Project Welfare Measures Essay Example
Project Welfare Measures Essay Example

Project Welfare Measures Essay Example

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  • Pages: 13 (3533 words)
  • Published: April 16, 2017
  • Type: Case Study
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India, a developing country, has a majority of its population consisting of the working class.

Indian laborers often prioritize survival over personal growth and self-fulfillment due to the struggle to survive. They face unique challenges such as migrating from villages to cities in search of employment, being separated from loved ones, and enduring unfavorable working conditions for meager pay. However, there is a positive shift in India's current situation as employers are recognizing their workers' needs and implementing measures to boost their morale and self-worth through mandatory and voluntary labor welfare initiatives. This transformation has been influenced by global efforts from organizations like the International Labour Organization (ILO) and influential leaders of Indian and international labor unions like Shri N.

The project centers around the employee welfare facilities offered by AREVA T&D, considering both M. Lokhande's research and the Indian Gover


nment's initiatives to establish worker protection and progress laws. Employee welfare consists of various services, amenities, and facilities aimed at enhancing employees' well-being.

The project "A study on the level of satisfaction among employees on welfare facilities at AREVA T&D" aims to enhance worker's quality of life beyond their wages. The objective is to understand employee perceptions of the company's welfare measures and desired improvements, in order to increase productivity and satisfaction. Additionally, the study aims to develop a method for evaluating the effectiveness of the organization's welfare initiatives. This involves assessing employee satisfaction with welfare measures provided by AREVA T&D, as well as intramural facilities such as safety, cleanliness, housekeeping, compound walls, lawns, seating arrangements, illumination, posters, warnings, canteen services and restrooms. A literature review is crucial in formulating a methodology for assessing the effectiveness of these

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facilities and improving theoretical and methodological aspects. The existing system known as "Employee Opinion Survey" evaluates effectiveness from a global standpoint at a macro-level.

Its main objective is to update readers with the current literature on a subject, serving as a foundation for other purposes such as future research. A well-structured literature review displays a logical progression of ideas, includes current and relevant references with consistent and appropriate referencing style, utilizes proper terminology, and presents an unbiased and comprehensive overview of past research related to the topic.

Industry Profile

The electric power industry's role is to produce and deliver electricity, also known as power, in sufficient quantities to areas in need via a grid connection. The grid then distributes this electrical energy to customers. Electric power is generated either by central power stations or through distributed generation.

The necessity for electricity is crucial for many households and businesses, particularly in developed nations, while its demand is limited in developing nations. The demand for electricity is driven by the need to power domestic appliances, office equipment, industrial machinery, and provide sufficient energy for both domestic and commercial lighting, heating, cooking, and industrial processes. Given this role in various sectors, electricity is considered a public utility and part of infrastructure. Despite the knowledge of electricity production through chemical reactions in an electrolytic cell since Alessandro Volta's development of the voltaic pile in 1800, this method remains costly up to this day.

Michael Faraday invented a machine in 1831 that generated electricity through rotary motion. However, it took nearly five decades for this technology to become commercially viable. In 1878, Thomas Edison introduced a practical alternative to gas lighting and heating

by utilizing direct current electricity. This electricity was produced and distributed locally within the United States. The initial public supply of electricity was established in late 1881 in Godalming, a town located in Surrey, UK. Electric light powered by a water wheel on the River Wey, which drove a Siemens alternator supplying multiple arc lamps throughout the town as well as various businesses and establishments, illuminated the streets of Godalming. Simultaneously, Edison inaugurated the world's first steam-powered electricity generating station at Holborn Viaduct in London. Through an agreement with the City Corporation, he provided street lighting for three months.

In due course, he had provided electric light to several local customers. The supplying process involved using direct current (DC). In September 1882, Edison established the Pearl Street Power Station in New York City, which also utilized DC. The reason behind this choice was that Edison lacked the capability to convert voltage. Selecting the voltage for an electrical system requires finding a middle ground. Raising the voltage lessens the current and consequently decreases resistance-related losses in the cable.

Unfortunately, the increased voltage increases the risk of direct contact and requires thicker insulation. In addition, higher voltages posed challenges in creating certain types of loads.

Furthermore, in December 1881, Robert Hammond conducted a trial of the new electric light in Brighton, UK. The successful installation prompted Hammond to establish the Hammond Electricity Supply Co., as several shop owners expressed interest in using the new electric light.

The Godalming and Holborn Viaduct Schemes closed shortly after opening. However, the Brighton Scheme continued and began providing 24-hour electricity in 1887. A former employee of Edison, Nikola Tesla, understood electrical theory in a

different way than Edison and developed an alternative system using alternating current. Tesla recognized that doubling the voltage would half the current and decrease losses by three-quarters. Only an alternating current system could facilitate the transformation between different voltage levels within the system. This allowed for efficient distribution of high voltages, which could be managed through careful design, while still providing relatively safe voltages to the loads. Tesla further developed his system's theory and created practical alternatives for all appliances using direct current at that time. He obtained thirty separate patents for his innovative ideas in 1887. In 1888, George Westinghouse became aware of Tesla's work, particularly his transformative technology that could handle high power and was easy to produce.

Westinghouse had been running an AC lighting plant in Great Barrington, Massachusetts since 1886. Despite having heaters, it did not possess a motor initially. However, in collaboration with Tesla, Westinghouse successfully developed a power system for a gold mine located in Telluride, Colorado in 1891. This particular system consisted of a water-driven generator with 100 horsepower (75 kW) capacity that powered a motor of the same capacity through a power line spanning 2.5 miles (4 km). In 1893, Almarian Decker invented the three-phase power generating system in Redlands, California. Following this breakthrough invention, Westinghouse's company partnered with General Electric (which Edison was compelled to sell) and together they constructed the Adams Power Plant at Niagara Falls. The power plant boasted three generators each capable of producing 5,000 horsepower (3

7 MW Tesla generators provide electricity to an aluminum smelter in Niagara and the town of Buffalo, which is 22 miles (35 km) away. The Niagara power station

began operations on April 20, 1895. Tesla's alternating current system remains the primary method for delivering electrical energy to consumers globally. Although high-voltage direct current (HVDC) is increasingly used for transmitting large amounts of electricity over long distances or connecting neighboring asynchronous power systems, most electricity generation, transmission, distribution, and retailing still depend on alternating current.

The Indian Power Industry is vital in meeting the energy requirements of different sectors and has a substantial impact on India's infrastructure and economic development. With the 5th largest electricity generation capacity globally and ranking as the 6th largest energy consumer, it plays a crucial role in our nation's prosperity.

India's economy has seen significant growth in the last 30 years, resulting in an average annual rise of 3.6% in energy demand.

The distribution of installed power capacity in India among State utilities, Central utilities, and Private players is shown in the following pie chart. According to the latest Report of CEA (Central Electricity Authority) as of 31-03-2011, India's Total Installed Power Capacity is 173626.40 MW. The public sector (state and central) holds over 75% majority stake in the installed capacity, with the state sector alone having the largest portion at 48%.

India primarily relies on thermal power generation using coal as its main raw material, accounting for around 83% of total thermal power generated. Gas and oil contribute approximately 16% and 1%, respectively. Additionally, hydroelectric power from falling water energy is also significant. Despite having a potential hydro power generation capacity of 150,000 MW, only 25% of this capacity has been utilized in India so far.

Nuclear Power: A nuclear power plant is a thermal power station that utilizes one or more

nuclear reactors as the heat source, employing devices designed to regulate and initiate an uninterrupted nuclear chain reaction resulting in heat production. This heat is subsequently harnessed for electricity generation.

Renewable Energy Sources: Renewable energy sources, encompassing the sun, wind, and biomass, possess the ability to be transformed into power. These enduring energy sources exhibit tremendous potential in enhancing India's energy security while mitigating greenhouse gas emissions. India stands among the leading five worldwide wind power producers.

The graph illustrates the positive correlation between India's economic growth and growth in power generation. This analysis will explore the current power shortage in India and argue that as the country continues to develop optimistically, there will be an increased demand for electricity. It is vital for India to enhance its power generation capacity at a similar rate in order to sustain GDP growth. The power industry utilizes Plant Load Factor as a measure of efficiency, which compares a plant's actual output to its maximum output. Despite having the highest installed capacity, the State sector demonstrates lower efficiency.

The private sector utilities have achieved good efficiency rates, while the Central utilities have also managed to achieve competent efficiency rates. With the encouragement of private players entering the Power Sector, the state utilities will need to focus on improving their efficiency going forward. Looking at the performance of the top sector players in the past, it is evident from the table below that hydro-power producers like NHPC and SJVN have significantly higher profit margins compared to thermal power producers. This is due to the large expenditures on Fuel (Coal, Gas, Oil) that thermal power producers are required to make. In terms of

companies with a diversified power portfolio, NTPC is the largest company based on Net Sales, but Tata Power has achieved the highest growth rates in Sales and Net Profit.

NHPC, a hydro power producer, has shown remarkable performance in terms of its Net Profit with a CAGR of 28%. The growth of the industry is influenced by multiple factors, including the demand-supply gap. India has been grappling with a power shortage for a long time due to its high electricity demand. As illustrated in the graph above, India's power supply consistently falls below meeting this demand.

Under the Government’s plan "Power for all by 2012", the aim is to achieve a per capita consumption of 1000 kWh by the end of the 11th Five Year Plan (2007-2012). This would be an increase from the levels of 734 kWh in 2008-09. To reach this goal, it is estimated that adding over 1,00,000 MW of capacity would be necessary. This indicates significant opportunities in the sector. The Government plays a crucial role in developing the Indian power industry and has policies focused on protecting consumer interests and ensuring commercial viability.

The government exercises its authority over the industry through the implementation of tariff control, subsidies, and environmental regulations. These measures are essential due to the industry's influence on multiple sectors and its overall impact on the economy. The Electricity Act of 2003 is a significant legislation that addresses these concerns by facilitating private sector participation in power generation and fostering competition. It also permits full foreign direct investment in power generation, transmission, and distribution to attract investments in this sector.

The Rural Electrification Program seeks to provide electricity to villages facing

a severe power shortage. The "Power for All by 2012" plan aims for a per capita consumption level of 1000kWh by the end of the 11th Five Year Plan (2007-12). Currently, the Accelerated Power Development and Reform Programme (APDRP) aims to reduce Aggregate Technical and Commercial (AT) loss from 30% to 15% within this plan period. In order to address India's power deficit, the Government plans to invest US$4 billion (Rs.192 billion) in nine Ultra Mega Power Projects (UMPP), each with a capacity of 4 GW. This initiative anticipates completion of four projects between 2011 and 2017.

The thermal power segment of the Indian power industry relies on coal, oil, and gas to generate electricity. Despite having the largest capacity for electricity generation, this segment is frequently impacted by coal supply shortages and low quality coal. These challenges often result in disruptions in power generation and decreased plant load factors. When domestic coal supply falls short, power companies opt to import coal, leading to increased costs. To address these issues, power companies either establish long-term agreements (LTA) with coal suppliers or acquire their own coal mines to secure a consistent supply of this essential input.

Furthermore, the coal industry in India is currently employing aggressive tactics by acquiring coal mines overseas. Within the country, a considerable number of coal mines have obtained environmental clearances. These initiatives will prove advantageous for companies involved in thermal power generation. Conversely, gas-based power plants are confronted with challenges due to gas supply shortages. However, the discoveries made in the Krishna-Godavari Basin are anticipated to enhance the availability of gas in India, which will greatly benefit the country's gas-powered facilities. Lastly,

the transmission and distribution of electricity refer to the large-scale transfer of power over long distances at high voltages.

Transmission and Distribution plays a crucial role in the power sector, just like generation. To meet India's increasing power demand, it is essential to invest in sufficient transmission infrastructure along with capacity additions. Unlike the global trend where equal investments are made in generation and transmission, India has historically allocated only half the amount invested in transmission and distribution compared to generation. Consequently, the transmission capacity in India falls behind the generation capacity. To adequately address the growing power demand, significant investments are necessary in Transmission and Distribution within India's power sector.

[pic] 5) FDI Equity Flows in Power Sector: - In India, 100% FDI is permitted in the Generation, Transmission, and Distribution segments of the Power Sector. Over the past 5 years, FDI inflow in the Power Sector has increased and this upward trend is projected to continue due to the ample opportunities available in the sector. FDI inflow plays a crucial role in the power sector as it not only brings in financial resources but also introduces advanced technology, resulting in increased efficiency. Therefore, it serves as a significant catalyst for growth in the power sector.

The future growth of power generation in India will rely on nuclear, hydro, and renewable energy sources, as the thermal power generation sector is experiencing shortages of coal. Nuclear power projects currently make up 2.75% of India's total installed capacity, which amounts to approximately 4.77 GW.

The Planning Commission's expert committee on an Integrated Energy Policy has proposed in its report that there is a possibility of achieving a nuclear power

capacity of 21-29 GW by 2020 and 48-63 GW by 2030. In terms of hydro power, India has a potential worth of 1,50,000 MW for power generation, with only 25% currently being utilized. The use of renewable sources for electricity generation presents several advantages including a consistent energy source, potential reduction in reliance on imported fossil fuels, and lower CO2 emissions. However, the main obstacle to the rapid expansion of renewable power is the high initial cost compared to other fuel alternatives. Nonetheless, the government supports this segment due to environmental concerns, resulting in an increased share of the country's total generation capacity from renewable sources.

From 2001-02 to 31st March, 2011, the percentage of non-thermal power sources increased from 1% to 10.63% and is expected to continue increasing. Additionally, hydro power and renewable energy sources present promising investment opportunities as companies expand their power portfolios. However, the power sector faces challenges due to its high capital requirements and lengthy periods without revenue generation.

The power production sector in India experiences inherent risks due to the long time frame of projects (4-5 years for construction and over 25 years for operation). One major challenge is the limited availability of coal, which is the main source for power generation. Various obstacles like capacity expansion of Coal India Limited, coal block allocation, tribal land acquisition, environmental and forest clearances pose challenges in accessing domestic coal reserves. Transportation of coal also presents a significant concern, as it relies on Indian Railways for domestic transportation and ports for imports, both of which face capacity shortages in India.

Therefore, a significant challenge for a project developer is to effectively manage the logistics chain

to ensure a consistent supply of fuel. Additionally, the power sector heavily relies on equipment suppliers, and this dependence has resulted in equipment shortages. In fact, these shortages have prevented India from meeting its capacity addition targets for the 10th five-year plan. While the main shortage is in components such as boilers, turbines, and generators, there is also a lack of adequate supply for Balance of Plant (BOP) equipment, including coal handling and ash-handling plants. Furthermore, there is a shortage of construction equipment as well.

Inadequate supply of equipment is a major concern for power companies because it leads to aggregate technical and commercial losses. The Aggregate Technical and Commercial Loss (AT) refers to the power that is lost due to inefficient transmission and distribution infrastructure. In India, the AT losses are significantly high at 30%, compared to just 5-10% in developed markets. This means that out of every 100 units of power produced, 30 units are lost during the transmission and distribution process. These losses can be attributed to inadequate investments in system improvement works over the years, resulting in technical inefficiencies.

Commercial losses in the power sector are primarily caused by low metering efficiency, power pilferage, and theft. This poses a significant challenge for the industry. Additionally, the power sector faces other obstacles that contribute to the demand-supply gap. These include a shortage of skilled manpower for construction and commissioning of projects, contractual disputes among project authorities, contractors, and sub-vendors, delays in the readiness of balance of plants by executing agencies, difficulties in land acquisition and rehabilitation, environmental and forest-related issues, inter-state conflicts, geological surprises (especially for hydro projects), and contractual problems.

These challenges continue to

hinder the progress of power projects, posing difficulties in maintaining their development.

Future Prospects And Conclusion

India has prioritized its development agenda, recognizing that power plays a crucial role in economic growth and development. The growth of the power sector is directly linked to India's GDP growth rate. To sustain a GDP growth rate of 8-9%, India must continuously increase its power generation capacity to match this pace. Although the Indian power sector is one of the world's fastest-growing sectors and energy availability has increased by approximately 36% in the past 5 years, the demand for power surpasses its supply.

The lack of electricity access affects nearly 600 million Indians, with energy and peaking deficits remaining in the double digits for the past two years. This situation is expected to worsen due to the increasing demand for power caused by India's growing population, rapid industrialization, and urbanization. Therefore, there is a continuous demand for expansion in the Power Sector. The Government is investing in this industry through various development schemes such as the Rajeev Gandhi Rural Electrification Program, 'Power for all by 2012,' Accelerated Power Development and Reform Programme (ARDRP), and Ultra Mega Power Projects. The government is also encouraging participation from private players in this sector. Additionally, there is a push towards promoting renewable energy sources due to escalating environmental concerns.

Therefore, the future outlook for nuclear power, hydro power, and renewable energy sources in the Indian Power Sector appears to be very promising. It is crucial for investors to choose industries with bright long-term prospects when making investment decisions. The Indian Power sector is projected to have substantial growth in the foreseeable future. Additionally, it

is equally important for companies to have a strong financial track record.

The Green (Very Good) rating of e. Green 10 Year X-Ray indicates positive long-term prospects for the company. The 10 YEAR X-RAY allows for analysis of the company's financial performance based on five key parameters. This analysis covers a 10-year period, which is valuable for understanding the company's performance during both favorable and unfavorable economic conditions. The five parameters to consider are Net Sales Growth Rate, EPS Growth Rate, Book Value Per Share (BVPS) Growth Rate, Return on Invested Capital (ROIC), and Debt to Net Profit Ratio.

The MoneyWorks4me assessment categorizes a few Power companies based on their 10 YEAR X-RAY and Future Prospects. The assigned colour codes are Green (Very Good), Orange (‘Somewhat Good’), and Red (Not Good). It is advised to invest in stocks of companies with bright long-term prospects and Green ratings in both the 10 YEAR X-RAY and future prospects. However, the power sector, though showing potential growth, raises doubts about whether these companies can fully capitalize on it and reflect it in their performance. Due to the nature of the power sector (capital intensive + high debt), these companies have experienced limited growth in one or more parameters. Investors with a risk appetite can consider investing in these companies, but at the right price.

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