China power firm seeks to enter power transmission sector

Chinese powers companies have been active in the India power sector space at the EPC level

China Southern Power Grid International (HK Company Limited), in a consortium with CLP India Private Limited, is set to enter the power transmission sector in India. 

In bids called for projects totalling Rs 3,000 crore, state-owned China Southern Power has submitted a proposal of interest to build, own and operate power transmission networks.

Three projects for which the bids were called are transmission system for an ultra-mega solar park in Jaisalmer, Rajasthan (Rs 536 crore), ERSS-XXI (Rs 1,321 crore) and the New WR-NR Inter-Regional Corridor (Rs 916 crore).

Among the other bidders were Power Grid Corporation of India Limited (PGCIL), Sterlite Power, Adani Transmission Limited, Tata Power, GMR Limited and L&T. Chinese powers companies have been active in the India power sector space at the engineering, procurement, construction (EPC) level. Chinese power equipment form a major chunk in the Indian market. Imports from China have been growing at a compound annual growth rate of 34.57 per cent for eight years, according to industry data. 

In the past, Chinese players have participated widely in projects to install information technology (IT) systems on the power grid of the states. Two years ago, 18 cities awarded the contract of SCADA systems to Chinese firms. SCADA is an industrial control system that monitors and controls industrial processes, mostly through remote technology.  

This had met with a lot of resistance from indigenous companies, which cited concerns of national security to stop the Chinese firms. Indian Electronics & Electricals Manufacturers' Association (IEEMA), the representative body of power equipment makers, even wrote to National Security Advisor Ajit Doval asking for a complete ban on Chinese equipment in the power sector. IEEMA said China has reportedly mounted repeated attacks on Indian computer networks and the information flowing in the Indian grid was more vulnerable than ever to hacking.

This time around as well, domestic investors and developers have raised apprehension over the same issue. “Electric equipment makers have already expressed concerns time and again against the presence of Chinese firms in view of sensitivity in the power infrastructure sector,” said a sector executive.

Apart from these three projects, Rs 4,000 crore worth of projects are also in the pipeline.