Trends and Forecast on Merchant Power Plants in India

December 2013 | 80 pages | ID: T568FF4A771EN
Infra Insights

Abstracts

InfraInsights Research Report "Trends and Outlook on Merchant Power Market in India" is an indispensable source of information on the evolution of merchant power plant and its market in India and how it is expected to change in the times to come. The structural changes that was announced in the Electricity Act 2003, made setting up Merchant Power Plant in India as an attractive business proposition but ever since CERC intervened to cap the prices of spot electricity, the overall business risk - reward scenario of the sector has tilted towards risk side for the merchant power plant. Report does a status check on the overall capacity that was planned and the actual capacity of merchant power that got commissioned till date, structural changes that was suppose to push growth in the sector and overall outlook on the merchant power sector in India. The report provide statistics, policy analysis, case studies on successful MPP projects, provides projection on planned MPP projects and merchant power prices.

Contents

1. EXECUTIVE SUMMARY

2. RESEARCH – APPROACH AND METHODOLOGY

3. TRENDS ANALYSIS FROM UPT2012

Overall MPP market evolution
MPP Capacity addition (Planned Vs Actuals)
Cost of Generation
Policy & Regulations Evolution
Market Structure & Competitiveness
Competitiveness Landscape
M&A

4. TRENDS IN SPOT ELECTRICITY MARKET PRICE UPT2012

Total Short-term Transactions of Electricity with Respect tTotal Electricity Generation
Electricity Transacted through Trading Licensees and Power Exchanges
Price of Short-term Transactions of Electricity
Seasonal variations in spot market prices

5. TRENDS IN ISSUES AND CHALLENGES FACED BY MPPS

Fuel Shortage
Volatility in Merchant Tariffs
Weak financial Position of Discoms
Risk tviability of business models
Others

6. TRENDS IN DE-RISKING STRATEGY TAKEN BY MPPS TMITIGATE BUSINESS RISKS

Cost Related
Revenue Related
Operations Related
Fuel Related
Grid Connection Related

7. FORECAST UPT2017

Capacity Addition till 2017
Emerging Policy & Regulations Regime
Emerging Market Structure
Spot Electricity Prices

8. RISK PROFILING OF EXISTING AND UPCOMING MPPS

Fuel Linkage
Technology Used
Water Availability

9. PESTEL ANALYSIS

10. INFRAINSIGHTS VIEW POINTS

About

Electricity Transacted through Power Exchanges

• The weighted average price of electricity transacted through power exchanges declined from Rs.7.49/kWh in 2008-09 to Rs.3.67/kWh respectively in 2012-13.
• In physical terms (BU terms) the size of this segment increased by about 16% in the year 2012-13 compared to 2011-12, whereas in monetary terms the growth has been about 18% (about Rs.3740 crore).
• From 2011-12 to 2012-13, the power exchange registered a low growth of about 51% in physical terms and a high growth of about 56% (or Rs.3094 crore) in monetary terms.

 Electricity Transacted through Trading Licensees

• From 2011-12 to 2012-13, the bilateral trader segment registered a low growth of 0.78% in physical terms and a high growth of about 4% in monetary terms (or Rs.646 crore).
• The weighted average price of electricity transacted through trading licensees declined from Rs.7.29/kWh in 2008-09 to Rs.4.33/kWh in 2012-13.

Monthly Price trends of short-term transactions of electricity

• The price of electricity transacted through trading licensees was relatively high when compared with the price of electricity transacted through power exchanges during the period 2008-2013.
• Maximum short term power prices were observed in 2008-09 (ranging between Rs7-8 per unit).
• The weighted average price of electricity transacted through trading licensees and power exchanges declined from Rs.7.29/kWh and Rs.7.49/kWh respectively in 2008-09 to Rs.4.33/kWh and Rs.3.67/kWh respectively in 2012-13.
• From 2012 till Mar 2013, prices have started stabilising (ranging between Rs 3-4 per unit at IEX and PXIL)

Coal deficit

• Generation capacity (coal based) grew at CAGR of 13.0% p.a. over 2010-2012, while supply has grown at a negligible CAGR of 0.9% p.a. during this period
• By the end of Twelfth plan, coal based generation capacity is expected to increase to 193,900 MW by FY 2017
• Further by 2017, Coal demand would increase to 848.0 MTPA by FY 2017 while aggregate coal supply estimated at only 631.0 MTPA
• Even after considering significantly enhanced production from IL (477 MTPA @ CAGR of 8.8%); Coal deficit likely to be 162.0 MT in FY 2017