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Power transmission, dominated by central utilities, is witnessing a change with state utilities placing larger and more frequent orders.
“We have seen a change in awarding activity for transmission and sub-station projects. Earlier, central utilities dominated the space, now states are placing more orders and of higher value,” said Vimal Kejriwal, managing director and chief executive officer, KEC International.
He added transmission orders from states were earlier in the range of Rs 300-500 crore and these were turning into larger orders worth Rs 700 crore or more.
There has also been an improvement in transmission line additions at the state level.
“The state sector witnessed a decline in transmission line additions in 2016-17 after strong growth in the preceding year and is expected to post healthy growth in 2017-2018 (planned addition of 11,545 circuit km) led by capacity augmentation plans to reduce network congestion and accommodate rising renewable energy,” said Rahul Prithiani, director, CRISIL Research.
Industry executives said Rajasthan, Karnataka, Tamil Nadu, West Bengal and Uttar Pradesh were states where heightened ordering activity had been noticed.
“In recent times, we have seen Tamil Nadu issue a Rs 3,000 crore transmission tender. Our portfolio was earlier 90 per cent Power Grid, now it is 50 per cent and the rest is a mix of states, private orders and exports,” said Sharan Bansal, director of Skipper, which supplies transmission and distribution equipment to the power EPC companies.
Kejriwal attributed the rise in awarding activity by states to growing awareness of power supply to all. “States are required to improve operations, there is public pressure for better and reliable supply,” he said.
Bansal added with the transmission subsidiaries of state electricity boards improving their financial performance, they were better placed to award larger and more frequent orders.
