One or more commercially viable entities must have a legal obligation to provide adequate supplies for Small retail power users who prefer to deal with a default supplier rather than shop around in the market for a supplier and face volatile spot market prices. For purposes of this assignment you should use numbers and structure from the data in the HBS Case 1 that is the last page of the case. Between and the regulated price to consumers fell by only 17 percent. Should Capacity Markets be Implemented? Assured energy is a number determined by government planners that reflects expected hydrological conditions. Thus, these natural gas prices probably contributed substantially to the wholesale electricity price increases during the crisis, particularly to the December electricity price spikes. You can download these slides by pressing the buttons below.

The question is how much devaluation be assumed in the scenarios. But most of the forces that lead to the extremely high prices such as high electricity demand, no new capacity and low levels of water in damns could have been predicted. While you may say the comparison with plants around the world is not appropriate; you could also say that comparison with other plants in India is not appropriate because other plants in India were charging high EPC profits and using the political risk premium excuse. The cost and the capacity are at the top of the HBS case as shown in the screenshot below. Subsequently, allegations were made that Enron, through its affiliates, used its market position to distort electric and natural gas markets in the West.

dabhol power project case study ppt

Argentina quickly established a stable institutional design to govern electricity provision, considerably improved the financial and technical performance of the sector, and had one of the most advanced electricity systems in the developing world — with open access to the grid and competitive wholesale markets.

To put a number to it, we only use about roughly 30, megawatts a day at peak of power in California in a winter day. There is not a lot of dabhol given about the entirety of the network, so much of this may not be necessary or already in case Risk Management is the process of identifying, assessing, responding to, monitoring, and reporting risks.


Enron played a much bigger role than previously believed in California’s energy market. Maybe the Dabhol plant problems in India had something to do with the Enron fall. Use the absurd assumption that the plant will run hours per year that is noted in the case maybe the plant will get a sick day — have an outage of 24 hours in leap years. Prices were set through a bidding process along with an administrative uplift that was intended to compensate for capacity that was available but not used.

Dabhol power project case study ppt slide

By the summer ofEnron traders had a portfolio of such tactics, with poweg nicknames such as “Death Star” and “Red Stuudy. But under the new system, he says, generators had incentives not to. At the same time, it isolated the private sector from the market through a combination of regulated pricing and guarantees against commercial risks. The California economy was remaining healthy and population was continuing to grow steadily. Legislation that de-regulated the industry was often passed by unanimous margins and competition was replacing government oversight all over the world.

Next, would be the process to meet to discuss the risks attributed with the management areas. Belden quickly focused on wringing profits from the state’s aging and inadequate transmission network. But please do not assume these comments are very good. The crisis led to fierce debates between people who advocate free markets in electricity and people who argue that market liberalization is bad policy and commentaries on the crisis continue to be influenced by the source of party making the commentary.

dabhol power project case study ppt

OPIC has debt facility to deal with the problem in Brazil. A second bridge and its usefulness, cost, and scheduling will be primary factors of interest.

Rather the price spike resulted directly from the stud demand for natural gas to fuel electric generators during the winter when the demand for natural gas naturally peaks, coupled by limitations in the pipeline capacity to transport natural gas within the State and the absence of natural gas held in storage from previous months.


Very few contracts have only partial government performance undertaking depending on stipulations regarding payments of fees, privatization, dabhop foreign exchange convertibility. The central issue in the case is whether risk analysis and valuation should have involved contract evaluation and insurance on PPA contracts or whether the ultimate affordability of the produced electricity to ultimate consumers should have been the focus of the analysis.

Pronect reached operation between and and had longer PPAs up to 25 years.

Dabhol power project case study ppt

But aside from that it’s free. Dxbhol the country perspective, returns have been mixed. High voltage transmission is done by the National Grid Company.

I have clipped a couple of sources in the screenshots below. Single Price Auction structure breaks down when there is a scarcity of supply Bi-lateral deals and forward contracting for blocks of energy is essential to reduce risks and guarantee adequate energy supplies.

Dabhol power project case study ppt slide

The upside return on underlying loans was a credit and a higher margin when the loans were re-financed. I just want you to get a shudy general idea of what can go into the project IRR calculation and, most importantly, cwse to interpret the calculation. The Dabhol case was a classic case where evaluation of the off-taker was a crucial element of credit analysis.

Download ppt “Case Studies in Electric Power”. These adjustments were not economically or politically realistic. It symbolizes that real change has occurred, that they can get it done. If you would like to review background in these subjects I have included power point slides that provide discussion of project finance and contracts. The government of India was stuey criticized for not honouring contracts.