POWER SECTOR IN INDIA:

India has the fifth largest generation capacity in the world with an installed
capacity of 152 GW as on 30 September 2009, which is about 4 percent of global power
generation. The top four countries, viz., US, Japan, China and Russia together consume about 49
percent of the total power generated globally. The average per capita consumption of electricity
in India is estimated to be 704kWh during 2008-09. However, this is fairly low when compared
to that of some of the developed and emerging nations such US (~15,000 kWh) and China
(~1,800 kWh).The world average stands at 2,300 kWh2.
The Indian government has set ambitious goals in the 11th plan for power sector
owing to which the power sector is poised for significant expansion. In order to provide
availability of over 1000 units of per capita electricity by year 2012, it has been estimated that
need-based capacity addition of more than 100,000 MW would be required. This has resulted in
massive addition plans being proposed in the sub-sectors of Generation Transmission and
Distribution.
The current installed transmission capacity is only 13 percent of the total installed
generation capacity. With focus on increasing generation capacity over the next 8-10years, the
corresponding investments in the transmission sector is also expected to augment. The Ministry
of Power plans to establish an integrated National Power Grid in the country by 2012 with close
to 200,000 MW generation capacities and 37,700 MW of inter-regional power transfer capacity.
Considering that the current inter-regional power transfer capacity of 20,750 MW4, this is indeed
an ambitious objective for the country.
While some progress has been made at reducing the Transmission and Distribution
(T&D) losses, these still remain substantially higher than the global benchmarks, at
approximately 33 percent. In order to address some of the issues in this segment, reforms have
been undertaken through unbundling the State Electricity Boards into separate Generation,
Transmission and Distribution units and privatization of power distribution has been initiated
either through the outright privatization or the franchisee route; results of these initiatives have
been somewhat mixed. While there has been a slow and gradual improvement in metering,
billing and collection efficiency, the current loss levels still pose a significant challenge for
distribution companies going forward.
Now, the Power & Energy Infrastructure sector in India is poised for a major take-off.
The APDRP (Accelerated Power Development & Reforms Programme 2002 - 2012) has seen an
addition of around 22,000 MW during last five years and during the next five years, a capacity
addition of over 78,000 MW has to be setup by 2012. (A commitment of 15,600 MW of capacity
additions per annum).
The Market Potential to sustain the GDP Growth rate of India @ 8% plus per annum
needs the power sector to grow at 1.8 - 2 times the GDP rate of growth as espoused by

economists, planners and industry experts. This would mean a YOY capacity addition of 18,000 20,000 MW to achieve this ambitious plan of moving India to a Developed Economy status, as
an Economic Global Powerhouse. The Target Mission: POWER for all by 2012 would mean
achieving the target of 1000 KH (Units) of per capita consumption of electricity by this period.
To achieve this goal, following milestones are critical: Attract US $ 250 Billion Investment into the sector. (FDI & Domestic Investment Combined)
Adequate Capacity Growth to Sustain GDP Growth at 8% plus.
Reliable & Quality Power On 24 x 7 bases, at least in Urban & Industrialized areas.
100% Rural Electrification with Adequate & Qualitative Power for irrigation purpose.
Increasing the Role of Hydel & Renewable Energy in the Energy Mix.
Urgent need to develop the alternatives, both in the Fuel & Technology terms.
Focus on implementation (Outcomes are more important than Outlays)
- As espoused by the Indian Prime Minister, Dr. Manmohan Singh

FACTS & FIGURES:In 2006/07, the country experienced an overall energy shortage of 9.6% and peaking
power shortage of 13.8%. In 2007/08, the percentage energy shortage further declined, though
marginally, and was 9.9%. However, the percentage peaking deficit dipped sharply in 2007/08 to
16.6%.
Thermal 53% of the power is produced by thermal production using coal. 10% is power is
produced using gas and 1% power is produced using diesel.
Hydro-India was one of the pioneering states in establishing hydro-electric power plants; the
power plant at Darjeeling and Shimsa (Shivanasamudra) were established in 1898 and 1902
respectively and is one of the first in Asia. The installed capacity as of 2008 was approximately
367.76 MW. The public sector has a predominant share of 97% in this sector.
Nuclear- Nuclear power is the fourth-largest source of electricity in India after thermal, hydro
and renewable sources of electricity.[ As of 2008, India has 17 nuclear power plants in operation
generating 4,120 MW while 6 other are under construction and are expected to generate an
additional 3,160 MW. India has recently made a 123- Nuke deal with USA where Indian atomic
sector is divided into two sectors; military atomic sector and civilised atomic sector. Under this
deal, Indian civilised atomic sector has come under the governance of IAEA (International
Atomic Energy Agency). India can receive the required fuel to generate the power from nuclear
power plant as well as nuclear reactors also from various countries.
Renewable- Renewable energy includes power from small hydro, wind, biomass, and urban and
industrial waste, solar energy, wind energy, tidal energy etc. Current installed base of Renewable
energy is 13,242.41 MW which is 7.7% of total installed base with the southern state of Tamil
Nadu contributing nearly a third of it (4379.64 MW) largely through wind power.
The following table shows the actual amount of the units of MW generated through various
sectors.

SECTOR

MW

State

76036

Central

48471

Private

22246

Total

146753

The following tables show the transmission and distribution scenario in India.
Cumulative growth in transmission sector-

Transmission lines

At the end of 10th plan

i.e. March 2007

At the end of 11th plan

i.e. March 2012

765 kV

1704

7132

HVDC +/- 500kV

58728

11078

HVDC 200kV monopole

162

162

400 kV

75772

125000

230 kV/220 kV

114629

150000

Total transmission lines

198089

293372

MAJOR PLAYERS:NTPC
NTPC, India's largest power company was set up in 1975 to accelerate power development in
India. It has emerged as an Integrated Power Major, with a significant presence in the entire
value chain of power generation business.
NTPC is ranked 317th in the Forbes Global 2000 ranking of the Worlds biggest companies.
With a current generating capacity of 30,644 MW, NTPC has embarked on plans to become a
75,000 MW company by 2017.
NHPC
NHPC Limited (Formerly known as National Hydroelectric Power Corporation Ltd.), A Govt. of
India Enterprise, was incorporated in the year 1975 with an authorised capital of Rs. 2000
million and with an objective to plan, promote and organise an integrated and efficient
development of hydroelectric power in all aspects. Later on NHPC expanded its objects to
include development of power in all its aspects through conventional and non-conventional
sources in India and abroad.
At present, NHPC is a Mini Ratna Category-I Enterprise of the Govt. of India with an authorised
share capital of Rs. 1,50,000 Million . With an investment base of over Rs. 3, 17,000 Million
Approx., NHPC is among the TOP TEN companies in the country in terms of investment.
Initially, on incorporation, NHPC took over the execution of Salal Stage-I, Bairasiul and Loktak
Hydro-electric Projects from Central Hydroelectric Project Construction and Control Board.
Since then, it has executed 13 projects with an installed capacity of 5175 MW on ownership
basis including projects taken up in joint venture. NHPC has also executed 5 projects with an
installed capacity of 89.35 MW on turnkey basis. Two of these projects have been commissioned
in neighbouring countries i.e. Nepal and Bhutan.
NPCIL

Nuclear Power Corporation of India Limited is a Public Sector Enterprise under the
administrative control of the Department of Atomic Energy (DAE), Government of India. The
Company was registered as a Public Limited Company under the Companies Act, 1956 in
September 1987 with the objective of operating the atomic power stations and implementing the
atomic power projects for generation of electricity in pursuance of the schemes and programmes
of the Government of India under the Atomic Energy Act, 1962.
NPCIL is a MOU signing Company with DAE. Presently NPCIL is operating seventeen nuclear
power plants with total installed capacity of 4120 MW has five reactors under construction
totalling 2660 MW capacity. NPCIL has achieved more than 285 reactor years of safe nuclear
power plant operating experience. NPCIL operates plants with motto Safety first and production
Next. NPCIL generated about 90 billion units of electricity in the X plan (2002-2007) exceeding
the set target by about 10%, and added 1180 MW capacity against the target of 1300 MW
capacity, thus realizing 91% of the target capacity addition.
POWERGRID
POWERGRID, a Navratna Public Sector Enterprise, is one of the largest transmission utilities in
the world. POWERGRID wheels about 45% of the total power generated in the country on its
transmission network. POWERGRID has a pan India presence with around 71,500 Circuit Km of
Transmission network and 120 nos. of EHVAC & HVDC sub-stations with a total transformation
capacity of 79,500 MVA.POWERGRID has also diversified into Telecom business and
established a telecom network of more than 20,000 Km across the country. POWERGRID has
consistently maintained the transmission system availability over 99% which is at par with the
International Utilities.
TATA power
Indias largest private sector power utility, Tata Power has an installed power generation capacity
of above 2785 Mega Watts, with the Mumbai power business, which has a unique mix of
Thermal and Hydro Power, generated at the Thermal Power Station, Trombay, and the Hydro
Electric Power Stations at Bhira, Bhivpuri and Khopoli, accounting for 1797 MW.
Reliance
Reliance Power Limited is part of the Reliance Anil Dhirubhai Ambani Group and is established
to develop, construct and operate power projects domestically and internationally. The Company
on its own and through subsidiaries is currently developing 16 large and medium sized power
projects with a combined planned installed capacity of 35,460 MW, one of the largest portfolios
of power generation assets under development in India.
Suzlon

Conceived in 1995 with just 20 people, Suzlon is now a leading wind power company with over
14,000 people in 21 countries with operations across the Americas, Asia, Australia and Europe. It
has got fully integrated supply chain with manufacturing facilities in three continents. It is rich
with sophisticated R&D capabilities in Denmark, Germany, India and The Netherlands. Market
leader in Asia and 3rd largest wind turbine manufacturer in the world, Suzlon Market Share rose
to 12.3% thereby making Suzlon 3rd largest wind turbine manufacturing company in the world

CHALLENGES FOR POWER SECTOR IN INDIA

Low per-capita consumption of electricity
Estimated demand growth of Power at 6-7%
Estimated investment of Rs. 8,00,000 crores in power sector over next 10 years
Privatization of SEBs
Rationalization of the tariff structure
Politically-sensitive issues such as subsidies
Indian Power Sector has some of the major strengths such as abundant coal reserves to
support thermal power generation, huge potential for hydro-electricity generation and
abundant engineering skills to commission and run large-scale projects and a large
consumer base.
But at the same time Indian Power Sector has number of weaknesses/problems such as,
Inadequate power generation capacity
SEBs weak financial health
Lack of optimum utilization of existing generation capacity
Inadequate inter regional transmission links
Alarming level of Transmission and Distribution Losses
Abysmally low level of collection efficiency
Inadequate metering of consumers
Large-scale theft
Cross subsidization of Power and Skewed tariff structure
Energy shortage of about 7.3% and peaking demand shortage of 12.5%
Low PLF of Generating stations

SWOT ANALYSIS OF POWER SECTOR

STRENGHT

Well established and vast T & D network

An extensive network of T&D lines has been developed in India over the years for
withdrawing the power produced at various generating stations and distributing the same to
consumers. Lines of appropriate voltages are laid, depending on the quantum of power and
distance involved. The state of Andhra Pradesh has the largest T&D network of 803 367 ckt
km in the country. Besides, the states of Gujarat, Karnataka, Madhya Pradesh, Maharashtra,
Rajasthan, Tamil Nadu, and Uttar Pradesh have more than 0.4 million ckt km of T&D lines.
Non conventional energy resource base
India has substantial non conventional energy resource base and technologies to meet
growing power requirements by tapping this energy. The MNRE (Ministry of New and
Renewable Energy) laid down Guidelines for Promotional and Fiscal Incentives by State
Governments for Power Generation from Non-conventional Energy Sources. To address
environmental issues related to the power sector, the Government of India has started
various initiatives, including promotion of renewable energy sources for power generation
through schemes such as RPO (renewable purchase obligation), wherein certain quantum of
electricity distributed must be purchased from renewable sources. Fifteen states have
committed to the RPO. A mechanism for RECs (renewable energy certificates) is also being
evolved, which would provide a platform for carrying out trading between renewable energy
surplus and deficit states.
Regulatory mechanism for tariff setting established Emergence of strong
and globally comparable central utilities:
NTPC is the largest power generation company in India. Forbes Global 2000 for 2009
ranked it 317th in the world. It is an Indian public sector company listed on the Bombay
Stock Exchange although at present the Government of India holds 84.5%(after divestment
the stake by Indian government on 19october2009) of its equity.

WEAKNESSES

Persisting shortages

Peaking shortages are about 12% on an all India basis. Indias track record in adding power
generating capacity is poor: in the five years to 2007, the country added 20,950MW of
capacity, against a target of 41,110MW. According to data from CEA, the western region is
the worst affected in the country with around 19% power shortage, with states such as
Maharashtra and Gujarat reeling under a shortage of 23.7% and 23.4%, respectively. States
draw power from a transmission and distribution grid and overdrawing by one state could
hurt the others.
Power theft

Power theft is an increasing menace; the culprits use the latest in technology: remote
sensing devices, high power electromagnet with capacity to effect recordings of meters.

Pitfalls in billing and revenue collection:

The free power given to farmers is unmetered, so their consumption is not known.

OPPORTUNITIES

Natural sources
Use of digital technology
Rural electrification
Untapped hydro power in northeast

THREATS

High AT & C losses (Aggregate technical and commercial losses)

AT&C loss (defined as the difference between the input energy and the units of energy from
which the payment is actually realized) has come down further in 2006/07, to 32.07%.
Compared to the last two years, this marks an improvement in efficiency, of over 2%
Waste generation leading to environmental damage

NTPC
INTODUCTION
National Thermal Power Corporation Ltd. (NTPC) a global giant in the power sector was
set up on 7th November 1975, with an objective to accelerate the electricity generation by
planning, promoting and organizing integrated development of thermal power in India.
NTPCs core business is engineering, construction and operation of power generating plants. It
also
provides consultancy in the area of power plant constructions and power generation to
companies in India and abroad. As on date the installed capacity of NTPC is 27,904 MW through
its 15 coal based (22,895 MW), 7 gas based (3,955 MW) and 4 Joint Venture Projects (1,054
MW). NTPC acquired 50% equity of the SAIL Power Supply Corporation Ltd. This JV company
operates the captive power plants of Durgapur (120 MW), Rourkela (120 MW) and Bhilai (74
MW). NTPC also has 28.33% stake in Ratnagiri Gas & Power Private Limited (RGPPL) a joint
venture company between NTPC, GAIL, Indian Financial Institutions and Maharashtra SEB
Holding Co. Ltd.
NTPC, with a rich experience of engineering, construction and operation of over 30,000
MW of thermal generating capacity, is the largest and one of the most efficient power companies
in India, having operations that match the global standards.
Commensurate with our countrys growth challenges, NTPC has embarked upon an ambitious
plan to
attain a total installed capacity of 75,000 MW by 2017. Towards this end, NTPC has adopted a
multi- pronged strategy such as Greenfield Projects, Brownfield Projects, Joint Venture and
Acquisition route. Apart from this, NTPC has also adopted the Diversification Strategy in related
business areas, such as, Services, Coal Mining, Power Trading, Power Exchange, Manufacturing
to ensure robustness and growth of the company.
Vision

"A world class integrated power major, powering Indias growth, with increasing global
presence."
Mission
Develop and provide reliable power, related products and services at competitive prices,
integrating
multiple energy sources with innovative and eco-friendly technologies and contribute to society.
EXTERNAL ENVIRONMENT
The external environment is examined in two levels. The first one is Macro environment and
second is Micro environment.
Macro environment
On the macro environment a firm holds only little control. It consists of a variety of
external factors that manifest on a large (or macro) scale. These are typically economic, social,
political or technological phenomena. A common method of assessing a firm's macroenvironment is via a PESTLE (Political, Economic, Social, Technological, Legal, and
Ecological) analysis. Within a PESTLE analysis, a firm would analyze national political issues,
culture and climate, key macroeconomic conditions, health and indicators (such as economic
growth, inflation, unemployment, etc.), social trends/attitudes, and the nature of technology's
impact on its society and the business processes within the society.

Economic Factors

India is in the rising phase of its economy curve, the economy of the country was
growing at 9 % before it is affected by recession in 2008. Even during recession also it managed
to touch 7.9% in the last quarter (July-Sep 2009) while developed countries suffering from
negative growth. The Indian economy has the resilience to withstand the challenges arising out
of the global slowdown and the domestic drought situation. This inorganic growth in economy
calls for a watching rate of growth in infrastructure facilities. Power sector is one of the major
aspects of this infrastructure building; the demand for energy has grown at an average of 3.6%
per annum over the past 30 years. In March 2009, the installed power generation capacity of
India stood at 147,000 MW while the per capita power consumption stood at 680 KWH. The per
capita consumption is expected to increase 1000 KWH. So, this provides huge opportunity for
NTPC.1

Political Factors

The Government of India has a mission of POWER FOR ALL BY 2012. This mission would
require that our installed generation capacity should be at least 2, 00,000 MW by 2012 from the
present level of 1, 14,000 MW.2 The Indian government has set an ambitious target to add

approximately 78,000 MW of installed generation capacity by 2012. The total demand for
electricity in India is expected to cross 950,000 MW by 2030.

Technological Factors

The operational efficiency of a thermal power plant is only 30% that is very poor and also high
maintenance cost when compared to hydro power plants (these two are prevalent in India). The
advantages of thermal power plant are low installation cost, less time for installation and
generation, and constant supply. But with advent of nuclear power (after nuclear deal) these
advantages are disserted.

Ecological Factors

Thermal power plants produce co2, so2 and other gases which are hazardous to the
environment. AfterCOPENHA GEN Climate Conference it became more imperative for the govt.
to reduce pollution. This might put pressure on NTPC to go for alternatives.

Socio-Cultural Factors

With a population of India increasing and the scenario of the country is changing from
survival to consumption mode, the demand for electricity continue to be on increase. As a result
of which power generation sector promises increasing returns to those who have already
positioned themselves strongly in this sector.

Legal Factors

Legal factors that main hindrance to enter this industry primarily licenses, environment
protections laws and work safety laws. This is the reason why the most of private companies
although ventured a decade ago still they are thriving for success.
Micro environment
A firm holds a greater amount (though not necessarily total) control of the micro environment. It
comprises factors pertinent to the firm itself, or stakeholders closely connected with the firm or
company.
Power Sector Scenario
The Growth of an economy, calls for a matching rate of growth in its infrastructure
facilities. India is on the peak of its growth trajectory. Power sector is one of the major aspects of
this infrastructure building. Some prominent people like the Ex Chairman of GE Jack Welch
have gone to the extent of saying, you dont have a chance to stand in the 21st century without
lots of powerWithout this you miss the next revolution.

Moreover, the growth rate of demand for power in developing countries is generally
higher than that of GDP. In India, the elasticity ratio was 3.06 in 1st plan, and peaked at 5.11
during 3rd plan and came down to 1.65 in 80s. For 90s a ratio of around 1.5 was projected.
Hence, in order to support a growth of GDP of around 7% the rate of growth of power supply of
10%is required. If we look at current scenario, electricity consumption in India has more than
doubled in the last decade, outpacing the economic growth. If we analyze the various statistics of
Indian power sector, we will find that the generating capacity has gone up tremendously from a
meager 1712MW in 1950 to a whooping 112000MW today.3
To enhance power supply in cost effective ways is one of the top priorities for the
country. During the quarter April-June 2009, the energy and peaking shortages in the country
were 9.8% and 12.3% respectively. The Compound Annual Growth Rate (CAGR) of power
demand for the last five years has been 6.80% as against power supply CAGR of 5.88%. The
CAGR of your Company's power generation has been higher at 6.79%. Strong appetite for
electricity consumption in the country translates into robust growth outlook for power players
like NTPC.
Gross electricity requirement by the end of the 11t h Plan projected by the Working Group on
Power is 1,038 billion kWh and peaking demand estimation is 1, 51,000 MW.
The Integrated Energy Policy, 2006 of the Government of India estimates installed
capacity requirement of 778 GW and energy requirement of 3,880 billion kWh by 2031-32 if the
country's GDP grows at the rate of 8%. At 9% GDP growth rate, the capacity requirement will be
960 GW and energy requirement will be 4,806 billion kWh by 2031-32.
Concerted efforts are being made to enhance power supply at a rapid pace and meet growing
electricity requirements. NTPC is playing a major role in this national endeavor.
Industry Competitive Forces
1) Competition Rivalry Low
In competition front the major part of the pie is occupied by govt. organization. Also, NTPC
contributes alone 28% of power generation, although the company has 18.79% of the total
national capacity that is because of its focus on high efficiency.4
After 1991 liberalization, it opens gates for both the privet sectors in domestic and foreign
investors. The initial response of the domestic and foreign investors to the policy of private
participation in power sector has been extremely encouraging. However, many projects have
encountered unforeseen delays. There have been delays relating to finalization of power purchase
agreements, guarantees and counter guarantees, environmental clearances, matching
transmission networks and legally enforceable contracts for fuel supplies.

The shortfall in the private sector was due to the emergence of a number of constraints,
which were not anticipated at the time the policy was formulated. The most important is that
lenders are not willing to finance large independent power projects, selling power to a monopoly
buyer such as SEB, which is not financially sound because of the payment risk involved if SEBs
do not pay for electricity generated by the IPP. Uncertainties about fuel supply arrangements and
the difficulty in negotiating arrangements with public sector fuel suppliers, which concern
penalties for non-performance, is another area of potential difficulty.
Large private organization like Tata power, Reliance energy, Adani Power and Jindal power are
also finding fortunes very rare, even these organizations also need support from other areas such
as transportation and distribution.
2) Threat of Entry Low
Threat of entry is less likely to be there although power generation is a lucrative business in
view of the
fact that everyone requires power. Ever since liberalization the others industries (i.e. buyers) are
growing.
Also, the present industries also making profits, this calls an opportunity for the new entrants.
The major challenge for the entrants is resources are scarce and requires good network for
distribution which demands collaboration with the distribution channel members. The other
options available for a potential entrant are hydro, solar, wind and tidal which are very costly
(installation and maintenance) and entry barriers are also high.
3) Threat of Substitutes Moderately High
The substitutes of thermal power are hydro, nuclear, solar, wind and tidal power. In case of
hydro electric power the installation cost is high though the maintenance cost and also available
at cheap price. But solar, wind and tidal power both the installation and maintenance cost is high,
hence these are not cost- effective to the buyer. From environmental prospective also these are
eco-friendly .However, in all the cases there is no assurance for consistent continuous supply.
For generating nuclear power both installation costs and maintenance costs are low when
compared to thermal power. However, the major challenge is resources, technology and dumping
the waste. After nuclear deal these constraints are disappeared also, Indian govt. is planning to go
in large way to enhance nuclear power in India with a target of 25000MW by 2012. This is only
a major threat to the NTPC.
4) Suppliers Bargaining Power Moderately High

The major suppliers of NTPC are raw material providers of coal and machinery providers
such as boilers and cooling tanks. For machinery purpose it is heavily depending on BHEL
which is sole provider of power plant equipment suppliers, engineering products & services for
all power plants.
Coal miners are predicting that the coal will no longer available after 20-30 years. Furthermore,
the quality of coal available in India is degrading day by day, which demands more filtering
during sieving process. Those eventually result in less efficiency. More than 53% of the power in
India is generated by coal based thermal power plants which consequences in higher competition
for purchase of raw material. So, this increases the bargaining power of suppliers.
5) Buyers Bargaining Power Low
The buyers of power from NTPC are power grids and industries. Power grids in turn supply
power to
end customer via state electricity boards and purchasing cost are directly regulated by the
government.
In current scenario no industry runs without power, after the liberalization of trade in India all
types industries are emerging in India which is just adding fuel to the fire. The major buyers of
power are industries pertaining to the infrastructure and these industries are growing in large way
because economic surge. Also these buyers require consistent and continuous supply of power
which can be provided only through thermal power and nuclear power hence the buyer
bargaining power is weak. Backward integration of buyers such as Tata power, Reliance power
for their business is a not major threat to the NTPC because they very minute.
Diagnosis of Competitive Forces
Subsequent to scrutinizing each of the five forces, it is apparent that only two forces that
effecting NTPC are suppliers bargaining power (scarce resources and large no of buyers) and
substitutes (Nuclear power generation). The other three forces are not playing a major role in
competition. So, it is comprehensible that the sate of competition is conducive to good
profitability.
INTERNAL ENVIRONMENT
Competitive Assessment
NTPC is the largest power generation company in India. Forbes Global 2000 for 2009
ranked it 317th in the world. With a current generating capacity of 30,644 MW, NTPC has
embarked on plans to become a 75,000 MW company by 2017. It was founded on November 7,
1975 to accelerate power development in India.

NTPC is emerging as a diversified power major with presence in the entire value chain
of the power generation business. NTPC's core business apart from power generation, which is
the mainstay of the company, is engineering, construction and operation of power generating
plants and also ventured into providing consultancy to power utilities, power trading ,ash
utilization and coal mining in India and abroad
The total installed capacity of the company is 30, 644 MW (including JVs) with 15 coal
based and 7 gas based stations, located across the country. In addition under JVs, 3 stations are
coal based & another station uses naphtha/LNG as fuel. By 2017, the power generation portfolio
is expected to have a diversified fuel mix with coal based capacity of around 53000 MW, 10000
MW through gas, 9000 MW through Hydro generation, about 2000 MW from nuclear sources
and around 1000 MW from Renewable Energy Sources (RES). NTPC has adopted a multipronged growth strategy which includes capacity addition through green field projects,
expansion of existing stations, joint ventures, subsidiaries and takeover of stations.
NTPC has been operating its plants at high efficiency levels. Although the company has 18.79%
of the total national capacity it contributes 28.60% of total power generation due to its focus on
high efficiency. NTPCs share at 31 Mar 2001 of the total installed capacity of the country was
24.51% and it generated 29.68% of the power of the country in 2008-09. Every fourth home in
India is lit by NTPC. 170.88BU of electricity was produced by its stations in the financial year
2008-2009. The Net Profit after Tax on March 31, 2006 was INR 58,202 million. Net Profit after
Tax for the quarter ended June 30, 2006 was INR 15528 million, which is 18.65% more than for
the same quarter in the previous financial year. 2005).
At NTPC people before Plant Load Factor is the mantra that guides all HR related
policies. NTPC has been awarded No.1, Best Workplace in India among large organizations for
the year 2008, by the Great Places to Work Institute, India Chapter in collaboration with The
Economic Times.
The concept of Corporate Social Responsibility is deeply ingrained in NTPC's culture.
Through its expansive CSR initiatives NTPC strives to develop mutual trust with the
communities that surround its power stations. Right from social to developmental work of the
community and welfare based dependence to creating greater self reliance; the constant endeavor
is to institutionalize social responsibility on various levels.
3.2 SWOT analysis
SWOT Analysis is a strategic planning method used to evaluate
theStrengths,Weaknesses,Opportunities, andThreats involved in a project or in a business
venture. It involves specifying the objective of the business venture or project and identifying the
internal and external factors that are favorable and unfavorable to achieving that objective.5

3.2.1 Strengths
i.
Largest market share in domestic power generation and a broad customer portfolio across the
country.
ii.
Excellent track record of performance in project implementation and plant operation.
iii.
Diversified thermal generation portfolio multiple sizes and fuel types.
iv.
Highly skilled and experienced human resources, exposed to state-of-the art technologies in
project
execution and power generation.
v.
Emerged into Maharatna status from Navratna i.e. more autonomy and more decision making
power.
vi.
High brand equity among shareholders.
vii.
Huge financial track record with NPAT Rs 82013 million and total assets base is Rs 945362
million
as on 31st March 2009 , with this strong balance sheet it has ability to raise low cost debt.
viii.
Engineering skills in project configuration and package design.
ix.
Turnaround ability for old plants demonstrated in the takeover plants of Talcher, Tanda &
Unchahar.
x.
High credit rating that is indicative of the confidence of lenders.
xi.
In-house training facility (PMI), CENPEEP, R&D etc that assist in development of the sector.
xii.
Thrust on reducing social costs of capacity growth strong execution of Resettlement and
rehabilitation plans.
3.2.2 Weakness
i.
Low risk-diversification of business portfolio consists primarily of generation assets.
ii.
Functional orientation hampering cross functional perspective in decision making.
iii.
Long and multi layered procurement process leading to long lead times and process delay.
iv.
Gaps in HR systems such as performance management, rewards and incentives and career
development.
NTPC BUSINESS STRATEGIES
v.

Inadequate deployment of a strong knowledge management system that could assist in improving
efficiency and effectiveness in all aspects of the business.
vi.
Hierarchy for decision making that affects responsiveness.
vii.
Role ambiguity and dilution within different lends of the organization.
3.2.3 Opportunities
i.
Future of India is dependent on nuclear power which is in its budding stage. Since it has
expertise
in power generation and also huge financial strength it can leverage this opportunity.
ii.
Apart from BHEL, no company (exclude JVs) in country acquired acumen in power equipment
manufacturing
iii.
Expand generation capacities by putting up thermal and hydro capacities; maintain the position
of a
dominant generating utility in the Indian Power sector.
iv.
Broad base fuel mix by considering imported coal, gas, domestic coal, nuclear power etc with a
view to mitigate fuel risks and maintain long run competitiveness.
v.
Expand services for EPC, R&M and O&M activities in the domestic as well as international
markets.
vi.
Backward integrate into fuel management to exercise greater control and understanding of
supply
economics.
vii.
Lead the development and commercial deployment of non-conventional energy sources
especially
in the distributed generation mode.
viii.
Multi Commodity Exchange has sought permission to offer electricity future market
ix.
Improve collections by trading, direct sale to bulk customers and the active role in allocation in
new
plants.
x.
Execute increased number of power plants that classify for Mega Power Projects status, thereby
reducing the cost of the projects and power and power generated.
xi.
Forward integrate into the distribution business by intensifying its present channel in India.
3.2.4 Threats
i.

After liberalization new player in the country like Tata, Reliance, Adani, Jindal etc are evolved
and
these are planning to go in big way.
ii.
It is predicted that the primary ingredient for thermal power generation i.e. coal will not available
after 4 decades.
iii.
Absence of an independent regular for coal industry and the delay in private investments lending
to
the risk of low availability of coal in the future
iv.
Joint ventures of foreign players with Indian companies to get access in power generation and
power equipment manufacturing.
v.
Redirecting power may be constrained by inter-regional connectivity.
vi.
Downward regulatory and competitive pressure on tariffs.
vii.
Stringent environmental norms in the future may add to the cost of generation.
NTPC has been carrying on its operation since 1975 and has acquired a considerable
share of countrys total electricity generation. The challenge for NTPC would be to continue to
hold its large share in power generation sector. Thus NTPC strategies would fall under star of the
BCG matrix.Its to be seen that in near future how NTPC will continue to dominate the energy
and power generation sector. Here
when we talk of high growth we would like to say that NTPC would experience a high growth
rate because it has a strong presence in this sector. It has withstood the onslaught of time and
other pressure to position itself as a leading power producer in India.
4. Strategies of the Company
NTPC is ramping up its generation capacity and is expected to increase its market share
from about 19% today to around 25% by 2017. The capacity growth of will enable it to maintain
its position as the market leader. Today, the installed capacity is 30,644 MW, including 2,294
MW in joint ventures.
During the 11th plan, your Company has already commissioned 3,240 MW capacity. Capacity
aggregating to 17,930 MW consisting of 45 units, including 8 super-critical units of 660 MW
each, is under construction at 18 projects situated in 16 locations. Capacity of 3,022 MW is under
the award process.

For the 12th plan, company has started the process of capacity addition in right earnest. NIT is to
be issued for 5,940 MW capacities through bulk tendering of 9 units of 660 MW each by midOctober 2009. Feasibility reports have been approved for 11,450 MW capacities for further
processing and for an additional 10,100 MW capacity, feasibility reports are ready and are in the
process of approval. Your Company is aiming to place orders for the 12th plan projects during
the next 2 years. Infrastructure work has already commenced in several 12th plan project sites
Thus, your Company is fully geared to become a 75,000 MW Company by 2017. In other words,
it
is going to increase its generation capacity by two and half times between now 2017.
With the11th plan projects under execution, the 12th plan projects in the process company is
targeting to achieve 10% or double-digit growth in generation every year
4.1 Diversified Growth
NTPCs quest for diversification started with its foray into Hydro Power. It has, since then, been
moving towards becoming a highly diversified company through backward, forward and lateral
integration.
The company is well on its way to becoming an Integrated Power Major, having entered
Hydro Power,
Coal Mining, Power Trading, Equipment Manufacturing and Power Distribution. NTPC has
made long strides in developing its Ash Utilization business. In its pursuit of diversification,
NTPC has also developed strategic alliances and joint ventures with leading national and
international companies.
a)Hydro Power: In order to give impetus to hydro power growth in the country and to have a
balanced portfolio of power generation, NTPC entered hydro power business with the 800 MW
Koldam hydro projects in Himachal Pradesh. Two more projects have also been taken up in
Uttarakhand. A wholly owned subsidiary, NTPC Hydro Ltd., is setting up hydro projects of
capacities up to 250 MW.
b)Coal Mining: In a major backward integration move to create fuel security, NTPC has ventured
into coal mining business with an aim to meet about 20% of its coal requirement from its captive
mines by 2017. The Government of India has so far allotted 7 coal blocks to NTPC, including 2
blocks to be developed through joint venture route. Coal Production is likely to start in 2009-10.
c)Power Trading: 'NTPC Vidyut Vyapar Nigam Ltd.' (NVVN), a wholly owned subsidiary was
created for trading power leading to optimal utilization of NTPCs assets. It is the second largest
power trading company in the country. In order to facilitate power trading in the country,
Nationa