BHEL power equipment outguns Chinese rivals: Reports

Amid debate over efficiency of power equipment supplied by BHEL and Chinese firms, brokerages have given thumbs up to the Indian PSU, saying its offerings have an "edge" over rivals from China.

State-owned BHEL synchronised 9,442 MW of generating equipment last fiscal. This accounted for about 57% and 89% of total thermal and hydro capacity additions in the country.

However, of late, many private players such as Reliance Power have ordered Chinese equipment for their projects including Ultra Mega Power Projects (UMPPs).

Meanwhile, against the backdrop of comparisons between equipment supplied by BHEL and the Chinese players, a working group has been set up by the Power Ministry to analyse the performance of the sets from the two entities.

The debate over BHEL and Chinese sets comes at a time when the Indian power sector is projected to see an ambitious capacity addition of over 80,000 MW in the 12th five-year plan (2012-17).

Various reports by different entities, however, have supported BHEL, say experts.

"BHEL retains the edge over the Chinese of a five% better heat rate, PLF (Plant Load Factor) and lower auxiliary consumption. This is reflected in the trust that private IPPs (Independent Power Producers) have reposed in BHEL," global group Bank of America Merrill Lynch said in a recent report.

PLF is an indicator of generation efficiency.

Meanwhile, industry sources requesting anonymity said that a major concern with Chinese sets is the lack of asset maintenance by Original Equipment Manufacturers (OEMs), even during the initial years of operation.

Further, they added, that there are also apprehensions about after sales support and related costs as compared to domestic entities like BHEL.

A recent report from JM Financial said that life-cycle cost of BHEL equipment is lower as compared to that of Chinese sets, mainly due to better PLF and lesser operational costs.

In 2007, brokerage firm CLSA had said that BHEL would retain higher share in Indian power equipment market despite stiff competition from Chinese entities.

Industry estimates indicate that BHEL's offerings -- boiler, turbine, and generator -- make up for about 45% of the requirements of a power plant.

Delays in many power projects have been attributed to factors such as non-availability of Balance of Plant (BoP) equipment and shortage of skilled manpower.