India’s Bharat Heavy Electricals Ltd (Bhel), Korea’s Doosan Heavy Industry & Construction Co., Japan’s Toshiba Corp. and Hitachi Ltd, and ABB Alstom Power are competing for a slice of a Rs6,600 crore power equipment order from NTPC Ltd, India’s largest power generation company.
The order, among the largest in the power sector so far in 2007-08, is part of NTPC’s planned capital investment of Rs1.6 trillion between 2007 and 2012.
“We will be placing the orders for five units of 660MW each, boilers and turbines (each unit required to generate 660MW of power requires boilers and turbines). While Bhel and Doosan are vying for the orders for boilers, Toshiba, Bhel, Alstom and Hitachi are in the fray for turbines,” said a senior NTPC executive who did not wish to be identified.
The order is for NTPC’s projects at Barh stage-II (generating capacity of 1,320MW) and North Karanpura (1,980MW). The two coal-based power plants are being set up as inter-regional power stations; Barh is in Bihar and Karanpura in Jharkhand. The plants will supply power to states in the eastern, western, and nort-hern regions of the country.
Firms such as Doosan, Toshiba and Hitachi are also looking to use the opportunity to test local conditions ahead of firming up their plans to set up power equipment manufacturing facilities in India. The short supply of power generation equipment in the country has been identified as the primary reason behind the slow growth in power generation capacity. “This order is going to be quite competitive. However, we are hopeful that we will be able to win it,” said Bhel director, power, Ravi Kumar.
A Mumbai-based power sector analyst, who did not wish to be identified, said that the Barh and Karanpura projects have already been delayed by a year and that NTPC’s move to place orders “was a good thing”. “I am surprised that the Chinese and Russians have not shown interest (in supplying to these projects),” he added.
Demand for power generation equipment in India is expected to grow rapidly as the country seeks to add 78,000MW of generating capacity in the next five years. India currently has a generating capacity if 128,000MW, but needs more power to fuel an economy that grew by 9.4% last year and is expected to expand by over 8% this year. NTPC expects to add 22,596MW or a little under a third of the incremental capacity.
NTPC has generating capacity of 27,404MW, which it plans to increase to 50,000MW by 2012. Of the 22,596MW it plans to add, 15,180MW will be through coal-based generation, 4,550MW through gas-based generation and the balance from hydro-power.