Wartsila Oyj Abp · OMXHEX:WRT1V
Wartsila Oyj Abp — Wärtsilä — Investor Field Trip to India 2012
66 slides from Wartsila Oyj Abp's conference presentation, Jun 1, 2012
Slide 1: Wärtsilä Operations & Opportunities in India
Wärtsilä Operations & Opportunities in India Rakesh Sarin Managing Director Wärtsilä India 1 June, 2012 1 www.wartsila.com
Slide 2: Contents
Contents 1. India macro economics & linkage to Wärtsilä business 2. Wärtsilä operations in India 3. Wärtsilä opportunities 2 www.wartsila.com
Slide 3: India Macro Economics & Linkage to Wärtsilä Business
India Macro Economics & Linkage to Wärtsilä Business 3 © Wärtsilä www.wartsila.com
Slide 4: 80% of India is yet to be built
80% of India is yet to be built Integration& Execution Technology Rising Political will Sustainability Reforms / UID Growth Deficit Rising Aspirations Globalization Billion+ People With 35% saving rate Urbanization 4 5 June 2012 www.wartsila.com
Slide 5: Strong Growth in the Last Few Years
Strong Growth in the Last Few Years GDP Growth (%) 9.5% 9.7% 9.2% 8.5% 8.0% 7.5% 6.8% 6.9% 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Source: CSO
Slide 6: India: A Large Economy
India: A Large Economy India is the third largest economy in terms of Purchasing Power Parity GDP at purchasing power parity (2011) 15,094 11,300 4,458 4,440 3,099 2,383 US China India Japan Germany Russia Source: CII/ IMF 6 © Wärtsilä www.wartsila.com
Slide 7: India: A Rapidly Growing Economy
India: A Rapidly Growing Economy US$ US$ bn 1,400 2,000 1,800 1,200 1,600 1,000 1,400 800 1,200 1,000 600 800 400 600 400 200 200 0 0 1992-93 1994-95 1996-97 1998-99 2000-01 2002-03 2004-05 2006-07 2008-09 2010-11 Per capita income GDP • India is the second fastest growing economy in the world • Ind
Slide 8: GDP Composition is Undergoing Change
GDP Composition is Undergoing Change GDP Composition: 1990-91 versus 2011-12 1990-91 2011-12 14% 41% 32% 59% 27% 27% Agriculture Industry Services Source: CII/ National Accounts 8 © Wärtsilä www.wartsila.com
Slide 9: Domestic Savings Fuelling Investments
Domestic Savings Fuelling Investments Consumption spending by Households and Savings and Investments Government, Gross Capital Formation (% GDP) 40 Govern- 38 Gross Domestic Savings 36.5 Private ment Gross 36 Consump- Consump- Capital Gross Domestic Investment 34 Year tion tion Formation % of GDP 32
Slide 10: Inflation has been High
Inflation has been High WPI Inflation 12.0% Primary Fuels Manufactured pdts 25.0% 10.0% 20.0% 8.0% 7.2 15.0% 6.0% 10.0% 4.0% 5.0% 0.0% Jun-11 Jun-09 Jun-10 Aug-11 Aug-09 Aug-10 2.0% Oct-11 Dec-11 Feb-12 Apr-12 Oct-09 Dec-09 Feb-10 Apr-10 Oct-10 Dec-10 Feb-11 Apr-11 -5.0% 0.0% -10.0% Nov-09 Nov-10 No
Slide 11: Fiscal Stimulus is being Reversed Gradually
Fiscal Stimulus is being Reversed Gradually • Fiscal Deficit for 2011-12 stood at 5.9%, higher than the Budget 2011 estimate of Fiscal deficit (as % of 4.6%. GDP) 6.0 6.4 5.9 4.9 4.6 5.1 4.5 • Budget 2012 has projected a decline in 4.0 4.1 the deficit to 5.1% of GDP in 2012-13. 3.5 2.7 • Fiscal Defi
Slide 12: Rising Importance in Global Trade
Rising Importance in Global Trade Exports and Imports of Merchandise (US $ Billion) • Both imports and exports contracted in 2009-10 in the aftermath of the global Imports Exports recession. 352.6 • However, India recorded a robust 303.7 288.4 growth of 37.6% in exports in 2010-11. 252.4 251.6 233.5
Slide 13: Capital Inflows Volatile
Capital Inflows Volatile FDI and Portfolio Inflows (US $ Billion) 34.8 37.8 37.8 • Both FDI as well as portfolio 27.2 32.4 30.4 22.8 30.3 25.8 inflows moderated in 2010-11. While FDI has recovered, portfolio 7.0 1.3 inflows remain volatile in the current year. 2006-07 2007-08 2008-09 2009-10 2010-11
Slide 14: Wärtsilä in India
Wärtsilä in India 14 © Wärtsilä www.wartsila.com
Slide 15: This is Wärtsilä
This is Wärtsilä SHIP POWER POWER PLANTS SERVICES 15 © Wärtsilä www.wartsila.com www.wartsila.com
Slide 16: We live by our Mission, Vision, and Values
We live by our Mission, Vision, and Values Mission • We provide lifecycle power solutions to enhance the business of our customers, while creating better technologies that benefit both the customers and the environment. Vision • We will be the most valued business partner of all our customers. Value
Slide 17: Wärtsilä has strong presence in India
Wärtsilä has strong presence in India 1200 People 250 Power Plants 3500 MW Power Plants 1500 MW Ship Power Over 25yrs Active presence
Slide 18: Offices in India
Offices in India 18 © Wärtsilä www.wartsila.com
Slide 19: Power Plants MW in India
Power Plants MW in India Cement Steel & 18% Alloys 7% Textiles 18% IPPs & Utilities 28% Process & Engineering Nuclear Fertiliser & 18% 2% Chemicals 9% 2011: 3470 MW 19 © Wärtsilä www.wartsila.com
Slide 20: MWs under O&M in India
MWs under O&M in India 1573 1040 1016 822 818 764 664 592 484 348 302 222 128 61 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1009 2010 2011 * * Includes 503 MW under mobilisation 20 © Wärtsilä www.wartsila.com
Slide 21: Delivery Centre India - Khopoli
Delivery Centre India - Khopoli Manufacturing: Auxiliary Manufacturing Machine Shop Special projects for Navy Factory Services Workshop Reconditioning Activity Ship Repair Unit (SRU) Wärtsilä Land & Sea Academy Controllable Pitch Propellers 21 © Wärtsilä www.wartsila.com
Slide 22: Wärtsilä Business Opportunities in India
Wärtsilä Business Opportunities in India 22 © Wärtsilä www.wartsila.com
Slide 23: Wärtsilä Ship Power
Wärtsilä Ship Power Wärtsilä enhances the business of its customers by providing integrated systems, solutions, and products that are efficient, economically sound, and environmentally sustainable. Being a truly global organisation with an extensive network, we have the ability to create and supply
Slide 24: Our growth strategy
Our growth strategy Seek further growth through offering lifecycle solutions for ship owners and operators Be the leading system integrator in the ship building industry with further enhancement in our offering and capabilities Complement the system integration success with the best product sales an
Slide 25: Solution provider with an extensive product portfolio
Solution provider with an extensive product portfolio Power Communication Environmental Automation Power drives distribution and control technologies Merchant Lifecycle Total concepts System deliveries services through: through: Offshore • R&D • System Integration • Ship Design Capabilities Cruise &
Slide 26: India: Maritime Sector
India : Maritime Sector 13 major ports, 182 minor / intermediately ports spread over 7212 km coastline 4 large and 28 small and medium sized shipbuilding yards 26 © Wärtsilä www.wartsila.com
Slide 27: Shipyards in India
Yards under Ministry of Defense Shipyards in India Yards under Ministry of Shipping Yards in Private Sector Planned Yards ABG Pipavav Garden Reach ABG Shalimar Alcock Ashdown Hoogly Docks L&T Bharati Bharati Mazagon Hindustan Bharati Bharati Goa Chowgule L&T Bharati Tebma Cochin 27 © Wärtsilä www.wa
Slide 28: Indian Ship Building - Overview
Indian Ship Building - Overview • Indian shipbuilding industry accounts for 1.5% of the global shipbuilding industry • Shipbuilding in India is quite fragmented. Though there are more than 32 shipyards of various sizes, commercial shipbuilding is controlled primarily by 8 shipyards • The Industry is
Slide 29: Indian Government Maritime Agenda: 2010 - 2020
Indian Government Maritime Agenda: 2010 - 2020 Total investment USD 36 billion. Major investment areas include: • Creating port capacity of 3,200 MT to handle traffic of 2,500 MT per year. Improve port performance on par with best in the world. • Increase India’s share in global ship building to 5%
Slide 30: Indian Govt: Support to Shipping industry
Indian Govt: Support to Shipping industry POLICY INITIATIVES INSA (Indian National ship owners Association) has approached government to give Owner’s Interest Subvention Facility to replace aging ships. • Reservation of coastal shipping for Indian flagged ships only • Restoration of the Cargo Suppor
Slide 31: Wärtsilä Power Plants
Wärtsilä Power Plants We provide superior value to our customers with our flexible, efficient and environmentally advanced energy solutions, which enable a transition to a more sustainable and modern energy infrastructure. 31 © Wärtsilä www.wartsila.com
Slide 32: Smart Power Generation
SMART POWER GENERATION Wartsila is ready to play a big role in Power Sector of India
Slide 33: Smart Power Generation
Smart Power Generation Enables transition to Affordable, Reliable and Sustainable energy infrastructure. Energy Efficiency Affordable Smart Smart Enables Power Power System Generation Fuel Operational Reliable Sustainable Flexibility Flexibility 33 © Wärtsilä
Slide 34: Smart Power Generation in Indian Context
Smart Power Generation in Indian Context Provides a solution for major issues confronting the Power Sector: 1. 24x7 reliable power 2. Coal & Natural Gas availability 3. Land acquisition & water crisis 4. Wind & Solar power integration 5. Environment 6. T&D Losses 7. Transmission bottleneck 8. Time f
Slide 35: Demand Varies Time of the Day & Year…
Demand Varies Time of the Day & Year…
Slide 36: The typical daily load curve
The Black-outs! The typical daily load curve Load Peaking Following Load (MW) Intermediate Base Load 0 Time of the 24 Challenge: Day Building adequate generating capacity and the right technology with load following capability to match the demand curve.
Slide 37: Operational flexibility – start up time
Operational flexibility – start up time Load % 5 minutes to full load! Load % 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 0 5 10 15 20 25 30 35 40 45 50 55 mins Coal Fired power plant Aeroderivative GT power plant (GTSC) Combined Cycle power plant (GTCC) Combustion Engine power
Slide 38: Operational flexibility – part load efficiency
Operational flexibility – part load efficiency 5 units 6 units 7 units 8 units 9 units 10 units GT performances by GTPro 15 °C, 10 bar NG
Slide 39: Operational flexibility - energy efficiency
Operational flexibility - energy efficiency 50% Electrical CCGT’s Wärtsilä efficiency CC Wärtsilä SC 40% Coal Aero- GT’s Starting time Ramp rate Industrial Part load oper. Nuclear GT’s Flexibility 30% Low Medium High
Slide 40: Electricity Market Trends…
Electricity Market Trends… Power generation installed capacity of India increased from PLF’s of thermal plants have started to decline 107877 MW in 2003 to 199877 MW Though installed capacity has fallen short of target, but last There is an increase in the short-term power purchase on plan saw a 70%
Slide 41: Early Indicators – advent of cycling of coal plants
Early Indicators – advent of cycling of coal plants NTPC PLF(%) 92,24 91,14 90,81 89,43 90 88,29 87,51 87,52 85,00 85,65 84,4 83,57 80,39 81,1 81,11 80 76,6 70 60 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Average PLF Data Source-
Slide 42: Reasons for low PLF – 2012
Reasons for low PLF – 2012 Coal / Lignite based PP Gas Based based PP 4% 0% 0% 11% 37% 37% 21% 89% Low system demand/schedule from beneficiaries Low system demand/schedule from beneficiaries Forced Outages/ Unscheduled maintenance Forced Outages/ Unscheduled maintenance Fuel Supply shortage/quality
Slide 43: Hybrid Plant – 80% Coal and 20% Gas vs pure coal plants
Scenario –E] A Hybrid Plant – 80% Coal and 20% Gas vis-à-vis pure coal plants (when cycling is the order of the day) 5,50 5,39 Hybrid Plant in Actual Situation: Capacity – 80:20 – Coal : Gas 5,00 Price of Gas – 10-15-20 USD/MMBTU 4,50 Rs/kWh 4,00 Fast Flexible 3,48 Peak Load 3,50 3,15 3,41 (@ 20 $)
Slide 44: Smart Power Generation in Indian Context
Smart Power Generation in Indian Context Provides a solution for major issues confronting the Power Sector: 1. 24x7 reliable power 2. Coal & Natural Gas availability 3. Land acquisition & water crisis 4. Environment 5. Wind & Solar power integration 6. T&D Losses 7. Transmission bottleneck 8. Time f
Slide 45: WHY Smart Power Generation? Load shedding
WHY Smart Power Generation? 1. Load shedding The survey (2009) - How do consumers The “coping” costs for consumers cope & the price? Residential 200 21 cities across India & 1500 respondents 400 600 Commercial 500 1500 VOLL for the country: 289,000cr 1500 4000 or 6% of GDP 0.0 1.0 2.0 3.0 4.0 5.0 6.
Slide 46: WHY Smart Power Generation? Coal & Natural Gas availability
WHY Smart Power Generation? 2. Coal & Natural Gas availability: • Brings 6,9% efficiency in over all fuel mix of the country = reduces coal availability problem • Reduce the expensive gas requirement to one fourth by utilizing the same in Peak Load management plants • Saves Rs 4,500 Cr in primary fu
Slide 47: WHY Smart Power Generation? Land Acquisition & Water Crisis
WHY Smart Power Generation? 3. Land Acquisition & Water Crisis • With smaller foot print, potential to save >24000 acres of land ¾ Valued at > Rs 6000 Cr • Negligible water consumption, saves 410MnCu Mn water (equivalent to the annual need of a city like Mumbai ¾ Valued at > Rs 625Cr
Slide 48: WHY Smart Power Generation? Environment
WHY Smart Power Generation? 4. Environment • Optimization of power generation mix with Base Load & Peak Load generation plants (30GW gas based distributed power plants) • CO2 savings of ~100MnT/yr by end of 12th 5 year plan: Almost 10% reduction, valued at ~ Rs 9,700 Cr • 100MnT CO2 savings/yr = > 8
Slide 49: WHY Smart Power Generation? Wind & Solar integration
WHY Smart Power Generation? 5. Wind & Solar power integration in the Grid • Large mix of wind & solar brings instability in the grid • This needs quick response plants to balance
Slide 50: WHY Smart Power Generation? T&D Losses
WHY Smart Power Generation? 6. T&D Losses • Local generation for the peak demand at load centers & local consumption • ~0,25% savings of total energy consumption • Valued at Rs 675 Cr
Slide 51: WHY Smart Power Generation? Transmission bottleneck
WHY Smart Power Generation? 7. Transmission bottleneck • Local generation for the peak demand at load centers & local consumption • Releases >20% of the transmission capacity • Valued at Rs. 15,900Cr
Slide 52: WHY Smart Power Generation? Time to market for capacity addition
WHY Smart Power Generation? 8. Time to the market for capacity addition • Modular structure • 12 – 15mths power out from financial close • Quicker financial close
Slide 53: Economic Value Add: Smart Power Generation
Economic Value Add: Smart Power Generation 242,297 Bn Equivalent to Rs. 4,551 Cr of Primary Energy Savings Unrestricted demand Kcal Fuel (MW) of India - 2016- 17 (17th EPS, CEA) Equivalent to :Rs. 9,682 Cr of Certified (218,209 MW) CO2 Emission 101 Mn Tonnes Emission Reduction (CER) or Savings ~ 18%
Slide 54: Indian generation mix - future scenario…
Indian generation mix - future scenario… Assumptions Demand vs. available supply* • Generation plan GW achievement – 60 GW in XI plan 315 – 120 GW in XII plan • Load profile of demand 255 remains unchanged 142 • Gas plants and hydro- 58 reservoir plants taken as peaking capacity** • Availability 132
Slide 55: Need for Smart Power Generation to meet Peak Shortages
Need for Smart Power Generation to meet Peak Shortages - 27594 Source : CEA (in CAC meeting by POSOCO)
Slide 56: Demand Projection - 18th EPS
Demand Projection - 18th EPS After taking into account Demand Side Management and energy conservation measures as proposed by BEE
Slide 57: Emission Data for Plants
Emission Data for Plants 57 © Wärtsilä
Slide 58: Generation Planning – recognition to peaking in Planning
Generation Planning – recognition to peaking in Planning 58 © Wärtsilä
Slide 59: Generation Planning - some highlights
Generation Planning - some highlights 59 © Wärtsilä
Slide 60: Parameters for Peaking Power
Parameters for Peaking Power 60 © Wärtsilä
Slide 61: Support for peaking
Support for peaking 61 © Wärtsilä
Slide 62: Wärtsilä Services
Wärtsilä Services Preventing the unexpected and optimising our customers operations is our shared passion. We serve you whenever, wherever. We provide the broadest portfolio and best services in the industry for both ship power and power plants. We offer expertise, proximity and responsiveness for a
Slide 63: BTG Plant at HZL Dariba
160 MW BTG PLANT AT HZL DHARIBA Boiler Turbine Generator 63 © Wärtsilä www.wartsila.com
Slide 64: Gas based power plant in India under CM
Gas based power plant in India under CM Largest Wärtsilä Gas Power Plant in India:104.76 MW MW gas based power plant in Tamil Nadu 64 © Wärtsilä www.wartsila.com
Slide 65: Wärtsilä Dry Dock facility at Paradip (Orissa)
Wärtsilä Dry Dock facility at Paradip (Orissa) ¾The dock of size 75M X15M X 6M can caters to – Tugs AHTS FPV/IPV’s of CG/NAVY Coastal cargos 65 © Wärtsilä www.wartsila.com
Slide 66: Power Plants 500+ MW
POWER PLANTS 500 + MW 66 © Wärtsilä www.wartsila.com