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Market Research Report : Wind Power Market in India 2013

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Wind Power Market – India
February 2013
Executive Summary
                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 
  Market         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


                                              P
                  – Huge Untapped Wind Power Potential
                                                                         LE   Challenges
                                                                                 – Withdrawal of GBI and AD Schemes



                                             M
  Drivers &       – India Remains Energy Deficient                               – Wind Power Evacuation Issues



                                            A
 Challenges       – Global Drive towards Clean Energy                            – Land Acquisition Problems



                                          S
                  – Volatile Oil Prices                                          – Issues of Grid Integration
                  – Depleting Coal Reserves

                Potential of Off‐Shore Capacity                               Major Investments in the Wind Sector
   Trends       Vertical Integration
                Hybrid Generators

                Major Government Bodies
                Policy and Regulatory Incentives
Government      State wise Comparison Of Feed‐in‐tariff Policy For Wind Power (Top Five States)


                                                               Major Players
Competitive               Company A                              Company B                             Company C
 Landscape                Company D                              Company E                             Company F



                                       WIND POWER  MARKET IN INDIA 2013.PPT                                                   2
     •Introduction
     •Market Overview
          LE  
       • Indian Market

   M   P
       • EXIM

S A •Trends
    •Drivers & Challenges

     •Government Participation
     •State Specific Issues
     •Competitive Landscape
     •Strategic Recommendations
     •Appendix
          WIND POWER  MARKET IN INDIA 2013.PPT   3
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 


                                                                                    
                                                                    GW
  energy sector in the country



                                                                                LE
• This sector is expected to grow with a CAGR of ‐‐% to                                            x%                    x6
  reach ‐‐ GW by 2016                                                                                            x5



                                                   P
                                                                                                         x4
• With a cumulative installed capacity of over ‐‐ GW                                 x2     x3
                                                                          x1
  (by Dec 2012) wind power currently accounts for 


                                                  M
  almost ‐‐ % of the total installed capacity in the 
  renewable energy sector


                                               S A
• Historically, the states of Tamil Nadu, Karnataka, 
  Maharashtra and Gujarat have been the leaders in 
                                                                         2011       2012   2013e        2014e   2015e   2016e

  terms of total wind installations                                Market Size Historical
• More than ‐‐% of the nation’s wind energy 
  development to date is concentrated in just five                  GW
  states in southern and western India – Tamil Nadu, 
  Andhra Pradesh, Karnataka, Maharashtra, and                                                                            y6
                                                                                                   y%
  Gujarat                                                                                                        y5
• The market has slumped currently due to withdrawal                                                     y4
                                                                                            y3
  of the flagship Accelerated Depreciation &                                         y2
                                                                          y1
  Generation Based Incentive scheme by the 
  Government
• However the Ministry of New and Renewable Energy 
  have indicated that the GBI scheme might be                            2006       2007   2008         2009    2010    2011
  reinstated

                                             WIND POWER  MARKET IN INDIA 2013.PPT                                              4
Wind generation is a very complex procedure with high 
costs incurred at every step
Wind Power – Generation Procedure & Cost Component


   Wind Turbine


                                                                    LE  
                                                                    Cost Breakup of a Wind Farm


     Inverter &
                                       MP
                                      A
                                                                                          g%
                                                                                     d%


                                    S
  Interconnectors                                                                         e% i%
                                                                               c %
                                                                                            f%
                                                                                             h%
                                                                         b %
Main Utility Breaker
      Panel             AC Electric Circuits


                                                                                                       a %
  AC Utility Meter


                                                          Turbine                    Land Rent                   Financial Costs
                                                          Grid Connection            Electric Installation       Road Construction
  Grid Connection
                                                          Foundation                 Consultancy                 Control Systems
                                                                         Note: Figures are for a typical 2 MW wind turbine as in FY2009

                                  WIND POWER  MARKET IN INDIA 2013.PPT                                                              5
Drivers & Challenges – Summary 




  Drivers
                        SA M PLE                                   Challenges

                                                                   Withdrawal of GBI and AD Schemes

  Huge Untapped Wind Power Potential
                                                                   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




                                       WIND POWER  MARKET IN INDIA 2013.PPT                           6
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



                                                                                  LE  
• Tamil Nadu, the windiest state, capacity addition has fallen by more than half while Rajasthan 
  has witnessed a drastic decline


                                                       P
• Withdrawal of generation‐based incentive (GBI) and accelerated depreciation (AD) schemes 
  have emerged as the main reasons behind this debacle


                                                      M
• The GBI scheme (launched in 2009) was in addition to the government’s promotional scheme, 
  AD, launched in the 1990s


                                                   S A
• Accelerated depreciation (AD) was withdrawn from April 1st, 2012
• GBI also lapsed in March 2012 and was not renewed



                      GBI Scheme                                                       Accelerated Depreciation Scheme
• It entitled the wind energy producer to get INR                             • Wind energy producer were entitled to claim 
  0.50/unit (over and above the tariff) of                                      up to 80 % AD in the 1st year itself (against the 
  electricity produced for the first 4 to 10 years of                           normal rate of 15%)
  project life subject to maximum cap of INR 6.2                              • Over the years AD was the major driver for the 
  mn/MW
• The scheme could be availed only if AD Scheme                                 development of the wind industry in the 
  had not been availed                                                          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                                                 7
Major Public Companies ‐ Summary
Net Profit/Loss
   24
                                                                                         Size of the Bubble represents Market 


                                                                                         
   22
                                                                                                 Capitalization in INR bn
                                                        x2



                                                                                     LE
   20
   18
   16
   14

                                                        MP
                                                       A
                                                        x1
   12
   10
    8
    6
                                                     S
    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                                                                  8
Public: Domestic Company – Company A
(1/4)
Company Information                                                      Offices and Centres – India 
                    Street A
Corporate Address



                                                                                        
                    Maharashtra




                                                                                    LE
Tel No.             +91‐22‐12345678
Fax No.             +91‐22‐12345679
Website
Year of 
                    www.xyz.com

                    19‐‐

                                                       MP
                                                      A
Incorporation



                                                    S
Ticker Symbol       ‐‐                                                       Mumbai  
Stock Exchange      BSE                                                                                       Head Office


Products and Services
Category            Products/Services
                    Wind turbine generators, wind power                  Key People
Wind Sector         systems  and related components such 
                    as drive systems, annular generators etc.            Name                           Designation
                    Land sourcing and permitting, wind                   Person A                       Founder, Chairman, MD
Project Services    resource assessment and installation and 
                    commissioning services                               Person B                       CFO
                    Sale/sub‐lease of land; infrastructure                                              Global Head of Public 
                    development; sale of foundry and                     Person C
Others                                                                                                  Relations
                    forging components; generation and sale 
                    of power                                             Person D                       Chief Economist


                                                 WIND POWER  MARKET IN INDIA 2013.PPT                                            9
Public: Domestic Company – Company A
(2/4)
Financial Snapshot                                                               Key Ratios
                                                                                                                 y‐o‐y change 
                    Total Income          Net Profit/Loss                                  Particulars                         2012   2011   2010     2009
                                                                                                                   (2012‐11)
 INR bn                                                             INR bn
                                                                                  Profitability Ratios
                                                                                  Operating Margin




                  SAMPLE
                                                                                  Net Margin
                                                                                  Profit Before Tax Margin
                                                                                  Return on Equity




                                                                          
                                                                                  Return on Capital Employed
                                                                                  Return on Working Capital
          2009            2010            2011              2012                  Return on Assets
Financial Summary                                                                 Return on Fixed Assets
                                                                                  Cost Ratios
• The company incurred a net loss of INR ‐‐ bn in FY 2012, as                     Operating costs (% of Sales)
  compared to net loss of INR ‐‐ bn in FY 2011                                    Administration costs (% of 
• The company reported total income of INR ‐‐ bn in FY 2012,                        Sales)
  registering an increase of ‐‐% over FY 2011                                     Interest costs (% of Sales)
                                                                                  Liquidity Ratios
• The company earned an operating margin of ‐‐% in FY 2012, an 
                                                                                  Current Ratio
  increase of ‐‐ percentage points over FY 2011
                                                                                  Cash Ratio
• The company reported debt to equity ratio of ‐‐ in FY 2012, an                  Leverage Ratios
  increase of ‐‐% over FY 2011                                                    Debt to Equity Ratio
                                                                                  Debt to Capital Ratio
Key Financial Performance Indicators
                                                                                  Interest Coverage Ratio
          Indicators                      Value (26/12/2012)                      Efficiency Ratios
Market Capitalization (INR mn)                      ‐‐                            Fixed Asset Turnover
Total Enterprise Value (INR mn)                                                   Asset Turnover
                                                    ‐‐
                                                                                  Current Asset Turnover
EPS (INR)                                           ‐‐                            Working Capital Turnover
PE Ratio (Absolute)                                 ‐‐                            Capital Employed Turnover
                                                                                                                                      Improved      Decline

                                                            WIND POWER  MARKET IN INDIA 2013.PPT                                                        10
Public: Domestic Company – Company A
(3/4)
Key Business Segments                                                     Key Geographic Segments
           Wind Turbine Generator      Sale of Gear Box                                  India         USA & Canada        Australia




                                                                                         
           Foundry & Forging           Others                                            Europe        China               Others




                                                        P                            LE
    2009

Business Highlights
                    2010            2011

                                                    S
                                                  2012
                                                      AM                          2009             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
                               • The company added ‐‐ MW in FY 2011‐12 
Expansion
                               • Company A powered ‐‐ that resulted in crossing of 1000 MW (1 GW) of installations in 2011‐12
                               • It was awarded ‐‐ award for “x” and “y” in 2012‐13
Achievements                   • The company ranked –th in Global Transnational companies Survey by the Indian School of Business, 
                                 Hyderabad and Brazil's Fundacao Dom Cabrall




                                                  WIND POWER  MARKET IN INDIA 2013.PPT                                                     11
SWOT Analysis: Domestic Company – Company A
(4/4)
 • Point 1                                                • Point 2




                                                     LE  
                        MP
                     S A
 • Point 4                                                • Point 3




                   WIND POWER  MARKET IN INDIA 2013.PPT               12
Appendix
                                          SAMPLE 
Ratio                          Calculations                             Ratio                        Calculations
                               (Operating                                                            Current Assets / Current 
Operating Margin                                                        Current Ratio
                               Income/Revenues)*100                                                  Liabilities 

Net Margin                     (Net Profit / Revenues) *100                                          {(Cash & Bank Balance + 
                                                                        Cash Ratio                   Marketable Securities) / Current 
                               (Income Before Tax / Revenues                                         Liabilities)} 
Profit Before Tax Margin
                               *100 
                                                                                                     Total Liabilities / Shareholders 
                                                                        Debt to Equity 
                               (Net Income / Shareholders                                            Equity 
Return on Equity (ROE) 
                               Equity)*100 
                                                                                                     {Total Debt / (Shareholders 
                                                                        Debt to Capital Ratio
                               EBIT / (Total Assets – Current                                        Equity + Total Debt)} 
Return on Capital (ROCE) 
                               Liabilities)*100 
                                                                        Interest Coverage Ratio      EBIT / Interest Expense
Return on Working Capital      (EBIT / Working Capital) *100
                                                                        Fixed Asset Turnover         Sales / Fixed Assets 
Return on Assets               (EBIT / Total Assets)*100 
                                                                        Asset Turnover               Sales / Total Assets 
Return on Fixed Assets         (EBIT / Fixed Assets) *100 

                               (Operating Expenses / Sales)             Current Asset Turnover       Sales / Current Assets 
Operating Costs (% of Sales)
                               *100 

Administration Costs (% of     (Administrative Expenses / Sales)        Working Capital Turnover     Sales / Working Capital 
Sales)                         *100 
                                                                                                     Sales / (Shareholders Equity + 
                                                                        Capital Employed Turnover 
Interest Costs (% of Sales)    (Interest Expenses / Sales) *100                                      Total Debt)



                                                   WIND POWER  MARKET IN INDIA 2013.PPT                                              13
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                                                     WIND POWER  MARKET IN INDIA 2013.PPT                                                    14

				
DOCUMENT INFO
Description: For the complete report, get in touch with us at : info@netscribes.com Wind power generation has long been acknowledged as the fastest growing renewable energy sector in the country. Historically, the states of Tamil Nadu, Karnataka, Maharashtra andGujarathave been the leaders in terms of total wind installations due to logistical and geographical advantage. The report begins with an introduction into the energy scenario inIndia. Installed capacity, demand supply gap of power prevailing inIndiaand hence the need for renewable sources of energy is showcased. The market overview section provides an insight into the wind power market which includes the historical and forecasted growth and size of wind installations inIndia. Expected wind energy generation over the next four years is also shown along with value chain prevailing in the wind power industry. It gives a clear overview of the procedure & cost component of wind power generation. Export and Import figures for wind mills & turbines and wind powered generating sets are also shown for the last four fiscal years. An analysis of the drivers explains the factors for growth of the industry which includes the huge untapped wind power potential in the country, energy deficiency condition in India, rising CO2 emissions, volatile global prices of oil and depleting coal reserves. However few challenges plague the wind power sector inIndia which includes withdrawal of GBI and AD schemes, wind power evacuation issues, land acquisition problems and issues of grid integration. Key trends in this sector like potential of off-shore capacity, vertical integration in wind power business, hybrid generators, and major investments in the wind sector are shown. Special initiatives are taken by the regulatory bodies like the Ministry of New and Renewable Energy (MNRE), Indian Renewable Energy Development Agency (IREDA), Centre for Wind Energy Technology (C-WET).