Ntpc Limited · NSE:NTPC
Ntpc — 4th Analysts & Investors Meet 2008
67 slides from Ntpc's conference presentation, Aug 1, 2008
Slide 1: A Presentation on NTPC Limited
A Presentation on NTPC Limited by Mr. A.K. Singhal Director (Finance), NTPC at 4th Analysts & Investors Meet 1st- 2nd August 2008 1
Slide 2: Corporate Vision
Corporate vision Corporate Vision: “A world class integrated power major, powering India’s growth, with increasing global presence” 2
Slide 3: Contents
Contents 1 NTPC today 2 Performance Highlights – Year 2007-08 and Q1- 2008-09 3 Business opportunities 4 Way Forward 5 Challenges and Strategies 3
Slide 4: NTPC - Today
NTPC- Today Government owns 89.5% Ownership FIIs own 4.13 % and rest 6.37 % owned by domestic institutions & public One of the three largest Indian companies with a market cap of more than Rs. 1621 billion + Size Has a net worth of Rs. 526.4 billion + Owns total assets of Rs.893.9 billion + Ranked #
Slide 5: NTPC Group
NTPC group 6 Subsidiaries 11 Joint Ventures –PTC India Ltd. (5.28%) –NTPC Electric Supply Company Ltd. –Utility Powertech Ltd. (50%) (100%) –NTPC SAIL Power Co. (Pvt.) Ltd. (50%) –NTPC Vidyut Vyapar Nigam Ltd. –NTPC Alstom Power Services Pvt. Ltd. (100%) (50%) –NTPC Hydro Ltd.(100%) –NTPC Tamilnadu
Slide 6: Contents
Contents 1 NTPC Today 2 Performance Highlights – Year 2007-08 and Q1-2008-09 3 Business opportunities 4 Way Forward 5 Challenges and Strategies 6
Slide 7: Performance Highlights – Fiscal 2008 & Q1-09
Performance Highlights – Fiscal 2008 & Q1-09 1 Capacity Growth 2 Physical Performance 3 Commercial Performance 4 Financial Performance 5 Fuel supply 5 Others 7
Slide 8: Capacity Growth
Capacity Growth Capacity added during 2007-08 -1740MW 500 MW commissioned at Sipat-II 500 MW commissioned at Kahalgaon 740 MW capacity of Ratnagiri JV Increase in capacities during Q1/09 MW 250 MW commissioned at Bhilai 29394 29144 Expansion Increase in commercial capacities 26350 during Q1-Q2/09 23
Slide 9: Capacity Growth
Capacity Growth……. . /012* ,3451.2/4,* .32* +/4 $ % Investment approvals (()* +,-). ( accorded for 6570 MW '" covering investment of '" Rs. 360 bln. in 2007-08 '" % & %% $ 16680 MW capacity % $ $ " under Construction % ! % including 3750 MW $ $ under construction in $ # JV companies !!" 9
Slide 10: Capacity growth and Funding Tie-up
Capacity growth and Funding Tie-up 2007-08 Achieved highest ever capex of Rs. 86.21 bln Rupee Borrowings for Rs 44.750 bln tied up in domestic market Forex loans for USD 480 million tied up Placed Bonds of Rs. 10 bln. Financial Closure of two JV projects achieved under Project Finance structure on n
Slide 11: Physical Performance – Generation & Capacity utilization
Physical Performance –Generation & Capacity utilization PLF PLF -- Quarter Quarter and and Year Year Generation Generation –– Quarter Quarter and and Year Year 2008 2007 Coal Stations 92.24% 89.43% 220 201 BUs Gas Stations 68.14% 71.90% 200 189 180 All India 78.61% 76.80% 160 140 120 100 Q1-09 Q1-08
Slide 12: Commercial Performance
Commercial Performance 100% realization for five years in succession. Same trend continues in the first quarter of fiscal 09 Letters of Credit to the extent of 105% of average monthly billing established by all customers Timely Servicing of Bonds under One-time-settlement Scheme Incentive scheme for
Slide 13: Financial Performance – For the Year 2007-08
Financial Performance – For the Year 2007-08 Rs.Million Fiscal Fiscal Growth 2008 2007 over LY Gross revenue up by 13% Total income 400,177 353,807 13% and crosses Rs.400 bln Sale of Energy 369,462 325,344 13.5 % PBT increased by 15% to Other income 30,715 28,463 8% Rs.103 bln Total expenditure 294,
Slide 14: Financial Performance – Quarter
Financial Performance – Quarter Rs. Million The total income have grown by Q1-09 Q1-08 5.87% % change Sales have registered an Total income 102,567 96,878 5.87 increase of 6.42 % Sale of Energy 95,119 89,382 6.42 Profits have gone down by Other income 7,448 7,496 (0.64) 27.15% Total expenditure 80,9
Slide 15: Financial Performance – Quarter 1/2008-09
Financial Performance – Quarter-1/2008-09 Rs.Million Q1-09 Q1-08 % change As in the past the company has Reported PAT 17265 23699 (27.15% ) disclosed certain adjustments which Adjustments are included in the reported results •Previous year sales -618 -5097 •FERV adjusted to 305 -3828 interest On a c
Slide 16: Fuel Supply
Fuel Supply Coal Supply – During the quarter 28.71 million metric tonnes of coal was received as compared to 29.49 million tonnes in the corresponding quarter in the previous year – Coal stock levels at power stations were satisfactory Gas Supply – During the quarter Gas stations received 11.39 MMSC
Slide 17: Other key highlights (April to July)
Other key highlights (April to July) A Joint Venture Company (JVC) formed with Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited, named "Meja Urja Nigam Private Limited" on April 2, 2008 for setting up a power plant of 1320 MW (2X660 MW) at Meja Tehsil in the state of Uttar Pradesh . Sub committee of
Slide 18: Contents
Contents 1 NTPC Today 2 Performance Highlights – Year 2007-08 and Q1-2008-09 3 Business opportunities 4 Way Forward 5 Challenges and Strategies 18
Slide 19: Power Sector Growth Drivers
Power Sector Growth Drivers….. The GDP grew at 8.7% during fiscal 2008 and growth projection for fiscal 2009 in the range of 8.0- 8.5% The current growth is consumer-led and hence expected to take the economy to even higher growth path. From now to 2017,demand growth in India will be second only to
Slide 20: Per Capita Consumption of Electricity
Per capita Consumption remains low India In 2007-08 704 Per Capita Consumption of Electricity Egypt 1,465 China 1,684 Brazil 2,340 Russia 6,425 Germany 7,442 Japan 8,459 USA 14,240 World Average 2,701 Source: UNDP Human Development Report 2007-08 – Data for 2004 Figures in kwh •Power demand in India
Slide 21: Existing Generating Capacity - March 2008
Existing Generating Capacity- March 2008 Fuel wise break-up (MW) Sector wise break-up (MW) Thermal 91,907 64.2% Private Sector Hydro 35,909 25.1% 14% Nuclear 4,120 2.8% State Central Sector Renewable 11,125 7.9% Sector 52% 34% TOTAL 143,061 100.0% (Excluding captive capacity of 14636 MW connected to
Slide 22: XI plan target 2007-2012
XI plan target-2007-2012 Thermal Total Sector Hydro Nuclear Total Thermal Coal Lignite Gas Central 24310 1000 1490 26800 9685 3380 39865 sector State Sector 23135 450 762 24347 3605 0 27952 Private 5460 0 2037 7497 3263 0 10760 Sector Total 52905 1450 4289 58644 16553 3380 78577 NTPC to contribute t
Slide 23: NTPC's XI plan target 2007-2012
NTPC’s XI plan target-2007-2012 Owned by NTPC Owned by NTPC JVs Coal Hydro Gas Total Total 2007-08 1000 1000 740 1740* 2008-09 2320 2320 500** 2820 2009-10 2800 800 3600 3600 2010-11 2820 1300 4120 2500 6620 2011-12 4230 1120 1300 6650 1000 7650 Total 13170 1920 2600 17690 4740 22430 * Commissioned
Slide 24: Contents
Contents 1 NTPC Today 2 Performance Highlights – Year 2007-08 and Q1- 2008-09 3 Business opportunities 4 Way Forward 5 Challenges and Strategies 24
Slide 25: Way Forward - To become an integrated power major
Way Forward- To become an integrated power major • HYDEL POWER ~9,000 MW BY 2017 • GLOBALISATION • POWER SETTING UP OF POWER • NUCLEAR POWER PLANTS ABROAD TRADING 2000 MW BY 2017 INTERNATIONAL • POWER • RENEWABLES~1000 CONSULTANCY DISTRIBUTION MW BY 2017 LATERAL FORWARD INTEGRATION INTEGRATION BACKW
Slide 26: NTPC by 2017
NTPC BY 2017 Present 2011-12 2016-17 Installed capacity 29,394 ~ 50,000 ~ 75,000 (MW) Coal mining -- 12 MTPA ~ 47 MTPA (production) Trading 3.3 BU 10 BU 25 BU (units traded) (2007-08) Distribution -- 1,000 MW 2,000 MW (capacity) 24547 ~ 30000 ~35000 Employee strength 26
Slide 27: NTPC Fuel Mix by 2017
NTPC FUEL MIX BY 2017 CAPACITY MIX - 2017 CAPACITY MIX - 2012 (75,000 MW) CAPACITY MIX - TODAY (50,000 MW) (29,394 MW) NUCLEA R HYDRO 3% RENEW 12% 1% GAS HYDRO GAS 16% 4% 18% GAS 14% COAL 70% COAL 80% COAL 82% 6 '' ' " 6 Expected CAGR of capacity of INDIA upto 2017 - 9.6% Expected CAGR of Capacity o
Slide 28: Strategic diversification initiatives
Strategic diversification initiatives Acquisition of 44.6% stake in TELK – for manufacturing and repair of high voltage transformers and associated equipment – Business collaboration and shareholders agreement signed with Govt of Kerala and TELK – Permission from SEBI awaited for delisting of shares
Slide 29: Setting up global footprints
Setting up global footprints MOA signed with the Government of Sri Lanka and Ceylon Electricity Board for setting up a 500 MW coal based thermal power plant in Sri Lanka: Site identified subject to establishing techno-economic feasibility PPA under discussion Draft JV Agreement under preparation MOU
Slide 30: Leveraging NTPC's capabilities for growth of power sector
Leveraging NTPC’s capabilities for growth of power sector Under Partnership In Excellence (PIE), 2859 million units added during fiscal 2008. This amounts to capacity addition of 440 MW at 77.7% PLF. Decentralised Distributed Generation (DDG) projects commissioned at six villages in UP, Rajasthan an
Slide 31: Contents
Contents 1 NTPC today 2 Performance Highlights – Year 2007-08 and Q1- 2008-09 3 Business opportunities 4 Way Forward 5 Challenges and Strategies 31
Slide 32: Key Challenges
Key Challenges 1. Human Resource Development & Compensation Package 2. Land Acquisition 3. Managing Environment – generating clean power 4. Regulatory Environment 5. Fuel security 6. Sustaining present level of operational efficiency 7. Competition 8. Financial viability of Customers 9. Limited Fina
Slide 33: Human Resource Development
Human Resource Development… Strategy –to retain experienced manpower and attract new talent 24,547 highly trained employees Improving Productivity Senior executives possess extensive experience of the industry MU 10.0 Generation per Employee Executive Turnover Rate 3.1% 8.48 8.0 Planned intervention
Slide 34: Human resource - Compensation Package
Human resource…………Compensation Package. Strategy: adopt measures to make compensation package attractive Implementation of PRP (Performance Related Pay) by paying upto 5% of distributable profit to employees Merger of DA for all employees from January 1, 2007 Enhancement of Children Education Reimbu
Slide 35: Land Acquisition
Land Acquisition Strategy – Well laid down CSR and R&R Policies The welfare of project affected persons and the local population around NTPC projects is taken care of through well drawn Rehabilitation and Resettlement policies The company has also taken up distributed generation for remote rural are
Slide 36: Managing Environment – generating clean power
Key Challenge – Managing Environment – generating clean power Strategy – Sound environment management “For sustainable energy development NTPC has adopted the vision- “Going Higher on Generation, lowering GHG intensity” 0.5% of profit to be set aside annually for undertaking/sponsoring research lead
Slide 37: Financial viability of customers
Financial viability of customers Strategy – Commercial prudence & incentives Since 2003-04, the realization of dues by CPSUs improved to about 100 % current billing: 2001-02 76% 2002-03 95% 2003-04 Almost 100% 2004-05 Almost 100% 2005-06 Almost 100% 2006-07 Almost 100% 2007-08 Almost 100% NTPC has r
Slide 38: Fuel security
Fuel security Strategy –Backward integration & diversification Strategies for coal sourcing Long term fuel tie up for required quantities with Coal PSUs – more than 80% of NTPC’s coal based capacity located at /near pit head. Import as and when required Develop coal mines – 7 coal mines including 2
Slide 39: Fuel security – coal mine development
Fuel security …….. Status of coal mine development 7 coal blocks allotted of which two would be developed in joint venture with Coal India Limited Estimated mine-able reserves of 3 billion MT Estimated total production capacity of 48 MTPA by the year 2017 NTPC Board has approved an advance expenditu
Slide 40: Sustaining present level of operational efficiency
Sustaining present level of operational efficiency Strategy –focussed attention on efficient running of stations Introduction and roll-out of RCM (Reliability Centred Maintenance) including REAP (Risk Evaluation and Associated Practices) Enhancing quality of plant overhauls to target ‘zero’ Forced O
Slide 41: Sustaining operational efficiency – PLF by station
Sustaining present level of operational efficiency Strategy –focussed attention on efficient running of stations Consistent improvement in PLF. 98.0 97.7 96.1 95.6 95.7 95.4 94.0 92.8 92.7 92.2 92.1 91.9 91.7 91.7 91.7 91.1 90.1 90.0 89.7 89.4 89.4 88.9 88.6 86.9 86.5 86.4 86.1 83.8 83.5 81.3 Singra
Slide 42: Sustaining operational efficiency – outages
Sustaining present level of operational efficiency Strategy –focussed attention on efficient running of stations Forced Outage For the year 2007-08, forced outage <0.2 % in 9 out of 14 stations Overall reduction of 0.65%, forced outage reduced from 2.5% to 1.9% during 2007-08 Planned Outage For the
Slide 43: Performance Benchmarking with world standards
Sustaining present level of operational efficiency….. Performance Benchmarking with world standards NTPC became a member of North America Electric Reliability Corporation (NERC). NERC maintains a database of more than 5000 generating units around the world through its Generating Availability Data Sy
Slide 44: Performance comparison (475–525 MW)
Sustaining present level of operational efficiency Performance comparison (475 – 525 MW) No. of international units in the cluster = 74 No. of NTPC units = 26 GROSS CAPACITY FACTOR(PLF) UNPLANNED OUTAGE FACTOR 100.91 18.3 88.64 94.8 -------> (%) 13.62 -------> (%) 61.35 62.1 5.77 3.11 0.02 0 0 MEAN
Slide 45: Performance comparison (200–220 MW)
Sustaining present level of operational efficiency Performance comparison (200– 220 MW) No. of international units in the cluster = 81 No. of NTPC units = 35 GROSS CAPACITY FACTOR (PLF) UNPLANNED OUTAGE FACTOR 26.23 91.42 100.29 96.51 78.86 -------> (%) -------> (%) 56.52 10.16 5.69 2.23 1.89 0.48 0
Slide 46: Performance comparison vs AEP and ESCOM
Sustaining present level of operational ….. Performance comparison (200– 220 MW) 2005-06 AEP (USA) ESCOM (SA) NTPC CAPACITY MW 38354 39810 26912 EQ. AVAILABILITY FACTOR (DC) % 82.87 88.70 89.74 EQ. CAPACITY % 60.98 87.40 89.43 FACTOR (PLF) On all the parameters NTPC performed better 46
Slide 47: Competition
Competition Strategy – Rapid Capacity Expansion Indian Power sector has enormous opportunities for growth and NTPC can benefit from enhanced competition The next largest power utility owns 9621 MW i.e. 6.72% of market share in terms of capacity Rapid capacity expansion under way, NTPC to add 45000 M
Slide 48: Regulatory Environment
Regulatory Environment Strategy –policy advocacy In the last 10 years, Regulatory Framework has matured. Regulatory system is working in a transparent manner to promote efficiency in the sector. One of the key outcome of the regulatory mechanism has been in the distribution area where Discoms are pr
Slide 49: Regulatory Environment
Regulatory Environment…….. Strategy –policy advocacy Setting up of Power Exchange has also provided alternate sale mechanism to generators. Policy frameworks by Govt. of India -- National Electricity Policy and Tariff Policy provide for reasonable return to the utilities to ensure investment in the
Slide 50: Regulatory environment – commercially attractive source of power
Regulatory environment…….. Strategy – to strive to remain commercially attractive source of power Average selling price is Rs. 1.84 per unit in fiscal 2008 Supply decisions based on commercial principles – Allocation of power to customers with ability to pay – Regulation/reallocation in case of defa
Slide 51: Limited Financial Resources
Limited Financial Resources Strategy – ensuring robust financial growth Growth in Gross Block + Growth in PAT CWIP, Construction Stores, & Advance. 80000 894343 900000 74148 75000 800000 758463 675665 68647 700000 70000 596736 224783 Rs. Million 600000 168392 65000 Rs. Million 530347 136340 500000 4
Slide 52: Limited Financial Resources – key ratios
Limited Financial Resources….. Strategy –sustaining strong key ratios 17 3.5 16.1 3.22 16 3 3.16 15.57 14.94 2.5 2.56 15 14.33 14.16 13.89 14.07 2 14 1.91 1.67 12.93 1.5 13 12.77 12.46 1 12 0.52 0.45 0.50 0.43 0.41 0.5 11 0 10 2003-04 2004-05 2005-06 2006-07 2007-08 2003-04 2004-05 2005-06 2006-07 2
Slide 53: Technological Upgradation
Technological Upgradation Strategy - Technology Initiatives along with R&D Introduction of State of Art technology Introduction of unit size of 800 MW Super critical technology and 765 KV transmission are some of the technologies adopted. Development of Integrated Coal Gassification Combined Cycle (
Slide 54: Technological Upgradation – higher efficiency units
Technological Upgradation Strategy- adoption of higher efficiency units Sub - critical units Super - critical units Old Recent Sipat-I Barh-I Barh-II Unit Size 500 MW 500 MW 660 MW 660 MW 660 MW MS Pressure kg/cm2 170 170 247 247 247 MS Steam Temp(O C) 537 537 537 537 565 RH Steam Temp (O C) 537 565
Slide 55: Technological Upgradation
Technological Upgradation…….. Strategy- adoption of higher efficiency units •By 2012, these units could reduce CO2 emissions by almost 1 Million Tons •The methodology developed for supercritical power plants in respect of North Karanpura project has been approved by “United Nations Frame Work Conven
Slide 56: Challenge – Sustaining Market share
Challenge-Sustaining Market share Existing Business strength- Dominant Market Share Capacity (MW) Generation (BUs) 27350 19% 201 29% 503 71% 115859 81% Excluding JVs, as at 31st March 2008 Excluding JVs, for 2007-08 NTPC’s CAGR in terms of capacity since inception - 20% NTPC’s CAGR since inception f
Slide 57: Challenge – Sustaining Market share
Challenge-Sustaining Market share…… Strategy – Rapid capacity expansion INSTALLED CAPACITY MULTI-PRONGED GROWTH STRATEGY 75000 •Multi pronged approach to capacity addition •Greenfield projects 50000 •Brownfield expansion •Joint ventures •Acquisitions 29394 •Diversification in related business areas
Slide 58: Forward-looking statements
The information contained in this presentation contains forward looking statements. Actual result may vary materially from those expressed or implied, depending upon economic conditions, government policies and other factors. Any opinion expressed is given in good faith but is subject to change with
Slide 59: Power Producer of International Repute
Power Producer of International Repute www.ntpc.co.in 59
Slide 60: Picturesque view of Ash Mound of NCTPP-Dadri
Picturesque view of Ash Mound of NCTPP-Dadri 60
Slide 61: Ash Utilisation
Ash Utilisation During FY 08, about 23.7 New Ash Mound at Dadri million tonne of Ash has been utilised which is about 55.1% of the ash generated. Full utilisation targeted within 9 years of operation for New Projects. Major areas of Ash utilisation: – Cement and Asbestos – Road Embankment – Mine Fil
Slide 62: SIPAT-I (3x660 MW)
SIPAT-I (3x660 MW) STAGE – I, U # 1 – ID FAN 62
Slide 63: DADRI (2x490 MW)
DADRI (2x490 MW) BOILER DRUM OF UNIT #1 IN POSITION 63
Slide 64: KAHALGAON-II (3x500 MW)
KAHALGAON- II (3x500 MW) A VIEW OF MILLS & COAL PIPES (RHS) UNIT - # 1 64
Slide 65: KOLDAM HEPP (4x200 MW)
KOLDAM HEPP (4x200 MW) SPILLWAY CONSTRUCTION IN PROGRESS 65
Slide 66: LOHARINAG PALA HEPP (4x150 MW)
LOHARINAG PALA HEPP ( 4x150 MW) SURGE SHAFT BOTTOM ADIT IN PROGRESS 66
Slide 67: World vs India energy and emission indicators
%17 41. -7 45+ 2)* /., Sl. Parameter World India No. 1. TPES /GDP (Kgoe/’$PPP) 0.21 0.16 2. Per Capita CO2 Emission 4.22 1.05 (Tonnes) 3. TPES Per Capita (Toe /capita) 1.78 0.49 4. Per Capita Electricity 2596 631 Consumption (kWh) Source: IEA’s Publication, ‘Key Energy Indicators-2007’ Based on per