This photo, taken on April 6, 2022, shows a panoramic view of the National Thermal Power Corporation (NTPC) power plant in Dadri. The jet-black piles of coal at the Dadri power plant gleam in the afternoon sun, a raw example of India’s dependence on coal – a dependence the country has struggled to shake off despite mounting pressure.
Prakash Singh | AFP | Getty Images
India has asked power companies to order $33 billion worth of equipment this year to rapidly add coal-fired power generation capacity in coming years, two government officials said, as the South Asian country struggles to meet growing power demand.
The unprecedented move by the government will lead to record tenders for equipment within a year by major power companies such as the state-owned Electric Power Corporation. State Power Corporation and sJV and private companies Adani Power Company Essar Power will help add 31 gigawatts (GW) in the next 5-6 years, sources said.
Typically, governments leave tendering time to the companies themselves.
Sources said expediting orders for equipment for new coal-fired power plants was discussed at a meeting held by Power Minister Manohar Lal soon after Prime Minister Narendra Modi’s federal cabinet was formed early last month.
This target is very ambitious given that the country has ordered approximately 2-3 GW of equipment capacity per year in previous years (excluding last year’s order of 10 GW).
India is rushing to add new coal-fired power plants as existing plants can barely keep up with high electricity demand during non-solar hours.
Post-pandemic, the country’s electricity demand has hit new highs amid the fastest economic growth among major economies and an increase in the number of heat waves.
India experienced its worst power shortage in 14 years in June and had to avoid nighttime blackouts by postponing planned factory maintenance and invoking emergency clauses to force companies to rely on imported coal and electricity to run factories.
State-owned Bharat Heavy Electrical Ltd (BHEL)Sources said the company that won all the power equipment contracts in last year’s auction is likely to get most of the new equipment contracts.
larson and toubrowThey said the only other power equipment maker on the market did not participate in most of last year’s bids.
The Power Ministry, BHEL, Adani, NTPC, SJVN and L&T did not immediately respond to emails sent by Reuters. The sources spoke on condition of anonymity because they were not authorized to speak to the media.
“The last big power equipment orders were around 2009-10, when Chinese companies got a big piece of the pie and ordered about 20 gigawatts,” one source said.
Policy vagaries and a lack of orders for coal-fired power plants over the past few years have forced other equipment suppliers such as Thermax-Babcock, BGR-Hitachi and South Korea’s Doosan to close manufacturing plants in India.
Since 2020, the country has blocked contracts with companies from countries with land borders such as China through mandatory regulatory approvals.
India’s rapid development of coal-fired power plants since late last year to meet its electricity needs threatens to undermine the world’s third-largest emitter of greenhouse gases’ progress in weaning its economy away from carbon dependence.
In March, Reuters reported that India’s private sector had expressed interest in building at least 10 gigawatts of coal-fired power capacity within a decade, ending a six-year drought of heavy private participation in the industry.
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