Manufacturing plan for power and renewable energy equipment in works

The Ministry of Power will launch a domestic manufacturing programme for critical power and renewable energy equipment with an outlay of Rs 1,500 crore in FY22.

The scheme titled ‘Manuf­acturing Zones under Atmani­rbhar Bharat Package’ in the Budget would entail setting up three manufacturing zones in a year. These zones are divided into three categories — coastal, land-locked and hilly states. The scheme would call for off­ers from states to submit applications to set up these zones. The three selected zones would get Rs 500 crore each for development of manufacturing hubs.

Senior officials said a committee would select which state offers the best facilities for these zones. “The selection criteria would be based on land and cheap infrastructure facilities such as electricity, water and sewage treatment, among others. The Centre would provide common infrastructure and testing facilities at these zones,” said an official.

A testing facility would be set up by Central Power Research Institute for power equipment. For equipment under renewable energy, National Institute of Solar Energy and National Institute of Wind Energy would set up testing facilities. 

The Centre is also planning to give open access power to these zones in case the selected states are unable to supply cheap electricity. 

“The states will form a special purpose vehicle (SPV), which would be transferred to the private companies when they set up manufacturing facilities. The focus would remain on equipment manufactured in India but are still imported,” said the official. 

The Union power ministry, in September 2020, had released a list of around 80 items, which are imported despite sufficient domestic capacity. “We would also aim to set up manufacturing of new-age equipment which are not yet available in the Indian market,” said another official.

Indian Electrical and Electronics Manufacturers’ Association (IEEMA) said the scheme comes at the right time as imports are restricted now. 

Following the border clas­hes with China in Galwan valley, Ladakh, the ministry of power, through a public order in July 2020, announced im­port restrictions on equipment used for ‘power supply systems and network’ citing security threat and cyber-attacks. 

While banning imports from China, the ministry said prior permission would be needed to import from countries in the ‘prior reference’ list, which now includes China and Pakistan.

“It is essential in the long run that we manufacture most of such power equipment and components. So, this scheme is welcome,” said Sunil Misra, director-general, IEEMA. The association was part of the consultative process for the scheme.

He, however, added that there should be a joint task force of the industry and government to identify such large manufacturers, including global players. “There should be high-level government representatives or envoys to approach global and domestic majors to invest in India for manufacturing power equipment,” said Misra.

According to data collected by IEEMA, of the 58 identified equipment used in power supply infrastructure, there are only four products for which there is no domestic capacity. For two products, there is alternative technology available in India.