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Day: February 25, 2009

India’s Power Generation capacity is 147403 MW…Deficit is 20000 MW

As of December 2008,the Central Electricity Authority (CEA) reports that India’s Power Generation Capacity is 147402.81 MW,up 8651 MW from 2007…India continues to reman a power deficit country…Current Deficit is 20000 MW

NTPC,a leading PSU, is the biggest  generator with 28333.99 MW from the Eleven Central Sector PSUs…It may be recalled that Reliance Power,in the Private Sector, has plans to generate 28000 MW by 2016…By Then NTPC capacity would have surged pass 65000 MW

The Eleventh Five Year Plan 2007-2012 has a revised planned creation of 92000 MW…But with India targeting high single digit GDP Growth Rate over the next several years,the demand for power too will surge…It will be only in the Twelth Five Year Plan 2012-2017 that the power demand and supply curve will cross

Mckinsey in their report ‘Powering India-Road to 2017’ estimates that the Power Demand  will be 335000 MW in 2017 …Interestingly last year,amidst great controversy and opposition .both in India and in USA,both countries signed a Nuclear Treaty to facilitate purchase of Uranium by India and setting up of Nuclear Reactors for Civil Purposes  

The Breakup on various parameters of India’s Installed Power Generating Capacity of 147402.81 MW makes interesting reading

INDIA‘S INSTALLED POWER GENERATING CAPACITY OF 147402.81 MW AT DEC 2008

By Mode

By Sectors

By State

Feed

MW

%

Sector

MW

%

State

MW

%

Coal

77458.88

52.55

State/UT

76185.57

51.69

Mah

10563.54

7.17

Gas

14734.01

10

Andhra P

7370.16

5

Diesel

1199.75

0.81

Central PSUs

48970.99

33.22

Karnataka

5838.52

3.96

Nuclear

4120

2.80

West Ben

5808.56

3.94

Hydro

36647.76

24.86

Private

22246.25

15.09

Gujarat

5701.30

3.87

Renewable

13242.41

8.98

Others

112120.73

76.06

 

147402.81

100

 

147402.81

100

 

147402.81

100

 Some Observations

  • Thermal Power Generation is 2/3 rds of the Capacity
  • Hydro Power Generation is 1/4 th of the Capacity 
  • Coal Based Plants at 52% are over half the Capacity
  • Much Hyped Mode…Nuclear Power plants currently contribute less than 3% of Capacity…even with the implementation of the controversial Indo -USA Nuclear Treaty,this percentage will only marginally go up to @ 5% in the next Ten years
  • Renewal Sources contribute under 10% of Capacity currently…There is great potential to increase this percentage to reduce dependency on Coal,Oil and Gas Sources 
  • 85% of Capacity is from the Public Sector
  • The role of the Private Sector may assume more focus and it may contribute more in the future than the current 15% to Capacity 
  • Of 28 States and 7 Union Territories,Maharashtra leads with over 7% of Capacity

An additional capacity of only 8651 MW was created in 2008…To achieve Five Year Plan Targets,the incremental annual capacities should be close to 18500 MW…otherwise it may take much longer than 2017 for the demand/supply curve to cross

Major Constraints in Developing the Power Generation Capacities have been

  • Government Equipment Procurement Procedures 
  • Project Implementation Delays
  • Saturation in Capacities of Engineering Companies in Setting up of Power Plant Infrastructure and delays in their increasing their Capacities
  • Delay in Allotment and Development of Coal Mines…largely on account of delays in land acquisitions and in obtaining government clearances and  multiple mine allottees for the same mine
  • States Dominating the Distribution of Power…State Electricity Board ( SEB) Losses are legendary…it impedes the State’s capability to invest further to augment existing capacities and also discourages Private Investors from providing Capital to do so….Distribution Losses are reportedly a criminal 40% of generated and transmitted Power

If India has to Grow to be one of the top Three World Economies in the next Two decades,as is expected, Power Capacities have to scale up significantly and fast…Government is well aware of this and has been introducing Power Reforms…The Electricity Act of 2003,CERC,Exchanges for Power Trading,Privatisation to highlight a few

Despite constraints,some  due to  coalition politics,the Power Sector has the Power to  create  Multifold Gains for those who invest in this sector as a Business or even  just as an Investor…but these will play out over the Long Term…Ten Years and Beyond

Consider three Listed PSU Power Plays for your Long Term Portfolio…BHEL,NTPC and PTC…You’ll get an opportunity to buy these at Distress Prices when the Sensex follows further DOW Declines and seeks even lower levels  from 8900 levels today         read more

Ernst & Young did Maytas Properties Valuation of Rs 6523 crs in just one Day !?

Just read a very interesting update on Maytas Properties in todays’ edition of Financial Express

Maytas Properties is facing the prospects of the Government taking it over the Board,just as they did for Satyam

The matter was being heard by the Company Law Board (CLB) and the company’s counsel suggested that the Government could appoint an observer or a Director on the Board…This was opposed by the Deputy Director,who represented the Government…He wants the Government to take over the Whole Board and thus the Company itself.

The Deputy Director made some interesting arguments on the Ernst & Young (E & Y) Valuation of Rs 6523 crs of Maytas Properties

  • There was a clear nexus between Father,Ramalinga Raju of Satyam, and Son,B Rama Raju,of Maytas Properties as they had relied on the E & Y Valuation to justify Satyam’s Proposal to takeover Maytas
  • This Valuation is Hollow as Maytas,as per government knowledge, has no land bank and has just a turnover of Rs 22 crs but the valuation was done at Rs 6523 crs
  • Government Alleges Fraud in the Valuation….E & Y has said in it’s Valuation report that they have valued all Maytas’s 31 projects in Chennai     ,Hyderabad,Bangalore and Nagpur and except for the Electronic City Project in Bangalore,land has been acquired
  • The fact is that Maytas Properties does not have any land.Some of it’s subsidiary companies have Development Rights,not lands….so the only asset the subsidiaries have are these rights
  • CLB Chairman,S Balasubramanian enquired whether E & Y did the Valuation in a Week..to which the Deputy Director replied ” No,the Valuation was done in a day only.”

So we have Two of the Big Four Accounting Firms facing bigtime flak in this sordid Satyam Saga…Price Waterhouse as Satyam auditors and Ernst & Young as Maytas Properties Valuers

What’s going to come out next !   

Just watch Sehwag Live now on Set Max or DD National …T-20 India v/s NZ…4 sixes..25 of 7 balls !

India has just begun their 45 day Cricket tour of New Zealand in blistering fashion with Sehwag on 25 of just 7 balls…watch him Live demolish the Kiwis in this T 20 match…he’s hit 4 sixes already…three of the first three balls he faced !…. Vettori elected to field after winning the toss

oooooooooooooo! Sehwag has just been bowled for 26 trying to hoist over midwicket…India is 32 fo2 and the fourth over has just started

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