The power sector in India and globally is undergoing a metamorphosis, as technology and renewables are rapidly changing the landscape. Globally, the power costs have fallen steeply. With new technology making it possible to store renewable energy, it is expected that soon consumers will become their own producers. However, in India, the power sector continues to be an enigma. The irony is that there are still millions of people who do not get their power requirements met, and on the other end, we have power producers who are not able to sell power as the DISCOMs are power surplus. To further complicate matters, power prices are at their historic lows whereas the power tariff to consumers is still high. Therefore, this sector is going through a fundamental and transformational shift. The uncertainties and unsynchronised policies have resulted in huge non-performing loans for the banks resulting in tremendous stress in the power sector. There is no doubt that electricity is a basic raw material for every sector – be it agriculture or industry or services, which imply that power sector has huge potential. In spite of that, there is short-term pain due to the ongoing tectonic shift.
India power has been growing prudently. We have been continuously working towards improving our efficiency levels. For instance, our Gaya distribution franchisee (Df) has successfully reduced its T&D loss from 68% (at takeover) to 49% as on 31st march, 2017. By optimising capacities and operational efficiency we are meeting the needs of more than 1,81,652 consumers in Gaya. We have to set new records and achieve new milestones in both conventional and renewable energy portfolio.
FY 2016-17 can be summarised as the year for exploiting operational synergies and capacity expansion. Moreover, we focused on loss reduction and we were able to consistently maintain the T&D loss below 3% recorded in FY 2015-16. One of our landmark acquisitions was Meenakshi Energy Private Limited [now known as Meenakshi Energy Limited (MEL)] from French power giant ENGIE. The thermal plant located in Nellore, Andhra Pradesh has a total capacity of 1,000 MW, of which 300 MW is currently operational. The remaining 700 MW is expected to be operational by 31st March, 2018. This takeover will enable us to capitalise on MEL’s operational efficiency and expand our generation business.
India power is also setting up 450 mw (150 mw x 3) power plant in Haldia, West Bengal. The first unit has been commissioned, the second unit will be commissioned in 2017-18 and the final unit by the end of next financial year. The investment is around 3,500 crore, one of the largest in the state in recent years.
Another significant feather in our cap is our partnership with Uniper Kraftwerke GmbH which is one of the largest power generation companies in the world with about 40 Gw of installed generating capacity across technologies and geographies. Through this joint venture, India Uniper Power Services Private Limited will get access to their pioneering technology and best in-class operational systems. These would include plant operations and maintenance, asset monitoring software and analytical tools flexible utilisation of units, lifecycle extension, supply and integration of pollution control equipment and systems, among others.
Moreover, we entered into an agreement with US Trade and Development Agency, USTDA, which is an arm of the US government. The USTDA helps companies create US jobs through the export of goods and services for priority development projects in emerging economies. The USTDA has agreed to grant funds to IPCL to implement the smart grid technology across our networks, especially at Gaya. Additionally, India Power Green Utility Private Limited (IPGUPL) partnered with Punj Lloyd to develop a 36 MW of solar power plant in Uttarakhand, with an investment of 225 crore which has already been commissioned. IPGUPL’s main focus is to help India Power expand its portfolio of green assets and Punj Lloyd’s partnership will help us in achieving our green energy goals.
Matsya Shipping & Ports Private Limited, a joint venture with Andamax GmbH is engaged in logistics, infrastructure building, designing, developing and setting up of transshipment/ transloading facilities / floating transfer facilities etc.
In FY 2017, we welcomed 150 new members to the India Power family from OUR-EENAKSHIPLANT ARECON?DENT that this will be a long association. We look forward to nurturing the careers of our new members just like we have been doing for our other staff members. Moreover, this year we have stepped up our efforts to meet our sustainability and social responsibility goals. We concentrated our activities around healthcare, education, women empowerment and community development.
We are cognisant of our societal obligation to reduce our carbon footprint by adopting green technologies and innovative practices. We have received several awards commemorating our efforts for a greener plant and a developed society. We have won the National Award for Excellence in CSR and Sustainability in the category of Best Overall Excellence. Besides, we bagged the Asian Power Awards 2016 for Smart Grid Project of the Year and Power Utility of the Year.
Your Company has bravely weathered all challenges in FY 2016-17 and come out stronger. The year 2017 will be pivotal for India Power as we are energised for the future. Our power generation assets are coming on stream with the help of major investments. Approximately 500 MW will be operational by the end of 2017 between Meenakshi and Haldia power plants. These two assets will make the power generation segment a substantial contributor to the Company’s revenues. India Uniper Power Services Private Limited is poised to be the consulting company to our Meenakshi and Haldia power plants. We will showcase our success by way of:
Efficient management of operating and maintenance costs of both locations
Emphasis on the flexibility of technology for preparedness for the next level of generation business
Innovation in fuel management
Technology improvement in power plant
Participation in technology fairs, exhibitions and meetings
Raising awareness about the benefits of technology leading to cost reduction of technology for future ready businesses
Over nine decades of experience in the power segment has permeated an in-depth understanding of the industry. Our flexible approach and adoption of latest technology is well suited to cater to the growing needs of this industry. With our agile attitude towards the business we are confident of etching our name in the industry as one of the best service providers in the power sector.
I would like to thank all shareholders, customers and employees who have been instrumental in crafting the nine decade long legacy of India Power. I am certain that together we will scale new heights of success in the year ahead.
With Best wishes,