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Power and Utilities
The electricity industry in India has evolved significantly to provide a wide range of opportunities across the value chain, in both regulated as well as deregulated businesses.
With continued demand growth, technology advances and heightened customer expectations, utilities are transforming.
How PwC can help
We have been active advisors to the electricity industry since 1991 and have been associated with many landmark developments over this time. The power sector advisory team has over 150 specialist staff who bring a rich life-cycle experience to our clients in planning, developing or scaling their electricity business in India.
We offer the following services to support your future strategies and help you deliver more effectively:
- reforms and restructuring
- economic regulation
- power generation
- transmission
- market design
- trading and risk management
- distribution operational strategy.
The power sector has seen a spate of reforms since the early 1990s, with a significant milestone being the enactment of the Electricity Act, 2003. We have been part of the journey and have been involved in several firsts in the industry. The next phase of reforms would be around wires and content segregation, and ushering in retail competition. PwC can help you with:
- developing your unbundling strategy and providing implementation support
- corporatisation and commercialisation strategies
- design and implementation of transfer scheme
- incorporation of subsidiary companies
- organisation of design and structure
- manpower planning
- planning for private sector participation.
Sector regulators need to enhance investment attractiveness, establish and refine regulations to drive efficiency and equity, and strengthen the sector institutions for more effective planning and oversight. The scope for more effective regulation comes from the ongoing evolution of industry structure, entry of private capital and management, leveraging technologies such as smart grids, better definition of resource factors, and better information availability. PwC can help you with:
- developing regulations, codes, and performance standards
- developing multi-year business, investment and tariffs plans
- design of tariffs and subsidy frameworks
- regulatory accounting and analytics
- capacity building of regulatory institutions
- impact assessment studies
- ushering in competition and customer choice.
The business is de-licensed and offers huge opportunities for merchant plants, regulated plants through competitive bids, and captive and group-captive structures. The new procurement regulations reward strategies derived from coal mining and sourcing, equipment procurement, competitive insights, tax planning, tariff design, and financing. PwC can help you with:
- strategies and solutions to optimise the generation portfolio
- meeting financial needs
- providing support during the engineering, procurement, and construction phase
- fuel sourcing and power sale strategies
- asset configuration and support for long-term reliability-centred operations and maintenance
- upgrading power plant operations for the digital era.
With the focus now on operational efficiency improvement and network strengthening through large capital investments and digitisation, the scope for institutional capacity building, enhancement of procurement and project management capabilities, and technology interventions has increased. PwC can help you in:
- developing and implementing strategies for performance improvement and cost reduction
- developing organisational design, structure, policies, and procedures aligned with the strategies
- making investments in smart grid, digital solutions, and emerging technologies
- conceptualising and implementing projects through the public-private partnership (PPP) route
- business planning, investments, tariff setting, and regulatory compliance.
Effective market design is crucial for the efficient operation of power markets and channelling investments. The emergence of new market roles, fast-changing technology, new ways of producing and delivering energy, and changing competitive dynamics present significant challenges for companies and policymakers alike. PwC can help you in:
- thinking through future market designs to stay ahead in a digital world
- anticipating and implementing market changes
- managing competition issues
- evaluating rates of return
- benchmarking system performance
- designing and implementing IT solutions for efficient system and market operations
- regional markets and cross-border trade
- complying with regulatory requirements.
Energy trading is taking on greater significance as energy systems become more fragmented with multiple sources of generation and market participation. Companies are increasingly engaged in trading to improve and add more flexibility to their customer strategies as well as their own asset position. At the same time, developments in digital technology, algorithms, and blockchain have the potential not just to increase trading efficiency but also to disrupt and open up energy markets.
PwC can help you:
- set the right strategy and develop clear policies and strategies to understand and engage with the market environment in ways that are consistent with your commercial imperatives and risk appetite
- align your activities to fit market changes and new developments
- manage risk effectively and advise on the risk frameworks, controls, and systems that need to be in place to manage risks and opportunities effectively
- implement trading processes and systems
- ensure overall good governance, accounting and compliance.
Utilities are dealing with the multiple objectives of transforming operating models, managing customer expectations and embedding technology. They use a mix of strategies, such as capex planning, advanced metering and outsourcing operations, among other services, to enhance revenue potential and shorten turnaround time.
PwC can help you in:
- developing the operating model strategy
- developing the organisational design and structure aligned with the strategy
- developing and implementing operational strategies for power procurement
- strengthening financial and performance management
- reducing technical and commercial losses
- streamlining energy accounting and meter-to-cash processes.
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