POWER SECTOR - MARKETING :POWER SECTOR - MARKETING 5th THERMAL PRODUCT COMMITTEE MEETING AT BHEL HARDWAR January 11, 2008


Highlights Of The Year :Highlights Of The Year


Highlights :Highlights Highest ever order inflow till December in a year – Rs 28972 Crs ( ~ 10665 MW) First Order for 500 MW Turbine Generator and Secondary Cycle Piping for Nuclear Set based on Fast Breeder Reactor from Bhavini for Kalpakkam Project. Entry into 600 MW rating Thermal sets – ICB Bid submitted for North Chennai (1x600 MW), Dehrand (4x600 MW), Kalisindh 2x600 MW Entry into Super-critical Business: Successfully competed for SG Package of Barh (2x660 MW) Stage II.


Highlights … contd. :Highlights … contd. MOU signed with TNEB for formation of JV for setting up Udangudi (2x800 MW) Super-critical Power Project in Tamil Nadu MOU signed with NTPC for formation of JV for EPC business for Thermal, Gas and Hydro Projects. Introduction of Up-graded Sets - First Order received for 270 MW Thermal Set for Sikka (2x270 MW ). LOI also received for 2x270 MW Govindwal. - First order received for 525 MW Set Maithon (2x525 MW)


Highlights … contd. :Highlights … contd. Entry into Advance Class 9FA GT business – LOA received for 350 MW Nagathone. LOIs also received for 700 MW Pipavav CCPP and 350 MW Hazira CCPP.


Business Environment :Capacity addition of 78,577 MW envisaged during XI Plan and 82,200 MW in XII plan. 12450 MW balance orders - targetted to be completed by March 2008 as per MOP – to go up to 2008-09 Competitors setting manufacturing base in India (L&T with MHI, Skoda, Cethar Vessel with Harbin Power, VA-Tech, Alstom, Ansaldo) Chinese Sets commissioned (Yamuna Nagar & Durgapur) – Performance being watched by various Utilities Business Environment


Business Environment …. Contd. :L&T - MHI JV now getting qualified for super-critical Units. VA-Tech and Alstom being accorderd status of domestic bidders for Mega Hydro Projects – reducing the benefit of Price preference available to BHEL in ICB. Delays in Project Completion affecting Customers’ confidence in BHEL’s capabilities impacting business on negotiated route. Business Environment …. Contd.


Business Environment …. Contd. :Foreign manufactures entering in 250 MW / 500 MW Thermal segment. CEA’s recommendations to specify 250/ 500 + 20%. Stiffer competition expected as Global Power Equipment Manufacturers will focus on Indian Market. Challenge from China and Korea. 6% growth in Global Power Generation Market till 2011. Capacity addition growth rate in China to drop to 4.1% from 15.7% by 2009 More EPC players entering the market. (REL, BGR, L&T etc.) Business Environment …. Contd.


XIth Plan Capacity Addition Programme :XIth Plan Capacity Addition Programme


DETAILS OF XI PLAN PROJECTS (MW) :DETAILS OF XI PLAN PROJECTS (MW)


Business Potential :Business Potential Market Scenario…...


Business Potential :Business Potential Order Book Position…...


Slide 15:ORDER BOOKING PROJECTIONS FOR 2007-08


ORDERS BOOKED DURING THE YEAR UP TO DEC 2007 :ORDERS BOOKED DURING THE YEAR UP TO DEC 2007


FURTHER ORDERS EXPECTED DURING THE YEAR :FURTHER ORDERS EXPECTED DURING THE YEAR


EXPECTED ORDER BOOKING IN 2008-09 :EXPECTED ORDER BOOKING IN 2008-09


EXPECTED ORDER BOOKING IN 2008-09 :EXPECTED ORDER BOOKING IN 2008-09


EXPECTED ORDER BOOKING IN 2008-09 :EXPECTED ORDER BOOKING IN 2008-09


EXPECTED ORDER BOOKING FOR 2009 TO 2011 :EXPECTED ORDER BOOKING FOR 2009 TO 2011


Business Potential :Business Potential Project Information…...


EXPECTED ORDERS (JAN-MAR) 2007-08 :EXPECTED ORDERS (JAN-MAR) 2007-08


BUSINESS BEING TARGETTED :BUSINESS BEING TARGETTED


BUSINESS BEING TARGETTED :BUSINESS BEING TARGETTED


BUSINESS BEING TARGETTED :BUSINESS BEING TARGETTED


BUSINESS BEING TARGETTED :BUSINESS BEING TARGETTED


Slide 28:Challenges & initiatives…...


Challenges / Market Requirement :Unequal loading / order book over period Delays in Project Completion affecting Customers’ confidence in BHEL’s capabilities impacting business on negotiated route Demand for Shorter Time Cycles (COD) - 800 MW - 42-48 Months - 660 MW - 36-42 Months - 500 MW - 36-39 Months - 250 / 210 MW - 27-33 Months Stiffer penalties /Evaluation Criteria (Loading on Delivery sch.) Prices (per MW) matching with that of Chinese/ Korean competitors Higher efficiency, in view of high cost of Coal Best internationally available Quality/ Performance Low life cycle cost Effective Project Management by BHEL requiring minimum co-ordination by customer Challenges / Market Requirement


Strategies/Initiatives taken by BHEL :Introduction of 600 MW/ 525 MW/ 300/350 MW and 270 MW sub-critical sets to maintain market share against increasing competition. Utilities are being advised by CEA to qualify BHEL for 600 MW based on their experience of 500 MW. Technology tie-up for Supercritical sets to maintain market share in supercritical range Enhancing manufacturing capacity: Phase I : 6,000 to 10,000 MW (12/07) Phase II : 10,000 to 15,000 MW (12/09) Upgradation / Rebuilding of existing facilities at all Manufacturing Units. Advanced Manufacturing Action (AMA) Vendor base and Erection Agency base Enhancement; Additional T&P procurement, Strengthening of PEM / Piping Centre / Regions. Re-employment of retired specialists. Strategies/Initiatives taken by BHEL


Slide 31:Thank you !