A MAJOR RESEARCH PROJECT On

AN EVALUATIVE STUDY OF MARKETING POLICIES FOLLOWED BY INDIAN

POWER SECTOR WITH SPECIAL REFRENCE TO NTPC IN SINGRAULI REGION

For the partial Fulfillment of the award of Master of Business Administration (Business Economics) (2009-2011)

Submitted By: Sunil Kumar Dwivedi MBA(B.E.) 2nd Year

Guided By:

IPS Academy, Indore.

IBMR, IPS ACADEMY, (RAJENDRA NAGAR, A.B.ROAD, INDORE-452012, M.P.) Affiliated to: Devi Ahilya Vishwavidyalaya, Indore
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CERTIFICATE

PREFACE

Beginning of the system project is entirely creative. This does not come all of a sudden, but it comes by result of discussion, consultation and contemplation. Problem unsolved here can never be satisfactory eliminated later. It is therefore a slow process. Moreover practical training is an important part of management courses. The theoretical studies are not sufficient to get into the corporate world. Only practical knowledge can help us to understand the complexities of large scale organizations. To develop healthy managerial and administration skill in potential managers, it is necessary that theoretical knowledge must be supplemented with exposure to the real environment. Actually, it is life for, a management itself is realized. In my case I confronted myself to AN EVALUATIVE STUDY OF MARKETING POLICIES FOLLOWED BY INDIAN POWER SECTOR WITH SPECIAL REFRENCE TO NTPC IN SINGRAULI REGION. And the exposure that I could not have gained from the books. I found it very interesting and challenging. I take knowledge about this project from net and make this project in my own way.

ACKNOWLEDGEMENT

TABLE OF CONTENT
Chapter 1 Introduction: Executive summary of the project 7

Chapter 2

Marketing strategy o Definition o Developing a market strategy o Types of strategy o Strategic models

8 8 8 9 10

Chapter 3

Industry Introduction & NTPC Limited o Industry overview o Power sector in India o NTPC Limited: All About o Current scenario o Evaluation o Issues and challenges o Correlation between NTPC Limited and other major player

11 13 15 19 21 22 24

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Chapter 4

Conclusions and Recommendations

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Appendix 1

Reference material

37

Appendix 2

Bibliography / webliography

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Chapter 1 Chapter 1
Introduction: Executive summary of the project:
We believe that electricity exists, because the electric company keeps sending us bills for it, but we cannot figure out how it travels inside wires. I choose NTPC as my Organization for study as it has number one position in generation and a flagship stations of NTPC, As a Navaratna Company During the introductory phase when I was being introduce my guide, the whole personals and administrations department of NTPC/VSTPS, I came to know much about marketing strategies only through website updates of different years of NTPC, & with help of journals, know much more under guidance of HR deputy manager. I decided to study the marketing policies of organization as my subject. My work is totally concerned with collecting the facts, figures and then compiling them so as to know what is the marketing policy of organization (NTPC, VSTPS) Vindhyanagar Singrauli. During my entire project work I came to know the importance of all the theoretical knowledge which we study with our academic mediums under the guidance of our respected professors.

Chapter 2 Marketing strategy: Definition

Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A strategy that integrates an organization's marketing goals into a cohesive whole. Ideally drawn from market research, it focuses on the ideal product mix to achieve maximum profit potential. The marketing strategy is set out in a marketing plan. Developing a marketing strategy Marketing strategies serve as the fundamental underpinning of marketing plan designed to fill market needs and reach marketing objectives. Plans and objectives are generally tested for measurable results. Commonly, marketing strategies are developed as multi-year plans, with a tactical plan detailing specific actions to be accomplished in the current year. Time horizons covered by the marketing plan vary by company, by industry, and by nation, however, time horizons are becoming shorter as the speed of change in the environment increases. Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned. See strategy dynamics. Marketing strategy involves careful scanning of the internal and external environments which are summarized in a SWOT analysis. Internal environmental factors include the marketing mix, plus performance analysis and strategic constraints. External environmental factors include customer analysis, competitor analysis, target mix analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely to impact success. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement. Besides SWOT analysis, portfolio analyses such as the GE/McKinsey matrix or COPE analysis can be performed to determine the strategic focus. Once a thorough environmental scan is complete, a strategic plan can be constructed to identify business alternatives, establish challenging goals, determine the optimal marketing mix to attain these goals, and detail implementation. A final step in developing a marketing strategy is to create a plan to monitor progress and a set of contingencies if problems arise in the implementation of the plan. Types of strategies Marketing strategies may differ depending on the unique situation of the individual business. However there are a number of ways of categorizing some generic strategies. A brief description of the most common categorizing schemes is presented below: A. Strategies based on market dominance - In this scheme, firms are classified based on their market share or dominance of an industry.

Typically there are four types of market dominance strategies: 1. Leader 2. Challenger 3. Follower 4. Nicher B. Porter generic strategies - strategy on the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firms sustainable competitive advantage. The generic strategy framework (porter 1984) comprises two alternatives each with two alternative scopes. These are Differentiation and low-cost leadership each with a dimension of Focus-broad or narrow. 1. Product differentiation (broad) 2. Cost leadership (broad) 3. Market segmentation (narrow)

C. Innovation strategies - This deals with the firm's rate of the new Product development and business model innovation. It asks Whether the company is on the cutting edge of technology business Innovation.

There are three types: 1. Pioneers 2. Close followers 3. Late followers D. Growth strategies - In this scheme we ask the question, How Should the firm grow?. There are a number of different ways of Answering that question, but The most common gives four answers: 1. Horizontal integration 2. Vertical integration 3. Diversification 4. Intensification

A more detailed scheme uses the categories 1. Prospector 2. Analyzer 3. Defender 4. Reactor Marketing warfare strategies - This scheme draws parallels between marketing strategies and military strategies. Strategic models

Marketing participants often employ strategic models and tools to analyze marketing decisions. When beginning a strategic analysis, the 3Cs can be employed to get a broad understanding of the strategic environment. An anoff Matrix is also often used to convey an organization's strategic positioning of their marketing mix. The 4Ps can then be utilized to form a marketing plan to pursue a defined strategy. There are many companies especially those in the Consumer Package Goods (CPG) market that adopt the theory of running their business centered on Consumer, Shopper & Retailer needs. Their Marketing departments spend quality time looking for "Growth Opportunities" in their categories by identifying relevant insights (both mindsets and behaviors) on their target Consumers, Shoppers and retail partners. These Growth Opportunities emerge from changes in market trends, segment dynamics changing and also internal brand or operational business challenges. The Marketing team can then prioritize these Growth Opportunities and begin to develop strategies to exploit the opportunities that could include new or adapted products, services as well as changes to the 7Ps.

Chapter 3

Industry Introduction & NTPC Limited:

Industry overview

Electricity is one of the most vital infrastructure inputs for economic development of a country. There is a strong demand for electricity in India and it is steadily growing with the countrys economic growth and rising consumerism. The Indian electricity market today offers one of the highest growth potential for private players. Government reforms, e.g. distribution network Reforms Program, would be the key factor driving the power sector. Reforms such as The Electricity Act and National Electricity Policy will give impetus to the Indian power sector. According to our new research report "Indian Power Sector Analysis, there is a huge demand for power in some Indian states due to rapid urbanization and industrialization. Besides, opportunities for private players are increasing with high energy shortage and government support in the form of incentives to set up power plants. We have found that the number of

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merchant power plants will increase in the years to come with state governments inviting private players to invest in the power sector e.g. Gujarat, Maharashtra, Andhra Pradesh, etc. Based on the study of the Indian power sector, we have discovered that the total installed capacity will add around 45000 MW by 2013-14. However, demand is much higher than supply with deficit is projected to be more than 12% during 2010-11. We have also found that renewable energy creates huge opportunities for power generators as the commitment to generate clean energy and environmental obligations have become top priority for most of the nations around the world. However, coal based power will remain the dominant source for energy in India.

The report has also revealed that un-conventional energy sources such as nuclear, wind and solar will fulfill a large chunk of Indias energy need in coming years. Many states are formulating exclusive policies for renewable energies in order to promote and develop these energy sources. Our report focuses on the growing power sector in India. It thoroughly investigates the current market trends, evolving markets and growth prospects for the power industry. It will help clients to analyze the driving forces and leading-edge opportunities critical to the success of the power industry.

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Power sector in India

Due to rapid economic development and government's target of power for all by 2012 the Indian power sector will need to replicate what has been achieved during the last 50 years in the next 10 years." Government's emphasis on the transmission and distribution sector reforms and investments are showing signs of fruition, thus creating a phenomenal growth opportunity for the Indian Power sector. Looking at the importance of transmission & distribution in the Power sector in India, UBM India is pleased to announce its niche event on Power Sector titled T&D India 2011-Indias Premier Exhibition and Networking Event for the Transmission & Distribution sector co-located with India Nuclear Energy scheduled from 29 Sept 2011- 1 Oct 2011 at Bombay Exhibition Centre, Mumbai. The event provides a timely platform for the key players in the utilities industry to exchange ideas and insights on how to take their transmission and distribution and smart grids operations to the next level to meet the demands and challenges of future. T&D India 2011 will be the leading strategy-focused event assembling the Indian TSO and DSO community. This is where the community meets and finds the solutions required to keep up with an accelerating technology race, and gains insight into the demands of a changing industry committed to ensuring security of supply in a complex world. In an effort to meet the demands of a developing nation, the Indian energy sector has witnessed a rapid growth. Areas like the resource exploration and exploitation, capacity additions, and energy sector reforms have been revolutionized.

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However, resource augmentation and growth in energy supply have failed to meet the ever increasing demands exerted by the multiplying population, rapid urbanization and progressing economy. Hence, serious energy shortages continue to plague India, forcing it to rely heavily on imports. It has been noted by the Planning Commission 2002 that primary commercial energy demand has grown at the rate of six per cent between 1981 and 2001. India currently faces coal shortage of 23.96 MT . Production of petroleum reserves has been stretched from 5.7 MT during 1970/71 to 110 MT in 2003/04. Natural gas demand too has been steadily growing at the rate of about 6.5% during the last 10 years. Comprehending that the dependence on energy is expected to increase further to achieve the targeted Gross Domestic Product (GDP) growth rate of 8% during the Tenth Fiveyear Plan, the Government of India has granted high priority to the energy sector. It is estimated that the total primary energy consumption is expected to about 412 MTOE (million tones oil equivalent) and 554 MTOE in the terminal years of the Tenth and Eleventh Plans, respectively (Planning Commission 1999). Renewable energy sources offer viable option to address the energy security concerns of a country. Today, India has one of the highest potentials for the effective use of renewable energy. There is a significant potential in India for generation of power from renewable energy sourceswind, small hydro, biomass, and solar energy. Other renewable energy technologies, including solar photovoltaic, solar thermal, small hydro and biomass power are also spreading. Greater reliance on renewable energy sources offers enormous economic, social, and environmental benefits. The detailed outline of the Indian energy sector explains the demand and supply scenario of coal, power, oil and natural gas in India. It illustrates Indias energy current status, future concerns, and the alternatives available to sustain the developmental process. In the recent years, Indias energy consumption has been increasing at one of the fastest rates in the world due to population growth and economic development. Primary commercial energy demand grew at the rate of six per cent between 1981 and 2001 (Planning Commission 2002). India ranks fifth in the world in terms of primary energy consumption, accounting for about 3.5% of the world commercial energy demand in the year 2003. India is well-endowed with both exhaustible and renewable energy resources. Coal, oil, and natural gas are the three primary commercial energy sources. Indias energy policy, till the end of the 1980s, was mainly based on availability of indigenous resources.

y NTPC

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NTPC Limited

Vision To be the worlds largest and best power producer, powering Indias growth. Mission Develop and provide reliable power, related products and services at competitive prices, integrating multiple energy sources with innovative and eco-friendly technologies and contribute to society. Core Values BCOMIT y y y y y y Business Ethics Customer Focus Organizational & Professional Pride Mutual Respect & Trust Innovation & Speed Total Quality for Excellence

Overview

Indias largest power company, NTPC was set up in 1975 to accelerate power development in India. NTPC is emerging as a diversified power major with presence in the entire value chain of the power generation business. Apart from power generation, which is the mainstay of the company, NTPC has already ventured into consultancy, power trading, ash utilization and coal mining. NTPC ranked 341st in the 2010, Forbes Global 2000 ranking of the Worlds biggest companies. NTPC became a Maharatna company in May, 2010. 14

The total installed capacity of the company is 34,854 MW (including JVs) with 15 coal based and 7 gas based stations, located across the country. In addition under JVs, 5 stations are coal based & another station uses naptha/LNG as fuel. The company has set a target to have an installed power generating capacity of 1,28,000 MW by the year 2032. The capacity will have a diversified fuel mix comprising 56% coal, 16% Gas, 11% Nuclear and 17% Renewable Energy Sources(RES) including hydro. By 2032, non fossil fuel based generation capacity shall make up nearly 28% of NTPCs portfolio. NTPC has been operating its plants at high efficiency levels. Although the company has 17.75% of the total national capacity, it contributes 27.40% of total power generation due to its focus on high efficiency.

Board of Directors Chairperson & MD Shri Arup Roy Choudhury DIRECTORS: A K Rastogi, A K Sanwalka, A K Singhal, Adesh C Jain, Adesh Jain, Arun Kumar Sanwalka, Arup Roy Choudhury, B P Singh, Chandan Roy, D K Jain, G S Sarna, I C P Keshari, I C P Kothari, I J Kapoor, K Dharmarajan, Kanwal Nath, M Govinda Rao, M N Buch, N N Mishra, P K Sengupta, R C Shrivastav, R K Jain, R S Sharma, Rakesh Jain, S P Singh, Santosh Nautiyal, Shanti Narain, V P Joy.

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Growth As per new corporate plan, NTPC plans to become a 75 GW company by the year 2017 and envisages to have an installed capacity of 128 GW by the year 2032 with a well diversified fuel mix comprising 56% coal, 16% gas, 11% nuclear energy, 9% renewable energy and 8% hydro power based capacity. As such, by the year 2032, 28% of NTPCs installed generating capacity will be based on carbon free energy sources. Further, the coal based capacity will increasingly be based on high-efficientlow-emission technologies such as Super-critical and Ultra-Super-critical. Along with this growth, NTPC will utilize a strategic mix of options to ensure fuel security for its fleet of power stations. Looking at the opportunities coming its way, due to changes in the business environment, NTPC made changes in its strategy and diversified in the business adjacencies along the energy value chain. In its pursuit of diversification NTPC has developed strategic alliances and joint ventures with leading national and international companies. NTPC has also made long strides in developing its Ash Utilization business.


Hydro Power: In order to give impetus to hydro power growth in the country and to have a balanced portfolio of power generation, NTPC entered hydro power business with the 800 MW Koldam hydro project in Himachal Pradesh. Two more projects have also been taken up in Uttarakhand. A wholly owned subsidiary, NTPC Hydro Ltd., is setting up hydro projects of capacities up to 250 MW. Renewable Energy: In order to broad base its fuel mix NTPC has plan of capacity addition of about 1,000 MW through renewable resources by 2017. Nuclear Power: A Joint Venture Company "Anushakti Vidhyut Nigam Ltd." has been formed (with 51% stake of NPCIL and 49% stake of NTPC) for development of nuclear power projects in the country. Coal Mining: In a major backward integration move to create fuel security, NTPC has ventured into coal mining business with an aim to meet about 20% of its coal requirement from its captive mines by 2017. The Government of India has so far allotted 7 coal blocks to NTPC, including 2 blocks to be developed through joint venture route. Power Trading: 'NTPC Vidyut Vyapar Nigam Ltd.' (NVVN), a wholly owned subsidiary was created for trading power leading to optimal utilization of NTPCs assets. It is the second largest power trading company in the country. In order to facilitate power trading in the country, National Power Exchange Ltd., a JV of NTPC, NHPC, PFC and TCS has been formed for operating a Power Exchange. Ash Business: NTPC has focused on the utilization of ash generated by its power stations to convert the challenge of ash disposal into an opportunity. Ash is being used as a raw material input by cement companies and brick manufacturers. NVVN is engaged in the business of Fly Ash export and sale to domestic customers. Joint ventures with cement companies are being planned to set up cement grinding units in the vicinity of NTPC stations. 16

 

Power Distribution: NTPC Electric Supply Company Ltd. (NESCL), a wholly owned subsidiary of NTPC, was set up for distribution of power. NESCL is actively engaged in Rajiv Gandhi Gramin Vidyutikaran Yojana programme for rural electrification. Equipment Manufacturing: Enormous growth in power sector necessitates augmentation of power equipment manufacturing capacity. NTPC has formed JVs with BHEL and Bharat Forge Ltd. for power plant equipment manufacturing. NTPC has also acquired stake in Transformers and Electricals Kerala Ltd. (TELK) for manufacturing and repair of transformers.

Subsidiaries NTPC Electric Supply Company Ltd. (NESCL) The company was formed on August 21, 2002. It is a wholly owned subsidiary company of NTPC with the objective of making a foray into the business of distribution and supply of electrical energy, as a sequel to reforms initiated in the power sector. NTPC Vidyut Vyapar Nigam Ltd. (NVVN) The company was formed on November 1, 2002, as a wholly owned subsidiary company of NTPC. The companys objective is to undertake sale and purchase of electric power, to effectively utilise installed capacity and thus enable reduction in the cost of power. NVVN NTPC Hydro Ltd. (NHL) The company was formed on December 12, 2002, as a wholly owned subsidiary company of NTPC with an objective to develop small and medium hydroelectric power projects of up to 250 MW. More>> Pipavav Power Development Co. Ltd. (PPDCL) A memorandum of understanding was signed between NTPC, Gujarat Power Corporation Limited (GPCL) and Gujarat Electricity Board (GEB) in 2004 for development of a 1000 MW thermal power project at Pipavav in Gujarat by forming a new joint venture company between NTPC and GPCL with 50:50 equity participation. Pursuant to the decision of Gujarat Government, NTPC Ltd. has dissociated itself from this company. PPDCL is under winding up. Kanti Bijlee Utpadan Nigam Limited, (formerly known as Vaishali Power Generating Company Limited) To take over Muzaffarpur Thermal Power Station (2*110MW), a subsidiary company named Vaishali Power Generating Company Limited was incorporated on September 6, 2006 with NTPC contributing 51% of equity and balance equity was contributed by Bihar State Electricity Board. This company was formed to renovate the existing unit and run the plant. The second unit has been successfully resynchronized on October 17, 2007 after 4 years of being idle. 17

Bharatiya Rail Bijlee Company Limited (BRBCL) A subsidiary of NTPC under the name of Bharatiya Rail Bijlee Company Limited was incorporated on November 22, 2007 with 74:26 equity contribution from NTPC and Ministry of Railways, Govt. of India respectively for setting up of four units of 250 MW each of coal based power plant at Nabinagar, Bihar. Investment approval of the project was accorded in January, 2008.

Current Scenario y The latest figures released by the Central Electricity Authority (CEA) indicate a 5.5% growth in electricity generation in India during the financial year 2010-11. Power generation recorded a CAGR of 5.17% during the period 2001-02 to 2010-11. Highlights of power sector developments in 2010-11. The total thermal generation has achieved a growth rate of 3.81%. Coal-based generation recorded a growth rate of 3.99%.Growth of thermal generation was mainly restricted due to coal shortages, receipt of poor quality/ wet coal, delay in commissioning of power plants. The average PLF of thermal power projects (coal/lignite) achieved during the year was 75.10%, as compared to 77.68% in the previous year. As on March 31, 2011, 29 power stations had critical coal stock position (of less than 14 days) and 13 power stations with super critical stock meaning stock for less than 4 days. Gas-based power generation witnessed a setback due to lower fuel availability from the Reliance Industries owned KG-D6 basin.

y y

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Revival of good monsoon after two successive years of deficient/scanty rain fall resulted in a 10% growth in hydro power generation. The nuclear generation achieved a remarkable growth rate of 41.04% due to improved availability of nuclear fuel to the nuclear plants, and additional generation from the newly commissioned nuclear unit at Kaiga in January11 & re-commissioning of some of the units after repairs & maintenance works. Indias power sector attracted $2.1 billion in private equity (PE) funds last year, making up 46 percent of total PE infrastructure investments and 28 percent of all PE investments in India. The largest PE deal in power to date was also inked in 2010. Asian Genco received a $425 million investment from an unusually large consortium of global investors led by Morgan Stanley Infrastructure Partners and including General Atlantic, Goldman Sachs, Norwest Venture Partners and Everstone Capital.

Evaluative study as per current scenario

Growth of Power Sector infrastructure in India since its Independence has been noteworthy making India the third largest producer of electricity in Asia. Generating capacity has grown manifold from 1,362 MW in 1947 to 113,506 MW (as on 30.09.2004). The over all generation in India has increased from 301 Billion Units (BUs) during 1992- 93 to 558.1 BUs in 2003- 04. In its quest for increasing availability of electricity, India has adopted a blend of thermal, hydel and nuclear sources. Out of these, coal based thermal power plants and in some regions, hydro power plants have been the mainstay of electricity generation. Oil, natural gas and nuclear power accounts for a smaller proportion.. 19

Power forms a vital part of infrastructure development. In India, recently, the sector has been riddled with poor order inflows. But the growth in power generation has been encouraging. Renewable forms of power generation also have shown strong growth over the past few months. There have been large orders for wind projects and nuclear power generation and hydro generation have crossed the targets set by the Central Electricity Authority (CEA) for April 2011. According to a research report by IDFC Securities on the status of infrastructure development, Order inflows (in infrastructure) in April 2011 fell sharply by 49% yearon-year, due to very few orders in the power generation segment, which has been the mainstay of order inflows. Power generation has grown by 7.6% over the previous year for April 2011. In 2010-11, the power generation sector contributed 45% to the total order inflows of the infrastructure sector. Power transmission and distribution (T&D) was the second highest contributor with 16.9%. However, orders for the power generation sector fell in April 2011 to Rs8 billion, which is the lowest in two years. Consequently, the order inflows for infrastructure overall during the month fell by half to Rs76 billion from the corresponding period a year ago.

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Issues and challenges

1. Demand-Supply Gap:

1. India has always been a power-deficient country. The demand for power is huge in India. As seen in the above graph, the supply of power in India has not been able to meet its demand. Under the Governments Power for all by 2012 plan, it has targeted per capita consumption of 1000 kWh by the end of the 11th Five Year Plan (2007-2012) as compared to levels of 734 kWh in 2008-09. In order to provide per capita availability of over 1000 kWh of electricity by year 2012, it is estimated that capacity addition of more than 1,00,000 MW would be required. This shows that huge capacity additions are required at good efficiency rates, indicating that the opportunities available in this sector are huge and if they are in right direction, they will lead india to the development. 2) Government: -

The role of the Government in the development of Indian power industry has been very crucial. Governments policies aim at protecting consumer interests and making the sector commercially viable. Government regulates this industry in various ways (Tariff control, Subsidies, environment norms, etc.) due to its linkages to various industries and to the growth of the economy. - Regulatory role of Government: - As far as regulation is concerned, Electricity Act, 2003 is a very important Act as it allowed private sector participation in the generation of power, thus creating competition. It also allowed 100% FDI participation in the power generation, transmission and distribution, thus inducing investments in the power sector. - Government Schemes: - The Government is investing in this industry through various development schemes: y The Rural Electrification Program is an effort to lighten up villages which have faced acute shortage of Power over the years. y Power for All by 2012 plan aims at a per capita consumption of 1000kWh by the end of the 11th Five Year Plan (2007-12).

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The Accelerated Power Development and Reform Programme (APDRP) programme is being implemented so that the desired level of 15 per cent AT&C (Aggregate Technical and Commercial) loss can be achieved by the end of 11th plan (Currently it is 30%).

- Projects under pipeline: - The Government of India is planning nine Ultra Mega Power Projects (UMPP) of 4 GW each with an estimated individual investment of US$ 4 billion (Rs. 192 billion). Four of these projects are expected to be commissioned between 2011 and 2017. The UMPP is an initiative by the government to collaborate with power generation companies to set up 4,000 MW projects to ease the countrys power deficit situation. 3) Raw Materials: Thermal power segment, which has the largest capacity generation share in the Indian power industry, is dependent on inputs like coal, oil and gas for the generation of power. Coal shortages and the low thermal quality of coal supplies cause disruptions in power generation and result in lower plant load factors. When domestic supply of coal is insufficient, coal is imported. This is unfavorable for power companies as it leads to rise in costs. With these problems associated with thermal power, the Power Companies enter in to Long Term Agreements (LTA) with coal suppliers or acquire coal mines to ensure regular supply of coal. Besides, currently coal players in India are adopting aggressive strategies by acquiring Coal mines outside India. Domestically, a good number of coal mines have received environmental clearances. Such actions will be beneficial for thermal power players. Gas-based power plant face problems because of shortages in gas supply. The discoveries in the Krishna-Godavari Basin are expected to improve gas availability in India which is a big positive for Indias gas-based plants. 4) Transmission and Distribution: Transmission of electricity is defined as the bulk transfer of power over a long distance at a high voltage. Transmission and Distribution is as important as generation. The capacity additions to meet Indias growing power demand should be supplemented by adequate transmission infrastructure. Globally, every dollar invested in generation has an equal amount invested in transmission and distribution. However, in India traditionally every dollar invested in generation has a corresponding half a dollar invested in transmission and distribution. Due to this, transmission capacity in India lags behind the generation capacity. Huge investments are required in Transmission and Distribution if Indias power sector is to meet the rising power demand.

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5) FDI Equity Flows in Power Sector: -

In India, 100% FDI is allowed in the Generation, Transmission and Distribution segments of the Power Sector. The FDI inflow in the Power Sector has been on the rise in the last 5 years. This trend is expected to continue in the coming years considering the huge opportunities available in the sector. FDI inflow is important for the power sector because it brings in money and Indias power sector is in huge need of investments. More importantly, FDI also brings in advanced technology making the sector more efficient. Hence, this proves to be a major growth driver for the power sector.

6) Growth Drivers for Power from Nuclear, Hydro and Renewable Energy Sources:
With the thermal power generation segment facing the issue of shortages of coal (major raw material), other power generation sources like nuclear, hydro and renewable energy sources will get attention in the coming years. Nuclear power projects account for 2.75% of Indias total installed capacity which is about 4.77 GW. The Planning Commissions expert committee on an Integrated Energy Policy has suggested in its report that there is a possibility of reaching a nuclear power capacity of 21-29 GW by 2020 and 48-63 GW by 2030. The hydro power segment offers investment opportunities as India is considered to have hydro power generation potential worth 1,50,000 MW; of which only 25% has been harnessed till date Using renewable sources to generate electricity has several advantages like a perennial energy source, potential for lower reliance on imported fossil fuels and lower CO2 emissions. However, at present the major hurdle facing rapid expansion of renewable power is high initial cost as compared to the competing fuels. But taking in to consideration the environmental concerns, this segment receives encouragement from the Government. Its share in the countrys total 23

generation capacity has increased from 1.1% in 2001-02 to 10.63% as on 31st March, 2011 and is expected to increase in the future. These three non-thermal sources of power also offer good investment opportunities. Companies are diversifying their power portfolios to take advantage of opportunities available in hydro power and renewable energy sources.

Challenges
Power Sector is a highly capital-intensive industry with long gestation periods, before the commencement of revenue generation. Since most of projects have a long time frame (4-5 years of construction period and operating period of over 25 years), there are some inherent risks which this sector faces. A. Availability of Coal: Coal is the mainstay of the power production in India and is expected to remain so in the future. India has limited coal reserves, plus, availability of domestic coal is a challenge on account of various bottlenecks such as capacity expansion of Coal India Limited (the largest coal producing company in the world, coal blocks allocation, tribal land acquisition, environmental and forest clearances, etc. Transportation of coal is a big concern in itself. Within the country, coal is transported by Indian Railways and in case of imports; coal is to be unloaded at ports. In both cases, India currently faces capacity shortage. Hence, a project developer has to account for and manage its logistics chain in a manner that ensures regular fuel supply which is a big challenge. B. Dependence on Equipment Suppliers: The power sector is heavily dependent on Equipment suppliers. In fact, equipment shortages have been a significant reason for India missing its capacity addition targets for the 10th five year plan. While the shortage has been primarily in the core components of boilers, turbines and generators, there has been lack of adequate supply of Balance of Plant (BOP) equipment as well. These include coal handling, ash-handling plants, etc. Apart from these, there is shortage of construction equipment as well. Hence, inadequate supply of equipments is a cause of concern for the power companies. C. Aggregate Commercial and Technical Losses: The Aggregate Technical and Commercial Loss (AT&C) is defined as the power lost due to inefficient transmission and distribution infrastructure. Indias AT&C losses are as high as 30% compared with 5-10% in the developed markets which means out of every 100 units produced, 30 are lost during transmission and distribution. Technical losses are due to inadequate investments over the years for system improvement works. Commercial losses are mainly due to low metering efficiency, pilferage and theft of power. This is a huge problem for the power sector.

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D. Other Roadblocks leading to Demand Supply Gap: The power sector has other concerns like shortage of skilled manpower for construction and commissioning of projects, contractual disputes between project authorities, contractors and their sub-vendors, delay in readiness of balance of plants by the executing agencies. Difficulties have been experienced by developers in land acquisition, rehabilitation, environmental and forest related issues, inter-state issues, geological surprises (particularly for Hydro projects) and contractual issues. These issues continue to pose challenges to maintain the pace of development of power projects.

Correlation between NTPC and other major players

While investing, one must always invest in the stocks of a company that operates in an industry with bright long-term prospects. Further, the companys 10 YEAR X-RAY and future prospects should also be Green. In the case of the power sector, though, it is poised for good growth in the future, it remains to be seen whether the above companies can completely take benefit of this growth and reflect it in their performance. Because of the very nature of the power sector (capital intensive high debt), most of these companies have had muted growth in one or more of their parameters. Hence, investors with some appetite for risk can consider investing in these companies, but only at the right price. (I.e. when the market offers an attractive discount)

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Other than NTPC there are number of companies engaged in the power production business. Some of the top companies are listed below: 1) Torrent Power - Like Adani Power,it is a Gujarat based company with interest in both transmission and generation. Torrent has a generation capacity of 1647.5 MW and distributes power in Ahmadabad, Gandhi agar, Surat, Bhiwandi and Agra.It is expanding in Gujarat and Uttar Pradesh. 2) NHPC State owned like NTPC, this hydro power focused Power Company came out with an IPO with much fanfare. However slow implementation and lower profits have resulted in the stock prices declining a lot. However the company aims to double its electricity generation of 5 GW in the next 5 years or so by focusing on hydel generation in the Northern states of India. 3) Tata Power The largest private utility in India has ambitious plans to grow like the other private sector companies in India. The company has interests in electricity distribution as well. Tata Power has a presence in thermal, hydro, solar and wind areas of power generation, transmission and retail with a capacity of nearly 3 GW. Tata Power is building numerous power plants and transmission projects in JV. 4) Reliance Power Reliance Power part of the ADAG Group came out with the biggest IPO of its time before the Lehman crisis. The company part of the ADAG Group has the most ambitious expansion plans in the country. The company is raising huge amounts of capital from Chinese banks and placed the largest power equipment order with Don Fang Electric. The company is currently constructing 3 4000 MW projects and has plans of building 35 GW capacity with a mix of hydel, gas and coal based plants. The company also win a solar thermal project in JNNSM bidding. 5) Adani Power Power Limited is part of Adani Group with capacity of 1980MW.The company currently operates Indias only supercritical power plant in Gujarat. The company is currently implementing 16500 MW at different stages of construction..The company is currently implementing thermal projects of 3300MW at Maharashtra and 1320MW at Rajasthan. The Adani Group has bought coal mines outside the country and with its port and shipping companies forms an integrated coal to power story. 6) Damodar Valley Corporation DVC is a state owned organization with interests in flood control, irrigation, generation, transmission and distribution of electricity located in the Damdoar Valley in the east of the country. There are hydro-electric power stations at Tilayia, Maithon and Panchet, with total installed capacity of 144 MW.DVC operates thermal power stations at with total capacity of 2745 MW. DVC is expanding its thermal power capacity and with the completion of its present plans by 2012 it would be generating more than 11000 MW of power 7)Lanco Infratech - Lanco is fast emerging Andhra Pradesh based Group and has become a top private sector power developer with 2 GW capacity and another 18 Gw under development. Lanco through its step down Australian subsidiary, Lanco Resources Australia, has acquired Griffin Coal Mining Company and Carpenter Mine Management.

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8) SJVN SJVN is the second largest hydel power company in India which is a JV between the Indian government and the Himachal Pradesh state. The company owns the largest hydro plant in India the Nathpa Jhakri Hydroelectric 1500 MW Power Project .The company is trying to expand like NHPC but has been facing execution problems. 9) Nuclear Power Corporation of India ( NPCIL) Another state owned company, NPCIL is focused on generating Nuclear Power. The company operates around 4.5 GW of Nuclear Capacity in 6 locations. The company is expected to expand hugely in the future with India planning to add around 2 GW of Nuclear Power over the next decade. 10) CLP Power - CLP India Private Ltd. is a wholly owned subsidiary of CLP Holdings, a leading investor-operator in the Asia Pacific energy sector.CLP is also the largest foreign investor in Wind Power in India with over 450MW of wind power projects which are spread across 5 states. This apart, it is also in the process of developing a 1320MW coal firedpower plant located at Jhajjar, Haryana, which is due for commissioning in Dec 2011.It also owns a gas power plant in Gujarat. 11) Neyveli Lignite Corporation -Neyveli Lignite Corporation is a PSU like NTPC and is also involved in lignite mining company in India. The company is mainly based out of the southern state of Tamil Nadu and mines some 24 million ton of lignite per year with an installed capacity of 2490 MW.

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Chapter 4
Conclusions and Recommendations
Power can be generated from water (hydro), thermal (coal or naphtha), wind and nuclear. Since the Indian power sector has not been opened up for private sector participation in its true sense, the centre and state governments have a major role to play. It is a politically sensitive sector i.e. tariffs cannot be hiked as the vote bank could be affected. A power company can be a generator, a transmitter, a distributor or acombination of all three. Barriers to entry are high because it is capital intensive and regulated. While technology in state government undertakings is poor, it will play a big role in the future, as consumers will require good quality and uninterrupted supply of power. Currently, in India, we have 1,07,533 MW of generation capacity out of which private sector contributes 11%. Lets have a look at the revenue model for a power company.

Total revenues = Revenues from generation + transmission + distribution

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Generation
For a company involved in generation of power, revenues will be a function of electricity generated and tariffs applicable. Generation of electricity is a function of PLF (plant load factor) and the capacity installed. PLF, in simple words, is like capacity utilisation. The level of PLF varies depending upon the kind of generation plant. Generally, a hydro power plant or a wind energy plant have low PLF (industry average 35%-50%). Thermal and nuclear power plants have higher PLF (industry average 50%-65%), which ultimately results in higher production. Investment in capacity in the power sector depends on various factors like: demand-supply gap (in simpler words we can say deficiency), availability of funds, economic growth and regulatory framework. All these factors are inter-related to some extent. Demand and supply One critical factor when it comes to analyzing a power company is the fact that demand expands as per supply. There is nothing like a market size per se. The level of the growth in the industrial sector, per capita consumption of consumer durable and electronic goods would indicate the growth potential. For instance, the penetration level of air conditioners in India is just 0.5%. If more people buy A/C or television or refrigerator, demand for power will increase. Therefore, as far as demand-supply gap for a developing economy like India is concerned, it is irrelevant. The country is power deficient. Availability of funds As we had mentioned before, the sector is capital intensive. It costs almost Rs 40 m to Rs 45 m to set up one megawatt (MW) of capacity. If a company is planning to increase capacity by 1,000 MW, it requires Rs 40 bn. From a retail investor perspective, look at the cash balance and the current debt to equity ratio of the company from the balance sheet. This will give an idea whether the company really has the muscle power to expand the stated capacity in the time frame mentioned. Economic Growth will lead to increase the purchasing power of the people, which will raise the living standard and in turn increase electricity demand. So, the circle starts again. Regulatory framework If a company is just into generation, it has to supply to a distributor for realising value for the quantity of power sold. If the distributor is a SEB (i.e. state electricity board), the chances of delayed payment are high, as SEBs are in poor state. Failure to receive money from SEBs could hamper a companys capacity expansion plans. Having looked at the capacity side, consider factors involved on the tariffs front. For a generation company that supplies electricity to a SEB, the respective state governments fix tariffs. However, a power generation company can also supply to the national grid at a specific rate. The national grid say, Power Grid Corporation, in turn could take the onus of meeting SEB requirements. While the advantage is lower risk of delayed payment and fewer losses on account of T&D, the disadvantage is that the tariffs are lower compared to a T&D player.

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Transmission There can be independent transmission companies as well (like backbone service providers in the telecom sector). The revenue model is similar. A transmission company buys power from a generation company and hands it over to SEBs or a distribution company. When it comes to advantages, it is like less capital and technology intensive. But a transmission company faces the risks of default of payment by a distributor, high leakage losses and a cap on transmission charges. Approximately 30%-35% or power generated is lost in transmission currently. Distribution The distribution company can also generate electricity in-house, but the process remains same. Distribution Companies have pre-defined areas called circles where they can supply electricity. For a distribution company, metering plays a vital role. Metered units = In-house power generated (if any) + Power sourced from a generator to meet additional requirement T&D losses. A major concern for the Indian distribution companies is heavy T&D losses due to poor infrastructure. Due to weak anti-theft laws, 10%-15% of power supplied is lost in distribution.

RECOMDATIONS:
The capacity addition programmed for the 9th Plan envisaged around 17,588 MW to be added by private generating companies. In order to achieve the targeted private sector capacity addition during the Ninth Plan, the following additional facilitating measures have recently been suggested by the promoters. Most of these have been accepted while some of them are under the consideration of the Government. Speedy environmental clearance The Ministry of Environment and Forests has agreed to delegate the powers to States for environmental clearance of: all co-generation plants and captive plants up to 250 MW; - Coal based plants up to 500 MW using fluidized technology subject to sensitive areas restrictions; Power stations up to 250 MW on conventional technology. - Gas/Naphtha based stations up to 500 MW. Viability of SEBs The financial health of the SEBs will be improved through rationalization of tariff, restructuring and reforms to make them economically viable and their projects bankable to generate energy on economic rate, to provide quality services to the consumers and to ensure a fair return to the investors. This can be best achieved by unbending single entity (SEBs) and corporatizing the same for the above activities. In this context, some of the States have taken initiative by unbundling their respective SEBs into separate companies for Generation & Transmission & Distribution. Regulatory bodies The Government of India has promulgated Electricity Regulatory Commission Act, 1998 for setting up of Independent regulatory bodies both at the Central level and at the State level viz. The Central Electricity Regulatory Commission (CERC) and the State Electricity Regulatory

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Commissions (SERCs) at the Central and the State Levels respectively. These regulatory bodies would primarily look into all aspects of tariff fixation and matters incidental thereto. Current problem of power sector The most important cause of the problems being faced in the power sector is the irrational and unremunerative tariff structure. Although the tariff is fixed and realized by SEBs, the State Governments have constantly interfered in tariff setting without subsidizing SEBs for the losses arising out of State Governments desire to provide power at concessional rates to certain sectors, especially agriculture. Power Supply to agriculture and domestic consumers is heavily subsidized. Only a part of this subsidy is recovered by SEBs through cross subsidization of tariff from commercial and industrial consumers. The SEBs, in the process, have been incurring heavy losses. If the SEBs were to continue to operate on the same lines, their internal resources generation during the next ten years will be negative, being of the order of Rs.(-) 77,000 crore. This raises serious doubts about the ability of the States to contribute their share to capacity addition during the Ninth Plan and thereafter. This highlights the importance of initiating power sector reforms at the earliest and the need for tariff rationalization. Power sector reforms The Orissa Government was the first to introduce major reforms in power sector through enactment of Orissa Reforms Act, 1995. Under this Act, Orissa Generating Company, Orissa Grid Company and Orissa Electricity Regulatory Commission have been formed. Similarly, the Haryana Government has also initiated reform programme by unbundling the State Electricity Board into separate companies and Haryana Electricity Regulatory Commission has already been constituted. With a view to improve the functioning of State Electricity Boards, the Government promulgated the State Electricity Regulatory Commission Act for establishment of Central Electricity Regulatory Commission at the national level and State Electricity Regulatory Commission in the States for rationalization of tariff and the matters related thereto. Subsequent to the enactment of ERC Act, 1998 more and more States are coming up with an action plan to undertake the reform programmed. In this respect, Governments of Uttar Pradesh, Rajasthan, Madhya Pradesh, Goa, Karnataka and Maharashtra have referred their proposals for setting up independent regulatory mechanism in their States. The Electricity (Amendment) Act 1998 was passed with a view to make transmission as a separate activity for inviting greater participation in investment from public and private sectors. The participation by private sector in the area of transmission is proposed to be limited to construction and maintenance of transmission lines for operation under the supervision and control of Central Transmission Utility (CTU)/State Transmission Utility (STU). On selection of the private company, the CTU/STU would recommend to the CERC/SERC for issue of transmission license to the private company. In this regard, the Government of Karnataka is the first to invite private sector participation in transmission by setting up joint-venture company. Other States are also in the process of introducing the reforms in the transmission sector. In view of the urgent need to reduce transmission and distribution losses and to ensure availability of reliable power supply to the consumers reforms in the distribution sectors are also been considered by establishing distribution companies in different regions of the State. The 31

entry of private investors will be encouraged wherever feasible and it is proposed to carry out these reforms in a phased manner. The Governments of Orissa and Haryana have already initiated reforms in the distribution sector by setting up distribution companies for each zone within their States. With these efforts, it is expected that the performance of power sector will improve because of rationalisation of tariff structures of SEBs and adequate investment for transmission and distribution sector. Capacity addition during 9th plan Power supply position at the beginning of 9th plan The total installed capacity at the beginning of 9th Plan i.e. 1.4.97 was 85,795 MW comprising 21,658 MW Hydro, 61,012 MW Thermal including gas and diesel, 2,225 MW Nuclear and 900 MW Wind based power plants. The actual power supply position at the beginning of the 9th Plan indicates peak shortage of 11,477 MW (18%) and energy shortage of 47,590 MU (11.5%) on All India basis. To meet the growing demand and shortages encountered, sufficient capacity would need to be added in subsequent plan periods. Ninth plan capacity addition programme The Working Group on Power, constituted by Planning Commission, in its report of December 1996 had formulated, a need based capacity addition programme of 57,735 MW for the Ninth Plan which would by and large meet the power requirements projected in 15th Electric Power Survey Report. However, it was felt that this capacity addition of 57,735 MW is not feasible and a target for capacity addition of 40245 MW was fixed for Ninth Five-year plan. The above target was finalized after considering the status of Sanctioned/ongoing schemes, new projects in pipeline, likely gestation period for completion of the projects and likely availability of funds. The Sector-wise/type-wise details are given below: Sector-wise / type-wise capacity addition programme during ninth plan (Figures in MW) Sector Central State Private TOTAL Hydro 3455.0 5814.7 550.0 9819.7 Thermal 7574.0 4933.0 17038.5 29545.5 Nuclear 880 ----880.0 Total 11909 10747.7 17588.5 40245.2

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Environmental impact of thermal power stations

Thermal Power Stations in India, where poor quality of coal is used, add to environmental degradation problems through gaseous emissions, particulate matter, fly ash and bottom ash. Growth of manufacturing industries, in public sector as well as in private sector has further aggravated the situation by deteriorating the ambient air quality. Ash content being in abundance in Indian coal, problem of fly ash and bottom ash disposal increase day by day. The fly ash generated in thermal power station causes many hazardous diseases like Asthma, Tuberculosis etc. Air pollution Initially, perceptions of objectionable effects of air pollutants were limited to those easily detected like odour, soiling of surfaces and smoke stacks. Later, it was the concern over long term/chronic effects that led to the identification of six criteria pollutants. These six criteria pollutants are sulphur di-oxide (SO2), Carbon Mono-oxide (CO), Nitrogen oxide (NO2), Ozone (O3), suspended particulates and non-methane hydrocarbons (NMHC) now referred to as volatile organic compounds (VOC). There is substantial evidence linking them to health effects at high concentrations. Three of them namely O3, SO2 and NO2 are also known phytotoxicants (toxic to vegetation). In the later part Lead (Pb) was added to that list. Nitrogen Oxide (NOx) Most of the NOx is emitted as NO which is oxidised to NO2 in the atmosphere. All combustion processes are sources of NOx at the high temperature generated in the combustion process. Formation of NOX may be due to thermal NOxwhich is the result of oxidation of nitrogen in the air due to fuel NOx which is due to nitrogen present in the fuel. Some of NO2 will be converted to NO3 in the presence of 02. In general, higher the combustion temperature the higher NOx is produced. Some of NOx is oxidised to NO3, an essential ingredient of acid precipitation and fog. In addition, NO2absorbs visible light and in high concentrations can contribute to a brownish discoloration of the atmosphere. Sulphur Oxide The combustion of sulphur containing fossil fuels, especially coal is the primary source of SOx. About 97 to 99% of SOxemitted from combustion sources is in the form of Sulphur Di-oxide which is a criteria pollutant, the remainder is mostly SO3, which in the presence of atmospheric water is transformed into Sulphuric Acid at higher concentrations, produce deleterious effects on the respiratory system. In addition, SO2 is phytotoxicant. Particulate matter The terms particulate matter, particulate, particles are used interchangeably and all refer to finely divided solids and liquids dispersed in the air. Water pollution Water pollution refers to any change in natural waters that may impair further use of the water, caused by the introduction of organic or inorganic substances or a change in temperature of the water. In thermal power stations the source of water is either river, lake, pond or sea where from water is usually taken. There is possibility of water being contaminated from the source itself. Further contamination or pollution could be added by the pollutants of thermal power plant waste as inorganic or organic compounds. Land degradation

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The thermal power stations are generally located on the non-forest land and do not involve much Resettlement and Rehabilitation problems. However it's effects due to stack emission etc, on flora and fauna, wild life sanctuaries and human life etc. have to be studied for any adverse effects. One of the serious effects of thermal power stations is land requirement for ash disposal and hazardous elements percolotation to ground water through ash disposal in ash ponds. Due to enormous quantity of ash content in India coal, approximately 1 Acre per MW of installed thermal capacity is required for ash disposal. According to the studies carried out by International consultants if this trend continues, by the year 2014-2015, 1000 sq. km of land should be required for ash disposal only. Noise pollution Some areas inside the plant will have noisy equipments such as crushers, belt conveyors, fans, pumps, milling plant, compressors, boiler, turbine etc. Various measures taken to reduce the noise generation and exposure of workers to high noise levels in the plant area will generally include: Silencers of fans, compressors, steam safety valves etc. Using noise absorbent materials Providing noise barriers for various areas Noise proof control rooms Provision of green belt around the plant will further reduce noise levels Technology up gradation Clean coal technologies Clean coal technologies offer the potential for significant reduction in the environmental emissions when used for power generation. These technologies may be utilized in new as well as existing plants and are therefore, an effective way of reducing emissions in the coal fired generating units. Several of these systems are not only very effective in reducing SOx and NOx emissions but, because of their higher efficiencies they also emit lower amount of CO2 per unit of power produced. CCT's can be used to reduce dependence on foreign oil and to make use of a wide variety of coal available. Blending of various grades of raw coal along with beneficiation shall ensure consistency in quality of coal to the utility boilers. This approach assumes greater relevance in case of multiple grades of coals available in different parts of the country and also coals of different qualities being imported by IPPs. Ministry of Environment and Forests vide their notification dated 30th June 1998 had stipulated the use of raw or blended or beneficiated coal with an ash content not more than 34% on an annual average basis w. e. f. 1st June 2001. CPCB has constituted a Steering Committee consisting representative from some SEBs, CPCB, Ministry of Coal, Ministry of Power, CEA and World Bank to carry out cost benefit analysis of using clean coal technologies and assess and prioritize technically feasible and economically viable measures to improve coal quality.

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Refurbishment of existing thermal power stations Continuous deterioration in performance of thermal power stations had been observed during early 80's. Therefore, Renovation and Modernization Schemes(R&M Schemes) were drawn and executed for improving the performance of existing thermal power stations. Pollution control measures in these power stations being a capital-intensive activity, it accounted for major portion-around 40% of Rs. 12 Billion kept for R&M schemes under phase-I. During phase-I, 163 units of 34 thermal power stations were covered. As a result of R&M schemes these achieved 10,000 million units of additional generation per annum against the target of 7000 million units. Encouraged by the results achieved, R&M phase-II programme is presently under progress. Total estimated cost of these works is Rs. 24 Billion. Most of the Electricity Boards or other generating agencies are facing financial constraints to carry out R&M activities. Therefore, this area has to be taken on priority to arrange financial assistance.

CONCLUSION

y y y y

y y y

The power sector shares an important role in the total economic development of the country and may be declared as the backbone of all the major industrial function. As the production of power within the country is due to the extraction of non-renewable sources of energy, therefore the usage must be wisely. The Demarketing practice must be followed so as to discourage the wastage of precious power. Special awareness camps and campaigning must be done to create a sense of responsibility within the population. For example the green lartern project launched with the states of Bihar and Jharkhand among the tribals by the NTPC. The production and the distribution must be well fabricated so that minimum loss is done. for example NTPC hires PGCIL ( power grid corporation of India limited) for its high tension power supply process. Local bodies should be framed so as fill the gap between government and population. For example NTPC framed CSR ( corporate social responsibilities) at the ground level. Well trained and professionals manpower must be used for the best of the results. Appropriate training institutes should be engaged in quality training and teaching. like NTPC does through EDC ( employee development centers).

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Appendix 1: Reference material:

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