The government has asked power companies to order equipment worth $33 billion this year in order to boost coal power output in the years ahead, as India struggles to meet the increasing demand for electricity, two government officials told Reuters.
This move will lead to a record tendering in a year for the equipment by power firms including state-run NTPC and SJVN as well as private companies like Adani Power and Essar Power, and will help in adding 31 gigawatts (GW) in the next 5-6 years, the report by Reuters stated.
While the government normally leaves the tendering time to the companies themselves, this time, the expedition for the equipment orders for new coal-fired plants was discussed at a meeting held by Power Minister Manohar Lal, sources said.
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Given that India has ordered equipment for about 2-3 GW capacity annually in prior years, barring last year’s orders for 10 GW, the targets are ambitious. This is in order to be able to meet high power demand.
The country’s power demand scaled new records post pandemic, on the back of the fastest rate of economic growth among major economies and increased instances of heatwaves. India saw its biggest power shortfall in 14 years in June. It had to race to avoid night time outages by deferring planned plant maintenance, and invoking an emergency clause to mandate companies to run plants based on imported coal and power.
Per Reuters, BHEL is likely to get most of the contracts for the new equipment. Larsen & Toubro, the only other power equipment producer in the market, had not participated in most of last year’s bids, sources said.
The Power Ministry, BHEL, Adani, NTPC, SJVN and L&T did not immediately respond to emails sent by Reuters.
“The last large orders for power equipment were placed for about 20 GW around 2009-10 when Chinese companies bagged a major pie,” one of the sources told Reuters.
Since 2020, India discourages contracts with companies in countries sharing a land border such as China by mandating regulatory approvals. Since late last year, India has fast tracked coal-fired power plants to meet its power needs, threatening to undermine progress made by the world’s No.3 greenhouse gas emitter in weaning its economy off carbon.
In March, Reuters had reported that private Indian firms have expressed interest in building at least 10 GW of coal-fired power capacity over a decade, ending a six-year drought in significant private involvement in the sector.
From: financialexpress
Financial News
