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| Power equipment manufacturing capacity to rise four-fold in five yrs |
| Sudheer Pal Singh / New Delhi Mar 09, 2009, 00:53 IST |
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Over Rs 30,000 crore investment to flow in.
India’s capacity of manufacturing power equipment is set to increase four-fold to around 43,000 Mw over the next five years through investments of over Rs 30,000 crore.
Currently, the country’s overall capacity of power equipment manufacturing stands around 10,000 Mw, solely contributed by the government-owned Bharat Heavy Electricals Ltd (BHEL).
The additional 33,000 Mw of equipment manufacturing capacity is expected to be added by the end of 2015, according to the latest data obtained from the Central Electricity Authority (CEA), the country’s apex power sector planning body.
| CAPACITY ADDITION IN PIPELINE |
| Company /JV |
Capacity
(Mw) |
Year of
Completion |
| L&T Mitsubishi |
4,000 |
2010 |
| Toshiba-JSW |
3,000 |
2015 |
| Alstom-Bharat Forge |
5,000 |
2011 |
NTPC-BHEL Power
Projects Private Ltd |
5,000 |
2013 |
Ansaldo Caldie-GB
Engineering Company |
1,500 |
2011 |
Reliance Infrastructure
Shanghai |
10,000 |
NA |
| BHEL |
5,000 |
2009 |
| Source: CEA, industry estimates |
This would help the country meet its target of achieving a power generation capacity addition of over 80,000 Mw in the current Plan period and 100,000 Mw each in the subsequent twelfth and thirteenth five-year plans. It would also bring to an end BHEL’s monopoly in the power equipment market as private sector gains entry into its arena.
Companies like Larsen & Toubro, JSW and Reliance are in the process of setting up equipment manufacturing capacities in the country in partnership with overseas partners.
BHEL is nevertheless confident of maintaining a large chunk of the market. “We are aiming at a 60-65 per cent market share. The private sector competition does not worry us,” said Chairman and Managing Director K Ravi Kumar.
Kumar, however, concedes that he is facing stiff competition from Chinese power equipment manufacturers like Dongfang Electric Company (DEC) and Shanghai Electric Company.
Chinese companies are supplying over 20,000 Mw capacity of power generation equipment for the current Plan period, which ends in 2012. This is about a quarter of the total capacity to be rolled out during the plan.
Experts say that the decreasing monopoly of BHEL in the power equipment segment would help in meeting project schedules.
“It certainly will mean better and timely completion of projects as more supply will come in. Although BHEL too will continue to have a significant share, as it is a cost-effective player,” said Arvind Mahajan, executive director, KPMG Advisory Services.
The power ministry has often blamed BHEL, which is under the Ministry of Heavy Industry, for delays in equipment supplies which led to delays in projects. Delays in tying-up of technology by BHEL has been listed by CEA in the “National Electricity Plan” as one of the “major reasons for slippage” of around 4,000 Mw of super-critical power generation capacity from the last Plan period (2002-2007).
BHEL, however, blames the “bunching” of orders by the state-owned utilities for the delays in equipment supply.
Looking beyond the inter-ministerial bickering, experts believe that the massive addition in equipment manufacturing capacity will help further enhance the installed base of over 143,000 Mw of capacity in India, which will ensure increased availability of power for consumers.
“Apart from the huge addition of indigenous capacity, this will also lead to upgrade of technology in the equipment sector as a lot of private players are building up super-critical plants. This is important in view of the climate change concern,” Mahajan said.
Super-critical plants produce more power per unit of coal and are thus seen as environment-friendly.
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