Coal & Gas Based Power in India
The Indian energy and power sector is in ferment: a rolling blackout that left over half the country’s population without power; a coal mining rights allocation scandal that the CAG estimates to have cost the country 1.85 lakh crores; a long running family dispute which is to decide the price of natural gas in the country, and a country’s future held to ransom.
There isn't a day when some or the other news about coal or gas or power isn't making waves. The industry is so politicized that partisan views are rife. In this bewildering environment, one needs a solid foundation of facts and structural understanding about this sector and its economics. Having the ability to judge the merits of an argument is vital to the investor. This ability is what this report attempts to augment.
The report delves into the nitty-gritty of the sector - what is the true comparative price of domestic coal vs. imported coal? What is the price of producing thermal power in India? What is the big deal about gas and how much do we really have? Could gas become the dominant energy source in the coming years? And other such questions.
We work with the assumption that the investor is savvy. We, therefore, do not shy away from presenting technical details and calculations, where merited, in the report. The reader may work through our calculations and convince himself of their correctness - and even understand how different assumptions might affect the calculated numbers. Additionally, you will also find in the appendix, a list of rules-of-thumb that can help you quickly assess the correctness of many claims you read elsewhere.
All these put together, we hope, would enable our reader to take an informed and independent judgement about events and investment opportunities as they arise in the industry.