Handiness of power is one of the most of import ingredient of industrial growing and prosperity of the state as a whole. Before 2001 the power sector in the state was wholly owned by the populace sector and the companies were on the brink of bankruptcy. This led to the outgrowth of private participant in this market therefore increasing competition in this sector.
The three major beginnings of power coevals are thermic, hydro and atomic. India is the 6th largest manufacturer and consumer of electricity in the universe bing the capacities of UK and France combined. The figure of people connected to the Indian power grid exceeds 75 million. But the gait at which India is be aftering to turn in the close hereafter will demand immense GW of power and the range in this sector is huge.
But even after so much growing in this sector India still remains a power hungry state. The dominant beginning of power in India is thermic power which accounts for 64 % % of generated power. Other manners of power coevals histories for merely the remainder 25 % which include hydropower, atomic power, biogas energy, wind power etc. Although the other manners of power coevals has made much betterment since 1998 when it contributed to 25 % of generated power to that of the twelvemonth 2008 when it contributed for 36 % of generated power.
Despite the rise in the installed capacity there has been important deficit in the state. This deficit is chiefly due to hapless fiscal status of the SEBs as a consequence they can non increase capacity as planned. Besides most of the undertakings in the private sector are besides delayed owing to high fuel cost, hold in obtaining clearance from the CEA, roadblocks in accomplishing fuel linkages etc.
Thermal power:
Over the last 11 old ages the dependance on thermic power has reduced from 75 % to 64 % . This decrease is chiefly facilitated by the growing of hydel power and to some extent atomic power.
Current installed capacity of Thermal Power ( as of 12/2008 ) is 93,398.64 MW which is 64.7 % of entire installed capacity.
Current installed base of Coal Based Thermal Power is 77,458.88 MW which comes to 53.3 % of entire installed base.
Current installed base of Gas Based Thermal Power is 14,734.01 MW which is 10.5 % of entire installed base.
Current installed base of Oil Based Thermal Power is 1,199.75 MW which is 0.9 % of entire installed base.
The province of Maharashtra is the largest manufacturer of thermic power in the state.
The chief advantage of thermic power is low cost of coevals and still the copiousness of coal makes it a dominant manner of power coevals. The biggest disadvantages of the thermic power is long gestation period, emanations of carbon-dioxide and other oxides of sulfur along with deficiency of flexibleness of operation.
Thermal power coevals in India in last 20 old ages
If we analyse the coevals of thermic power we can see that the industry end product has grown with certain dorks that it received in certain old ages like 1998-99, 2004-05 etc. In these old ages the industrial end product had all of a sudden increased vastly as is apparent from the graph.
Power coevals in India in last 20 old ages
This is the tendency of coevals of power in India based on all beginnings. If we compare these two graphs we can see that the power coevals has besides grown in a similar form as the thermic power sector. Based on this two graphs we can reason that the coevals capacity in India is mostly driven by the thermic power sector. Growth in the thermic power sector triggers growing in the full power sector and autumn in the thermic power sector triggers fall in the full power sector.
Industry life rhythm:
The industry life rhythm for the thermic power sector can be analyzed loosely on the footing of 6 selected parametric quantities. These parametric quantities give us an thought to find which portion of the life rhythm the industry presently is in. These parametric quantities are
Menace of permutation
Menace of entry
Supplier power
Buyer power
Power of complementors
Nature of competition
We will analyse each of these factors separately and eventually seek and reason the place of the industry in the industry life rhythm.
Menace of permutation:
From the graph, it is apparent that over the old ages as the entire power coevals has grown no other manners of power coevals has contributed well to the power coevals as against thermic power. There are other feasible replacements like hydro power and atomic power which is expected to hold bright hereafter. Although hydro power is an unlimited fuel beginning and feasible beginning and generates utile degrees of energy production but there are several disadvantages which has prevented the widespread usage of hydro power for power coevals. The biggest disadvantage is it involves high investing cost, hydrology dependant, involves flood of land and wildlife home ground etc. These factors have prevented the growing of hydroo power on a big graduated table. Another manner of power coevals, atomic energy has the possible to go a beginning of big scale power coevals. As India went in front with their atomic arm plan they have been deprived of civilian atomic fuel for power coevals. But after the recent atomic trade there is a opportunity of addition of atomic fuel replacing thermic power sector in the close future.in 2008 atomic power accounted for 2.5 % of entire power coevals in the state but the atomic power has the possible to account for 25 % of the power generated in the state in close hereafter.
Menace of entry:
There are immense entry barriers for any other manner of power coevals to come in. First of all it takes old ages of research and development to happen feasible option to power coevals. Most of the manners of alternate beginnings of energy terminal up being a research lab tool and finds really small industry application. That is why it is said that coevals of power through alternate manner and holding high industry credence is nil less than a miracle.
Hence it can be concluded that in power sector menace of a new entrant is highly high and hence it can be said that the barriers of entry are immense.
Supplier power:
India is a coal rich state. It is the fourth largest coal manufacturer in the universe but late India has to depend to a great extent on coal imports to feed their thermic power workss. This is chiefly due to hapless quality of coal and naxalite motion which is moving as a hinderance in utilizing local coal. India ‘s coal imports likely to touch 48 million metric tons in the following fiscal twelvemonth.
Today there are immense Numberss of coal providers in the state. Along with that the option of importing good quality coal from abroad has farther reduces the bargaining power of the providers. Since a Thermal power works has the option of purchasing coal from many providers the providers besides compete among themselves to seek and supply better quality coal at a cheaper monetary value. Although in malice of this there have been cases where certain large names in the coal industry like the coal India does hold high bargaining power which prompted NTPC to travel for backward integrating but immense handiness of coal providers reduces this power for the providers.
Therefore it can be concluded that supplier power for the thermic power industry is usually low.
Buyer power:
India ‘s electricity demand is grossly under fulfilled. There is terrible deficit of electricity in the state and the dream of ‘electricity for all ‘ seems a distant world. If we look at the demand and availability place of electric power in assorted sectors of the state we can see that in all the sectors the demand is more than the supply.
Demand/availability in assorted sectors of the state in 2009
In this state of affairs where the demand is so immense and there is terrible deficit of supply the bargaining power of the purchaser is expected to be really low. The purchasers besides do non hold the option of choosing the manner of power ( i.e thermal, hydro or atomic ) as this sector is extremely regulated by the Government and licence is given to merely really few participants in a peculiar sector to run. Besides this sector is chiefly driven by public sector as a consequence competition among the participants are missing here. As a consumer his lone demand is power and the manner of power is non the pick that he can do in the present scenario. Unless the Government run cardinal and State electricity boards move towards other manner of power production this industry is free from any danger. Equally long as power is provided to all and the sector comes out from the Government ordinance it is extremely improbable for the purchaser power to turn here.
86.5 % of power is generated by public sector
Power of complementors:
Nature of competition:
Power sector is India is a extremely regulated sector. Here 64.6 % of power is generated through thermic power workss and the remainder is done through other agencies like hydro, atomic, geothermic etc. The market is regulated and each sector is allotted to a few Numberss of providers therefore cut downing the competition among the participants. Largely the province electricity boards and cardinal participants like NTPC are the primary participants in the market. Although in some sectors some private participants like trust power, TATA power etc have made inroads but private participants still merely history for merely 13.5 % of the industry.
Although Government is looking to loosen up the ordinances to suit private participants in the market as the populace sector has failed to run into the demands but in the present scenario it can be concluded that the competition among the participants in the industry is benign and the industry is far from being competitory.
Decision on the life rhythm:
Based on the analysis of the six parametric quantities we can come to a decision that the industry could be in the phase of growing in the present scenario.
Macro-environmental analysis
We will be making the analysis of the macro-environment with a aid of PESTLE analysis. This is a widely used tool to enable the analysis of the macro-environment impacting the participants of the peculiar industry.
The full signifier of PESTLE is as follows
We will analyze each factors one by one
Political factors:
Prior to 1991 the full power industry was a Government monopoly which performed all the maps of coevals, transmittal, distribution and trading through a vertically integrated set up. With the coming of liberalisation the Government began unbundling the coevals, transmittal, distribution and trading to divide entities and so came the a certain grade of denationalization in this sector.
Still today the thermic power sector is extremely regulated. The province electricity boards account for the highest coevals of electricity followed by the cardinal Government workss. This high grade of ordinance has reduced the competition in this sector as in any sector there is largely monopoly of one individual participant. High grade of Government ordinance has besides been the premier ground for so much of power deficit in the state. The deficiency of competition in this sector reduces the bargaining power of purchasers to near nothing. The deficiency of competition in this sector has besides given rise to lacklustre direction patterns as the companies fail to use methods to cut down power larceny, cut down transmittal loss and better power coevals efficiency.
Many of the large metropoliss in the state like Mumbai is supplied merely by TATA power, Kolkata is supplied by RPG cesc etc. Government is easy seeking to cut down this ordinance and leting multiple participants to run in same section. In Mumbai it has already allowed Reliance Infra and TATA power to provide power in the same section. But such a scenario in the whole state is a long manner to travel.
Similarly this sort of Government ordinance has been a blessing for the province electricity boards of the state as they do n’t hold to confront competition from other participants. The cardinal Government owned NTPC Ltd is the largest manufacturer of thermic power in the state but along with the largest manufacturer it is besides the most efficient manufacturer of power. This is the competitory advantage of NTPC Ltd even if they have to confront competition.
But the province electricity boards have besides faced jobs due to Government intercession. The province Government has invariably interfered in duty puting without subsidising the province electricity boards which have landed them into immense fiscal stagnations. Power supply to agribusiness is extremely subsidized but merely a portion of this subsidy reaches the province electricity boards.
Economic factors:
As the industry operates in an environment where demand is much higher than the supply hence any economic downswing has failed to impact the sale of the merchandise of the industry. Even during economic downswings, all the industries used electricity about in similar measures as it used before the downswing. Similarly during economic downswings persons try to cut down electricity ingestion but since the spread between demand and supply in this sector is so immense that this little decrease in power use does non impact the industry.
But this industry is non influenced by the impact of economic system on its natural stuffs like coal, Diesel and gasoline. With the addition in monetary value of coal, Diesel or gasoline, the cost of coevals goes up therefore increasing the cost of unit megawatt of power generated. But the factor that is in favour of the industry is that any participant does non confront competition from others as virtually they have the monopoly in their section. This enables the participant to increase the cost of the power generated therefore contradicting its losingss. Ultimately the addition in cost of the natural stuffs is borne by the terminal user and the participants are insulated from any loss due to economic alterations. Similar is the instance during rising prices. The rise in the cost of natural stuffs during rising prices is passed on to the terminal clients therefore maintaining the industry insulated from economic downswings.
per capita ingestion of power in India
But with the transition the clip the income of the metropolis population has been turning vastly. This high growing of income has enabled them to saturate their places with tonss of electronic appliances which are largely power hungry. This addition on the sale of luxury merchandises is increasing power ingestion in the metropoliss thereby increasing the of all time increasing demand for power. This addition of demand encourages organisations to increase their power coevals and efficient coevals leads to higher profitableness.
Social and cultural factors:
Social and cultural factors have really small impact on the thermic power sector. Power has become the basic demand for people and it is barely affected by any societal factors.
Technological factors:
Technological factors do hold an consequence on the participants of this industry. With the transition of clip new methods of power coevals are coming up which are more sustainable as they are utilizing the renewable beginnings of energy. In many parts of the state solar power have made certain inroads thereby snaping off market from the thermic power sector. Similarly with the latest atomic trade with the U.S has risen a batch of hope of power coevals through that path. This will further take away some market portion from the thermic power sector. Even if we analyze the power sector over the last 20 old ages we can see that although the demand is really high in this sector but still among the marketed power thermic power portion came down from 75 % to 64.6 % in 2008 which is quiet a dip. Similarly hydro power acquiring cheaper and more efficient over the period of clip is besides a menace to the thermic power sector. There are many other manners of power coevals which do non hold much presence in the market because of deficiency of technological development to do them executable for mass usage. These are like geothermic power, air current power, waste power etc which in hereafter could be a menace to the industry if executable and inexpensive engineering is developed to tap these beginnings for mass graduated table power coevals.
Although the basic manner of power coevals in this section is changeless but certain organisations like NTPC Ltd, CESC Ltd, TATA power etc are invariably introducing to better their engineering to increase the efficiency of power coevals. This improved engineering is instrumental in increasing the efficiency of NTPC Ltd to such high degree that they generate one 4th of the state ‘s power coevals but history for merely one fifth of the installed capacity. The province electricity boards do non better their engineering at a fast gait and that is chiefly the ground for their hapless economic wellness in malice of being insulated from competition.
Legal factors:
There have been many ailments against thermic power sector that it creates a batch of environmental pollution. Many militants have raised their voice against the pollution created by this industry. But the inaccessibility of any other sustainable and efficient manner of power coevals has prevented prohibition on this manner of power coevals.
Environmental Torahs have forced the participants of this sector to travel for clean coal. Clean coal consequences in important decrease in environmental pollution but the cost of clean coal is much higher than that of ordinary coal. This reduces the profitableness of the participants. With the transition of clip there have been several reforms that have taken topographic point in this sector to do this sector more and more efficient. Reforms began in 1991with electricity Torahs ( amendment ) act, when this sector was opened to the private sector therefore forestalling the monopoly of the public sector. The authorities presentment allowed the independent power manufacturers ( IPP ) many incentives the most notable among them was the guaranteed minimal 16 % return on equity for the workss that operated at the rated capacity for 6000 hours in a twelvemonth. Along with this they were given five twelvemonth revenue enhancement vacation. These were done to pull foreign and private investors in this market. With the transition of clip the Government is go throughing many Torahs at the province degree as the Government is now seeking to travel towards big scale competition among the participants in the power sector. They are now get downing to let more than one participant to run in the same sector therefore enabling competition among the participants.
In the coming old ages legal factors will play a major function to modulate the public presentation of the participants in this market. With the Government go throughing Torahs to enable many participants to run in the market and leting high grade of competition the legal factors will be one of the major macro environmental factors that will command the profitableness and public presentation of the bing participants in the thermic power sector.
Environmental factors:
Thermal power is known to do high grade of environmental pollution. It chiefly causes air pollution, H2O pollution, land pollution and noise pollution. Of these the air pollution and land pollution are more terrible. Besides the basic natural stuffs used for thermic power coevals are coal, gasoline and Diesel. All these beginnings are non renewable beginnings. These have prompted immense sum of money being investing in R & A ; D to happen alternate beginning of power coevals which is executable in the big graduated table and besides used renewable beginnings of energy. Although hydro power, solar power etc seem to be feasible options but they lack dependableness as compared to the thermic power.
Lack of feasible replacement has been something which has been in favor of the thermic power sector. Till today thermic power is the lone reliable beginning of mass graduated table power coevals. This fact really puts all the environmental considerations at bay. If hydro power or solar power can be used for mass graduated table power coevals with greater dependableness so thermic power will confront terrible force per unit area to last.
Porter ‘s five force theoretical account:
Porter ‘s Five Force Model:
The theoretical account of pure competition implies that risk-adjusted rates of return should be changeless across houses and industries. However, legion economic surveies have affirmed that different industries can prolong different degrees of profitableness ; portion of this difference is explained by industry construction.
Porter ‘s theoretical account is based on the penetration that a corporate scheme should run into the chances and menaces in the organisations external environment. Particularly, competitory scheme should establish on and understanding of industry constructions and the manner they change.
Porter has identified five competitory forces that shape every industry and every market. these forces determine the strength of competition and hence the profitableness and attraction of an industry. The aim of corporate scheme should be to modify these competitory forces in a manner that improves the place of the organisation. Porter ‘s theoretical account supports analysis of the drive forces in an industry. Based on the information derived from the Five Forces Analysis, direction can make up one’s mind how to act upon or to work peculiar features of their industry.
The original competitory forces theoretical account, as proposed by Porter, identified five forces which would impact on an organisation ‘s behavior in a competitory market. these include the followers:
The competition between bing Sellerss in the market.
The power exerted by the clients in the market.
The impact of the providers on the Sellerss.
The possible menace of new Sellerss come ining the market.
The menace of replacement merchandises going available in the market.
Understanding the nature of each of these forces gives organisations the necessary penetrations to enable them to explicate the appropriate schemes to be successful in their market.
Porter ‘s Five Forces Analysis in Thermal Power Sector
Supply – Many undertakings have been planned but due to decelerate regulative environment, the supply is far lesser than demand. Currently, India needs to duplicate its coevals capacity to run into the possible demand.
Demand – The long term mean demand growing rate is 6 % .
Barriers to Entry – Barriers to entry are high, as come ining this concern requires heavy investing ab initio. The other barriers are fuel linkages, payment warrants from State Governments, Retail distribution licensed, etc.
Dickering Power to Suppliers – It is non really high as Government controls duty construction. However, this may alter in the hereafter.
Dickering Power of Customers – Dickering power of retail clients is low, as power is in short supply. However, Government is a large purchaser and payment by Government can be more irregular.
Competition – It is non really high presently. The Electricity Act, 2003 will promote investings, thereby increasing competition.
National Thermal Power Corporation Ltd. ( NTPC )
National Thermal Power Corporation Ltd. ( NTPC ) a planetary giant in the power sector was set up on 7th November 1975, with an aim to speed up the electricity coevals by be aftering, advancing and forming incorporate development of thermic power in India.
Sing multidimensional chances in the energy sector, NTPC will follow a multi-pronged growing scheme for capacity add-on through Greenfield sites, enlargement of bing Stationss, coup d’etats and joint ventures. The capacity add-on programs that we have drawn up for the fifteen-year period utilizing all the above schemes to enable the corporation to go a 40,000 MW company by 2012 A.D.
The sum installed capacity of the company is 30, 644 MW ( including JVs ) with 15 coal based and 7 gas based Stationss, located across the state. In add-on under JVs, 3 Stationss are coal based & amp ; another station uses naptha/LNG as fuel. By 2017, the power coevals portfolio is expected to hold a diversified fuel mix with coal based capacity of around 53000 MW, 10000 MW through gas, 9000 MW through Hydro coevals, about 2000 MW from atomic beginnings and around 1000 MW from Renewable Energy Sources ( RES ) . NTPC has adopted a multi-pronged growing scheme which includes capacity add-on through green field undertakings, enlargement of bing Stationss, joint ventures, subordinates and coup d’etat of Stationss.
NTPC has been runing its workss at high efficiency degrees. Although the company has 18.79 % of the entire national capacity it contributes 28.60 % of entire power coevals due to its focal point on high efficiency.
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National Thermal Power Corporation is the largest power coevals company in India. Forbes Global 2000 for 2009 ranked it 317th in the universe. NTPC is the largest power public-service corporation in India, accounting for approximately 20 % of India ‘s installed capacity.
Corporate Aim
BUSINESS PORTFOLIO GROWTH
To farther consolidate NTPCaˆYS place as the taking thermic power coevals company in India and set up a presence in hydro power section.
To wide base the coevals mix by measuring conventional beginnings of energy to guarantee long tally fight and extenuate fuel-risks.
To diversify across the power value concatenation in India by sing backward and forward integrating into countries such as power trading, transmittal, distribution, coal excavation, coal mineral extraction, etc.
To develop a portfolio of coevals assets in international markets.
To set up a strong trade name in the domestic & A ; international market
CUSTOMER FOCUS
To further a collaborative manner of working with client turning to be a preferable trade name for supply of quality power.
To spread out the relationship with bing clients by offering a corsage of services in add-on to provide of power e.g. trading, energy consulting, distribution consulting, direction consulting, direction patterns.
To spread out the hereafter client portfolio through profitable variegation into downstream concern, inter alia retail distribution and direct supply.
To guarantee rapid commercial determination devising, utilizing client specific information with equal concern for the involvements of the client.
AGILE CORPORATION
To guarantee effectivity in concern determinations and reactivity to alter in the concern environment by
Adopting a portfolio attack to new concern development.
Continuous and co-ordinated appraisal of the concern environment to place and react to chances and menaces.
To develop a acquisition organisation holding cognition based competitory border in current and future concerns.
To efficaciously leverage information engineering to guarantee rapid determination devising across the organisation.
PERFORMANCE LEADERSHIP
To continuously better on undertaking executing clip and cost in order to prolong long tally fight in coevals.
To run & amp ; keep NTPC Stationss at par with the best-run public-service corporations in the universe with regard to handiness, dependability, efficiencies.
To take for public presentation excellence in the variegation concerns.
To embed quality in all systems and procedures.
HUMAN RESORUCE DEVELOPMENT
To heighten organisational public presentation by commiting an aim and unfastened public presentation direction system.
To aline single and organisational demands and develop concern leaders by implementing a calling development system.
To heighten committedness of employees by acknowledging and honoring high public presentation.
To construct and prolong a learning organisation of competent world-class professionals.
To commit nucleus values and make a civilization of squad edifice, authorization, equity, invention and openness which would actuate employees and enable accomplishment of strategic aims.
FINANCIAL SOUNDNESS
To keep and better the fiscal soundness of NTPC by prudent direction of the fiscal resources.
To continuously endeavor to cut down the cost of capital through prudent direction of deployed financess, leveraging chances in domestic and international fiscal markets.
To develop appropriate commercial policies and processes this would guarantee compensable duties and minimise receivables.
To continuously endeavor for decrease in cost of power coevals by bettering operating patterns.
SUSTAINABLE DEVELOPMENT
To lend to sustainable power development by dispatching corporate societal duties.
To take the sector in the countries of relocation and rehabilitation and environment protection including effectual ash-utilization, peripheral development and energy preservation patterns.
To take developmental attempts in the Indian power sector through attempts at policy protagonism, helping clients in the operations and direction of power workss etc.
RESEARCH & A ; DEVELOPMENTS
To open up the acceptance of dependable, efficient and cost-efficient engineerings by transporting out cardinal and applied research in alternate financess and engineerings.
To transport out research and development of discovery techniques in power works building and operation that can take to more efficient, dependable and environment friendly operation of power workss in the state.
To circulate the engineerings to other participants in the sector and in the long-term generating gross through proprietary engineerings.
NTPC ‘S STRATEGIES
Technological Enterprises
Introduction of steam generators ( boilers ) of the size of 800 MW
Integrated Gasification Combined Cycle ( IGCC ) Technology
Launch of Energy Technology Center -A new enterprise for development of engineerings with focal point on cardinal R & A ; D
The company sets aside upto 0.5 % of the net incomes for R & A ; D
Roadmap developed for following Clean Development
Corporate Social Responsibility
As a responsible corporate citizen NTPC has taken up figure of CSR enterprises
NTPC Foundation formed to turn to Social issues at national degree
NTPC has framed Corporate Social Responsibility Guidelines perpetrating up to 0.5 % of net net income yearly for Community Welfare Measures on perennial footing
The public assistance of undertaking affected individuals and the local population around NTPC undertakings are taken attention of through good drawn Rehabilitation and Resettlement policies
The company has besides taken up distributed coevals for distant rural countries
Environment Management
All Stationss of NTPC are ISO 14001 certified
Assorted groups to care of environmental issues
The Environment Management Group
Ash Utilization Division
Forestation Group
Centre for Power Efficiency & A ; Environment Protection
Group on Clean Development Mechanism
NTPC is the 2nd largest proprietor of trees in the state after the Forest section
Partnering authorities in assorted enterprises
Consultant function to overhaul and improvize several workss across the state
Disseminate engineerings to other participants in the sector
Consultant function “ Partnership in Excellence ” Programme for betterment of PLF of 15 Power Stations of SEBs.
Rural Electrification work under Rajiv Gandhi Grameen Vidyutikaran Yojana
SWOT ANALYSIS of NTPC
Strengths of NTPC
Largest market portion in domestic power coevals and a wide client portfolio across the state.
Excellent path record of public presentation in undertaking execution and works operation.
Diversified thermic coevals portfolio – multiple sizes and fuel types.
Highly skilled and experient human resources, exposed to state-of-the art engineerings in undertaking executing and power coevals.
Navaratna position
High trade name equity among stockholders.
Strong balance sheet – ability to raise low cost debt.
Engineering accomplishments in undertaking constellation and bundle design.
Turnaround ability for old workss – demonstrated in the coup d’etat workss of Talcher, Tanda & A ; Unchahar.
High recognition evaluation that is declarative of the assurance of loaners.
Push on cut downing societal costs of capacity growing – strong executing of Resettlement and rehabilitation programs.
Failing
Low risk-diversification of concern portfolio consists chiefly of coevals assets.
Poor fiscal wellness of clients.
Functional orientation haltering transverse functional position in determination devising.
Long and multi layered procurement procedure taking to long lead times and procedure hold.
Fragmented IT architecture.
Gaps in HR systems such as public presentation direction, wagess and inducements and calling development.
Inadequate deployment of a strong cognition direction system that could help in bettering efficiency and effectivity in all facets of the concern.
Hierarchy for determination devising that affects reactivity.
Role ambiguity and dilution within different lends of the organisation.
Opportunities
Expand coevals capacities by seting up thermic and hydro capacities ; keep the place of a dominant bring forthing public-service corporation in the Indian Power sector.
Broad base fuel mix by sing imported coal, gas, domestic coal, atomic power etc with a position to extenuate fuel hazards and maintain long tally fight.
Backward integrate into fuel direction to exert greater control and apprehension of supply economic sciences.
Lead the development and commercial deployment of non-conventional energy beginnings particularly in the distributed coevals manner.
Improve aggregations by trading, direct sale to majority clients and the active function in allotment in new workss.
Execute increased figure of power workss that classify for Mega Power Projects position, thereby cut downing the cost of the undertakings and power and power generated.
Menaces
Limited experience of operating in a genuinely liberalized environment with competition.
Limited experience of operating in an independently regulated system.
Redirecting power may be constrained by inter-regional connectivity.
Downward regulative and competitory force per unit area on duties.
Rigorous norms for blessing of addition in capital costs for undertakings in event of clip overproduction.
Rigorous environmental norms in the hereafter may add to the cost of coevals.
Absence of an independent habitue for coal industry and the hold in private investings imparting to the hazard of low handiness of coal in the hereafter
From the SWOT analysis assorted chances along with certain menaces have been identified for NTPC. It is of import for NTPC Ltd to leverage on the chances and besides needs to cover efficaciously with the menaces. Each point will cover with the concern scheme that NTPC is using to leverage on the chances.
To leverage upon the chance to bring forth electricity through the hydro power manner NTPC Ltd is following a concern degree variegation. Recent acquisition of NHPC Ltd is a scheme to leverage on the first chance that we have observed. By traveling for a concern degree variegation the company will be able to bring forth electricity through a more eco friendly manner and besides the natural stuff used will be renewable beginnings of energy. With the universe looking frontward to eco friendly beginnings of energy it is all the more of import for NTPC Ltd to diversify into a section which perchance could be the hereafter of power coevals.
For the thermic power sector, the whole industry depends a batch on the quality of coal, gasoline and Diesel supply. In this sort of scenario the bargaining power of the provider goes up enormously. But the environment has chance to increase the supply base so that NTPC can insulate itself from the dickering power of the provider. NTPC follows the concern scheme of supply base optimisation or supply base rationalisation by which it is increasing its supply base thereby guaranting that the bargaining power of the provider is kept under cheque. They have imported good quality coal from abroad market besides to leverage this chance.
There was a immense range for NTPC to develop their ain supply base by making their ain subordinate which can move as their provider. To leverage this chance, NTPC went in front with their programs of backward integrating by which in intends to play the function of the provider of their ain thermic power workss. This backward integrating will enable them to hold a more unafraid beginning of natural stuffs.
To leverage this chance NTPC is besides working towards developing energy through non conventional manners like air current, solar, biomass etc. Renewable energy engineerings provide non merely electricity but offer an environmentally clean and low noise beginning of power.
NTPC has besides formulated its ‘ concern program of capacity add-on of about 1,000 MW thru renewable resources.
India ‘s ambitious growing programs require inclusion of all sectors, particularly the rural sector where two tierce of our population lives. Such economic development can non be achieved without handiness of energy and later efficient energy direction which is important for rural development. As per nose count 2001, approximately 44 % of the rural families do non hold entree to electricity. Some of the small towns are located in remote & A ; unaccessible countries where it would be either impossible or highly expensive to widen the power transmittal web.
The power trading arm of NTPC is the 2nd largest in footings of market portion in short-run trading. It besides holds a minor interest in Power Trading Corporation, the largest power bargainer.
The company is already a seasoned participant in operation and care of power undertakings and is taking up undertakings for redevelopment and modernisation and life extension for 3rd parties. The company has late formed a JV with BHEL for technology and a forgings and projecting JV with Bharat Forge to cut down equipment holds.
For this the company is following the scheme of forward integrating.
Here NTPC Ltd is seeking to follow the pre-emptive scheme. With the aid of this scheme they are seeking to do it impossible for any other participant to fit them on graduated table. With so much addition in graduated table they will besides be able to achieve economic systems of graduated table and the efficiency with which they operate they might do it impossible for any other works to vie with them.
Covering with menaces:
Limited experience of operating in a genuinely liberalized environment with competition:
With private companies come ining the power sector, NTPC is coming out of its comfort zone in the liberalized environment. However, NTPC still has the money power to turn more strongly in face of competition. The company has a debt: equity ratio of 0.64 % for the twelvemonth ended March 2009. NTPC had Rs 17,431 crore in free hard currency as of September 2009, plenty to comfortably fund the equity for more than 15,000 MW of the planned 25,000 MW capacity ( in add-on to 17,900 MW which are in assorted phases of commissioning ) . Besides, internal accumulations continue to be high, the free hard currency will merely turn further. [ 1 ] This will turn out utile for the company to finance its backward integrating into coal excavation and to fund acquisition of mining assets.
Redirecting power may be constrained by inter-regional connectivity:
National and regional power grids are being established to enable transportation of power across parts with dependability. Besides many joint ventures have come about to jointly work out the job of inter part connectivity. For illustration, Power Grid Corporation of India Ltd, has signed a bi-lateral understanding with NTPC Ltd for turnkey executing of 44 kilometers long 400 KV D/C Transmission line from Dadri to Loni at an estimated cost of Rs. 47 crores in June,2009. [ 2 ]
Downward regulative and competitory force per unit area on duties: Since power is a public utlity, the authorities regulates the monetary values so that they are in the best involvement of the populace. More so, with rivals come ining the industry with better efficiency, costs can be pulled down much more in future as it would profit the terminal consumer. In face of this menace, merely option for NTPC is to increase its efficiency. NTPC has been making this by continuously presenting sophisticated engineering in its new undertakings. For illustration, NTPC is all set to follow the new Ultra-supercritical steam rhythm engineering which achieves higher efficiencies than conventional boiler units, ensuing in less coal usage per megawatt-hour.
Rigorous norms for blessing of addition in capital costs for undertakings in event of clip overproduction:
Rigorous environmental norms in the hereafter may add to the cost of coevals: NTPC has been developing assorted environment friendly undertakings since every bit early as 1995. Technologies are adopted with focal point on low cost high benefit options.
Absence of an independent regulator for coal industry and the hold in private investings imparting to the hazard of low handiness of coal in the hereafter: As mentioned earlier, with add-on of new engineerings coal demands are traveling to travel down.
Additionally, by 2017, 20 % of NTPC ‘s coal demand are expected to be met from confined beginnings and would guarantee fuel security for their power undertakings. Besides, this would besides assist lower costs and better the quality of coal supply. [ 3 ]
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A
CORE VALUES -BCOMIT
The followers are the nucleus values practiced at NTPC:
B-Business Ethical motives
C-Customer Focus ( Internal and External )
O- Organizational and Professional Pride
M- Mutual Respect and Trust
I- Innovation and Technology
T-Total Quality for Excellence
The followers are the competitory strengths of NTPC and the assorted steps being taken by the company to remain in front of competition:
Leadership place in the Indian Power Sector: NTPC contributes to more than one 4th of India ‘s power coevals with less than one fifth capacity
Strong Cash Flows and Strong Balance Sheet: The company has strong hard currency fl.ows and entree to easy handiness of finance to fund its future growing operations, research and development disbursals etc.
High Operational Efficiency of Coal Based Stations: NTPC operates its Stationss at a degree of efficiency that exceeds the norm in India, based upon handiness factor ( which is a step of how frequently a station is available to bring forth power ) and mean works burden factor ( PLF ) ( which is a step of how much of its capacity a works really uses to bring forth electricity ) .The PLF of NTPC ‘s coal-based Stationss is higher than the national norm ( around 89.43 % as compared to a less than 80 % norm for the whole state ) . Since the workss are present across the state, it does non depend on any one circle for selling its power ( unlike Tata Power and Reliance Energy ) .
Since more than 85 % of the coevals capacity of NTPC is coal-based, the cost per unit is much lower than the national norm, which is a competitory advantage in itself.
Ability to turnaround underperforming Stations: NTPC has, over the old ages has turned around the public presentation of Badarpur, Unchahar, Talcher and Tandaeach utilizing its corporate abilities. Business development through Acquisition serves both NTPC ‘s ain commercial involvement every bit good as the involvement of the Indian economic system. Taking over being a portion of the acquisition procedure, is besides an chance for NTPC to add to its power coevals capacity through minimum investing & A ; really low gestation period.
NTPC has reduced default hazard as it has PPA ( power purchase understanding ) signed for about 99 % of the power it produces with assorted SEBs ( State Electricity Boards ) . Post the amendment of the Securitisation Act, the recovery rate of dues from SEBs has improved significantly ( 100 % in the last twelvemonth ) . Defaults and delayed payments have been a large issue for coevals companies, as they were unable to plow back the money into enlargement in a planned mode. This provides NTPC with a competitory advantage over the other participants in the industry.
Long term understandings for coal and gas supply: To run into its coal demands, the company has signed long term CSAs covering 12 of its 15 coal-based Stationss. It has besides executed gas supply understandings with GAIL for the supply of gas for its gas-based power Stationss, which are valid up to 2021.Apart from the supply understandings, NTPC has besides been awarded 8 coal excavation blocks by the Govt of India, including 2 blocks awarded for development under a joint venture with Coal India Ltd.
Strategic Locations near fuel beginning: The Plants are strategically located near the beginning of fuels which provides a great competitory advantage over rival.
Renovation and Modernization: NTPC considers Renovation and Modernization ( R & A ; M ) as speedy consequence low investing option to pull out higher coevals from old power Stationss. It gives an chance to leverage the technological promotion which has taken topographic point in the power industry so as to go on economical power coevals. Introduction of progress engineerings is expected to ensue in betterment in efficiency of the units.
Strong Government Support: The company has a strong authorities support and backup which proves advantageous for it.
Competent and Committed Workforce: The company takes pride in its extremely motivated and trained Human Resource that has contributed its best to convey NTPC to its present tallness.
Committedness to the environment: NTPC continues to take assorted proactive steps for protection of the environment and ecology around its undertakings. It was the first amongst power companies in India to get down Environment Impact Assessment ( EIA ) surveies and has reinforced them of all time since. NTPC has besides put in topographic point assorted pollution control systems as portion of its workss. Some of the devices installed to command air and H2O pollution are Electrostatic Precipitators, Flue Gas tonss, Low-NOX burners etc.
NTPC established Centre for Power Efficiency & A ; Environmental Protection ( CenPEEP ) in coaction with USAID with a authorization to cut down GHG emanations per unit of electricity generated by bettering the overall public presentation of coal-burning power workss. The centre maps as a resource Centre for acquisition, presentation and airing of state-of-the-art engineerings and patterns for public presentation betterment of coal discharged power workss for the full power sector of India.
Another key concern at NTPC or any coal based station for that affair is Ash Utilization. The huge measures of Ash produced at NTPC ‘s coal based Stationss are driven to maximal use by the Ash Utilization division which was set up in 1991. The division proactively formulates policies, programs and programmes for Ash Utilization.
The concern for the environment and the steps taken contribute to the edifice of a major competitory advantage for the house as this is the lone manner any company can prolong itself in the hereafter.
Emphasis on Corporate Governance and Corporate Social Responsibility: The corporate administration policy of the authorities is scripted as follows:
“ As a good corporate citizen, the Company is committed to sound corporate patterns based on scruples, openness, equity, professionalism and answerability in constructing assurance of its assorted stakeholders in it thereby paving the manner for its long term success. ”
