Power (Medium)

Industrial consumers have huge demand for power Their bargaining power is Low in India as the number of companies to buy from is limited in number. Hence power companies are in better position Retail customers- Government regulates the power sector to ensure supply of power at reasonable prices but this regulation is limited Peak shortage is much more in every region & it is about 12% on all India basis which allows suppliers to dictate terms with buyer Overall, the bargaining power of buyers is Medium

Power of supplier (High)

Coal is majorly used as a feed for generating powers The supply of coal is limited in India & hence coal suppliers are in dominant position Import of coal is an expensive affair Hence power of supplier is high

Intensity of competitive rivalry with in Industry (Medium)

Power Producing companies No competitive rivalry as demand for power is way above its supply However, with government encouragement , private participation is expected to increase in the coming years to take advantage of huge demand-supply gap Power equipment market- Market leaders like BHEL is facing tough competition from L&T, Alstom, Doosan and most importantly chinese suppliers. So overall the intensity of competitive rivalry is medium

References
Planning commission report on power sector http://planningcommission.nic.in/aboutus/co mmittee/wrkgrp12/wg_power1904.pdf Ministry of power, Government of India http://www.powermin.nic.in

THANK YOU