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Shanghai Electric sets up India office

EM NEWS BUREAU ,  Friday, April 20, 2012, 15:40 Hrs  [IST]

After spending two years in getting clearances, Shanghai Electric Power Generation Group, popularly known as Shanghai Electric Company (SEC), has set up its office in India. This makes SEC a step closer to setting up manufacturing operations in India. Shanghai Electric India Ltd, the official name of the SEC's Indian outfit, was formally launched on March 7.

SEC has been a leading supplier of main plant power equipment (boilers and turbine-generators) to India. It is estimated that SEC is involved in supplying to 12 power plants with an aggregate capacity of 20,000 mw—a business volume of around Rs.1 trillion.

Shanghai Electric received a major boost in India when it concluded an agreement with Reliance (ADAG) Group for the supply of 36 supercritical power generation sets of 660-mw, worth a staggering $8.3 billion. Signed in October 2010, the deal is amongst the highest-valued in the power sector globally.

While Reliance (ADAG) has been a big patron of SEC equipment, other private utilities like JSW Energy and CESC have also placed orders on the Chinese equipment manufacturer. SEC equipment is being deployed at JSW Energy's 4x300-mw Jaigad power project in Ratnagiri district, Maharashtra. CESC, part of the RPSanjiv Goenka Group, also signed a cooperation agreement with SEC in September last year. The agreement envisages CESC bidding for ultra mega power projects along with its Chinese partner. Earlier that year, CESC placed orders for power equipment worth 1,200 mw for its upcoming projects in Maharashtra and West Bengal.

While SEC is now learnt to be preparing ground for setting up a manufacturing facility, there is also a tie-up with Alstom that would come into play. In April 2011, Alstom and SEC joined forces globally to form a 50:50 joint venture for the production of thermal power plant boilers. The collaboration will also extend to India and the proposed manufacturing facility of SEC might have Alstom's equity involvement, it is learnt.

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Big supplier

SEC has been a supplier of choice to Reliance Power. According to information available, SEC is supplying equipment aggregating 13,080 mw to the Anil Ambani Group company. This largely includes supercritical equipment. The projects that would see the deployment of SEC equipment include Rosa-II (600 mw), Butibori (600 mw), Sasan and Krishnapatnam UMPP (each of 3,960 mw) and Chitrangi (3,960 mw). Besides, SEC has already supplied equipment for the operational 600-mw Rosa-I project in Uttar Pradesh. Reliance Power intends to source equipment for the 3,960-mw Tilaiya UMPP as well from SEC.


Going by its current plans, Shanghai Electric would become the first Chinese equipment manufacturer of power plant equipment to set up shop in India. It will now compete with traditional supplier BHEL and the several other domestic suppliers, in the capacity of a local company. Indian suppliers of power equipment have had a longstanding grouse against imported Chinese equipment that worked out at least 20 per cent cheaper that domestic equipment. Industry associations had demanded an import duty on Chinese equipment—a proposal that did not find favour with power producers that had placed orders on Chinese suppliers. The Indian government at that stage did not want to impose duties as much of India's power generation capacity addition for the XI Plan (2007-12) was dependent on Chinese equipment.
 
                 
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