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Wind Power Market – India February 2013
Executive Summary Market
Wind Energy has been the fastest growing renewable energy sector in the country With a cumulative installed capacity of over ‐‐ GW (by Dec 2012) wind power currently accounts for almost 70 % of the total installed capacity in the renewable energy sector This sector is expected to grow with a CAGR of ‐‐% to reach ‐‐ GW by 2016 The market has slumped currently due to withdrawal of the flagship AD & GBI scheme by the Government
Drivers
Drivers & Challenges
Trends
Government
Competitive Landscape
P M A S
– Huge Untapped Wind Power Potential – India Remains Energy Deficient – Global Drive towards Clean Energy – Volatile Oil Prices – Depleting Coal Reserves
LE
Potential of Off‐Shore Capacity Vertical Integration Hybrid Generators
Challenges – Withdrawal of GBI and AD Schemes – Wind Power Evacuation Issues – Land Acquisition Problems – Issues of Grid Integration
Major Investments in the Wind Sector
Major Government Bodies Policy and Regulatory Incentives State wise Comparison Of Feed‐in‐tariff Policy For Wind Power (Top Five States)
Major Players Company A
Company B
Company C
Company D
Company E
Company F
WIND POWER MARKET IN INDIA 2013.PPT
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•Introduction •Market Overview
LE
• Indian Market • EXIM
P •Drivers & Challenges M A S •Trends
•Government Participation •State Specific Issues •Competitive Landscape •Strategic Recommendations •Appendix WIND POWER MARKET IN INDIA 2013.PPT
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Wind power market is poised to grow with the potential revamp of the Generation Based Incentive scheme Market Overview
Market Size Forecast
• Wind Energy has been the fastest growing renewable energy sector in the country • This sector is expected to grow with a CAGR of ‐‐% to reach ‐‐ GW by 2016 • With a cumulative installed capacity of over ‐‐ GW (by Dec 2012) wind power currently accounts for almost ‐‐ % of the total installed capacity in the renewable energy sector • Historically, the states of Tamil Nadu, Karnataka, Maharashtra and Gujarat have been the leaders in terms of total wind installations • More than ‐‐% of the nation’s wind energy development to date is concentrated in just five states in southern and western India – Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra, and Gujarat • The market has slumped currently due to withdrawal of the flagship Accelerated Depreciation & Generation Based Incentive scheme by the Government • However the Ministry of New and Renewable Energy have indicated that the GBI scheme might be reinstated
GW
P M A S x1
LE
2011
x6
x%
x2
x3
2012
2013e
x4
2014e
x5
2015e
2016e
Market Size Historical GW y6 y%
y1
2006
WIND POWER MARKET IN INDIA 2013.PPT
y2
2007
y3
2008
y5 y4
2009
2010
2011
4
Wind generation is a very complex procedure with high costs incurred at every step Wind Power – Generation Procedure & Cost Component
Inverter & Interconnectors
Main Utility Breaker Panel
LE
Cost Breakup of a Wind Farm
Wind Turbine
P M A S
d% c % b %
g% e% i% f% h%
AC Electric Circuits
a %
AC Utility Meter
Grid Connection
Turbine
Land Rent
Financial Costs
Grid Connection
Electric Installation
Road Construction
Foundation
Consultancy
Control Systems
Note: Figures are for a typical 2 MW wind turbine as in FY2009 WIND POWER MARKET IN INDIA 2013.PPT
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Drivers & Challenges – Summary
Drivers
E L P SA M
Huge Untapped Wind Power Potential
Challenges Withdrawal of GBI and AD Schemes Wind Power Evacuation Issues
India Remains Energy Deficient
Land Acquisition Problems
Global Drive towards Clean Energy
Issues of Grid Integration
Volatile Oil Prices Depleting Coal Reserves
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Roll back of incentive schemes have led to an ebb in the wind power sector Withdrawal of GBI and AD Schemes
Impact
• Wind energy sector has registered slow growth in the first quarter FY2013, in sharp contrast to the past year’s growth • Tamil Nadu, the windiest state, capacity addition has fallen by more than half while Rajasthan has witnessed a drastic decline • Withdrawal of generation‐based incentive (GBI) and accelerated depreciation (AD) schemes have emerged as the main reasons behind this debacle • The GBI scheme (launched in 2009) was in addition to the government’s promotional scheme, AD, launched in the 1990s • Accelerated depreciation (AD) was withdrawn from April 1st, 2012 • GBI also lapsed in March 2012 and was not renewed
P M A S
GBI Scheme • It entitled the wind energy producer to get INR 0.50/unit (over and above the tariff) of electricity produced for the first 4 to 10 years of project life subject to maximum cap of INR 6.2 mn/MW • The scheme could be availed only if AD Scheme had not been availed
LE
Accelerated Depreciation Scheme • Wind energy producer were entitled to claim up to 80 % AD in the 1st year itself (against the normal rate of 15%) • Over the years AD was the major driver for the development of the wind industry in the country
However the Ministry of New and Renewable Energy has given hope to Wind power developers and turbine manufacturers that GBI scheme may be reinstated in the near future WIND POWER MARKET IN INDIA 2013.PPT
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Major Public Companies ‐ Summary Net Profit/Loss 24
Size of the Bubble represents Market Capitalization in INR bn
22
x2
20 18
P M A S
16 14
x1
12 10 8 6
LE
4 2
x3
0 ‐2 ‐25,000
‐20,000
‐15,000
‐10,000
‐5,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Total income Company A
Company C
Company B
Note: All figures are in INR bn and are based on the latest financials available WIND POWER MARKET IN INDIA 2013.PPT
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Public: Domestic Company – Company A (1/4) Company Information Corporate Address
Street A Maharashtra
Tel No.
+91‐22‐12345678
Fax No.
+91‐22‐12345679
Website
www.xyz.com
Year of Incorporation
19‐‐
Ticker Symbol
‐‐
Stock Exchange
BSE
Offices and Centres – India
P M A S
LE
Mumbai Head Office
Products and Services Category
Products/Services
Wind Sector
Wind turbine generators, wind power systems and related components such as drive systems, annular generators etc.
Project Services
Land sourcing and permitting, wind resource assessment and installation and commissioning services
Others
Sale/sub‐lease of land; infrastructure development; sale of foundry and forging components; generation and sale of power
Key People Name
Designation
Person A
Founder, Chairman, MD
Person B
CFO
Person C
Global Head of Public Relations
Person D
Chief Economist
WIND POWER MARKET IN INDIA 2013.PPT
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Public: Domestic Company – Company A (2/4) Financial Snapshot Total Income
Key Ratios Particulars
Net Profit/Loss
INR bn
INR bn
2009
SAMPLE 2010
2011
2012
Financial Summary
• The company incurred a net loss of INR ‐‐ bn in FY 2012, as compared to net loss of INR ‐‐ bn in FY 2011 • The company reported total income of INR ‐‐ bn in FY 2012, registering an increase of ‐‐% over FY 2011 • The company earned an operating margin of ‐‐% in FY 2012, an increase of ‐‐ percentage points over FY 2011 • The company reported debt to equity ratio of ‐‐ in FY 2012, an increase of ‐‐% over FY 2011
Key Financial Performance Indicators Indicators
Value (26/12/2012)
Market Capitalization (INR mn) Total Enterprise Value (INR mn) EPS (INR) PE Ratio (Absolute)
‐‐ ‐‐ ‐‐ ‐‐
y‐o‐y change 2012 (2012‐11)
2011
2010
2009
Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets
Cost Ratios Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales)
Liquidity Ratios Current Ratio Cash Ratio
Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio
Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover Improved
WIND POWER MARKET IN INDIA 2013.PPT
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10
Public: Domestic Company – Company A (3/4) Key Business Segments
Key Geographic Segments
Wind Turbine Generator
Sale of Gear Box
Foundry & Forging
Others
2009
2010
Business Highlights
2011
India
LE Europe
P M A S
2012
2009
USA & Canada
Australia
China
Others
2010
2011
2012
Description
News • Ranked as one of the largest wind turbine supplier, in terms of cumulative installed capacity, at the end
Overview
of 2011 • Has operations across Asia, Australia, Europe, Africa and North and South America
Expansion
• The company added ‐‐ MW in FY 2011‐12 • Company A powered ‐‐ that resulted in crossing of 1000 MW (1 GW) of installations in 2011‐12
Achievements
• It was awarded ‐‐ award for “x” and “y” in 2012‐13 • The company ranked –th in Global Transnational companies Survey by the Indian School of Business, Hyderabad and Brazil's Fundacao Dom Cabrall
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SWOT Analysis: Domestic Company – Company A (4/4) • Point 1
• Point 4
• Point 2
P M A S
LE • Point 3
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Appendix
SAMPLE
Ratio
Calculations
Ratio
Calculations
Operating Margin
(Operating Income/Revenues)*100
Current Ratio
Current Assets / Current Liabilities
Net Margin
(Net Profit / Revenues) *100
Cash Ratio
Profit Before Tax Margin
(Income Before Tax / Revenues *100
{(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}
Debt to Equity
Total Liabilities / Shareholders Equity
Debt to Capital Ratio
{Total Debt / (Shareholders Equity + Total Debt)}
Interest Coverage Ratio
EBIT / Interest Expense
Fixed Asset Turnover
Sales / Fixed Assets
Asset Turnover
Sales / Total Assets
Return on Equity (ROE) Return on Capital (ROCE) Return on Working Capital
(Net Income / Shareholders Equity)*100 EBIT / (Total Assets – Current Liabilities)*100 (EBIT / Working Capital) *100
Return on Assets
(EBIT / Total Assets)*100
Return on Fixed Assets
(EBIT / Fixed Assets) *100
Operating Costs (% of Sales)
(Operating Expenses / Sales) *100
Current Asset Turnover
Sales / Current Assets
Administration Costs (% of Sales)
(Administrative Expenses / Sales) *100
Working Capital Turnover
Sales / Working Capital
(Interest Expenses / Sales) *100
Capital Employed Turnover
Sales / (Shareholders Equity + Total Debt)
Interest Costs (% of Sales)
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