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China corners 40 per cent share of Indian power equipment market

Em News Bureau ,  Friday, May 25, 2012, 15:37 Hrs  [IST]

The role of Chinese main plant equipment in Indian power generation plants has been a subject of great debate. Now, recently-released statistics by the government have helped quantify the phenomenon. In the XI Plan period that ended on March 31, 2012, China had a 40 per cent share in the thermal power capacity commissioned in the country. Further, China has the comparable share in terms of thermal power plants currently under construction. China's share in other type of power plants—hydropower, nuclear or renewable—is currently minimal. The biggest market for China today is coal-fired power plants, which is incidentally the main source for electricity generated in the country. Some Chinese companies currently supplying to India include Shanghai Electric, Harbin, Dong Fang, SEPCO III, etc.

In terms of actual number, China accounted for 17,772 mw of new thermal power generation capacity added during the XI Plan period, out of the total of 45,064 mw. It is interesting to note that apart from private sector projects that of course formed the bulk, China also contributed to public sector projects. State government-owned power utilities of West Bengal and Chhattisgarh placed orders on Chinese equipment. China also made a backdoor entry in supplying power equipment to Central government projects, via private EPC contractors. At least one case known to Electrical Monitor is that of Damodar Valley Corporation that received Chinese equipment for its Raghunathpur power project via private EPC contractor Reliance Infrastructure.

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SUPPLIERS TO THERMAL POWER PROJECTS

Chinese Suppliers
Others
Total
Pvt Projects
Others
Total
Commissioned in XI Plan MW 15,072 2,700 17,772 27,292 45,064
  % share 33.4 6.0 39.4 60.6 100.0
Under Construction MW 36,250 2,650 38,900 57,750 96,650
  % share 37.5 2.7 40.2 59.8 100.0
Source: PIB

Currently, 96,650 mw worth of thermal projects are under construction, government statistics estimate. Out of these Chinese equipment are seen playing a role in 38,900 mw, representing a share of 40.2 per cent.

As per mega power policy, all mega power projects are eligible to import equipment from any country, including China, at zero custom duty. All other projects are required to pay import duties as per extant rate. No decision on the proposal to levy of duty on import of power equipment has been taken as yet.

The high market share that China currently enjoys is due to the fact that Chinese power equipment is much cheaper than that available domestically. Besides, the lead time in ordering Chinese equipment is substantially lower. Further, with Indian suppliers—already in limited numbers—busy with their current order pile, Chinese equipment remains the only logical alternative. Experts feel that once availability of domestic equipment improves, which is expected in view of the large manufacturing capacity coming up from new players, the Chinese grip might loosen a bit. The new crop of equipment suppliers is mainly in the form of joint ventures between Indian and multinational companies. Most of these JVs are aiming to produce supercritical-grade power generation equipment (See table), which is expected to witness widespread deployment in upcoming coal-fired power plants.

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JVs for Superctiical Equipment
Name of JV Local Company Equity (%) Foreign Partner Equity (%) Location Equipment
L&T-MHI Boilers Pvt Ltd Larsen & Toubro 51 Mitsubishi Heavy Inds, Japan 49 Gujarat B
L&T-MHI Turbine Generators Pvt Ltd Larsen & Toubro 51 Mitsubishi Heavy Inds, Japan 49 Gujarat TG
Toshiba JSW Turbine & Generator Pvt Ltd JSW Group 25 Toshiba, Japan 75 Tamil Nadu TG
Alstom Bharat Forge Ltd Bharat Forge 49 Alstom, France 51 Gujarat TG
Thermax Babcock & Wilcox Energy Solutions P Ltd Thermax 51 Babcock & Wilcox, USA 49 Maharashtra B
BGR Turbines Company (P) Ltd BGR Energy 74 Hitachi Ltd, Japan 26 Tamil Nadu B
BGR Boilers Pvt Ltd BGR Energy 70 Hitachi Power Europe, Germany 30 Tamil Nadu TG
B=Boilers, TG=Turbine-Generators
 
                 
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