GE plans equipment-making unit in India

GE plans equipment-making unit in India

As part of its plans to make India a hub for its coal gasification business, US conglomerate General Electric Co. plans to set up a related equipment manufacturing plant in India and is on the lookout for partners.

Coal gasification involves the conversion of hydrocarbon stock such as coal into gas by applying heat under pressure in the presence of steam. This gas is then used as a fuel for power generation.

GE’s Integrated Gasification Combined Cycle system converts coal into a cleaner burning fuel. This fuel is then burned in a gas turbine combined cycle system to generate electricity.

“Gasification will be the big technology for the future. We are looking for tie-ups and have entered into talks with Indian collaborators. We are talking to around 10 prospective partners. We would like to do more basic manufacturing here. We are looking at a manufacturing capacity here, which will be globally competitive," John Krenicki Jr, president and chief executive officer of the Atlanta, US-based GE Energy, a part of GE, told Mint in October.

GE plans to use its facility in India to service its products and do basic manufacturing in order to feed the global ­market.

Coal gasification technologies are relatively new and un-tested in India although, globally, there are commercially viable projects that have been commissioned. However, companies such as Oil and Natural Gas Corp. Ltd, GAIL (India) Ltd and Reliance Industries Ltd have plans to enter the segment.

“There are two reasons why the coal gasification may seem appropriate in Indian conditions. India’s huge coal resource base makes coal a natural choice to fuel energy. There also is growing awareness of the environmental damage that emissions from burning coal does, particularly so the usage of high-ash Indian coal," said Dipesh Dipu, a manager with accounting firm PricewaterhouseCoopers.

India’s power sector accounts for half of the country’s carbon dioxide emissions. Coal gasification projects could also help address the country’s gas shortage. The demand for gas in the country is currently at 179.17 million standard cubic metres of gas per day (mscmd), while supply lags at 80.54mscmd. This has also affected the power generation capacity addition in the country, which is currently around 135,000MW, not enough to sustain the Indian economy’s high growth trajectory.

India holds a lot of importance in GE’s plans. It already has plans to set up power generation turbine and wind turbine manufacturing in the country.

“Anything we do in India will have to do with partners regarding how we build the plants, sourcing, and materials. Whether it will be a joint venture arrangement still needs to be determined, but there will have multiple beneficiaries as we move forward in that space. It will be a collaborative effort," said Krenicki Jr.

In a related development, GE is also negotiating for a coal gasification project in the country. “We at present do not have a running project here but there are some things under negotiation and development here," said Krenicki Jr, while declining to elaborate.