Tough mission ahead

October, 2013


In order to meet the future demand arising out of the planned generation capacity addition of about 88.5 GW and 93 GW for 12th and 13th Plans respectively, it is extremely important for the domestic BTG equipment manufacturers to be in synchronisation with domestic transmission and distribution equipment manufacturers. Pradeep Pandey provides a snapshot of this industry.

Generation equipment such as boilers and turbines are being produced at full capacity utilisation to meet the growing demands in the country. Many Indian private engineering majors like L&T-MHI, Alstom-Bharat Forge, BGR-Hitachi and Thermax-Babcock have set up new capacities, while the existing ones like BHEL is augmenting their capacities.

In the last 4-5 years, the boiler and turbine segment witnessed significant investment from foreign players who are setting up their manufacturing facilities in India. In addition, there have been significant imports of boiler, turbine and generator (BTG) equipment from countries mostly from Chinese and South Korean markets. Indian players, as well as global players, focusing on the Indian market, have put in facilities to manufacture products based on supercritical technology.

According to a latest report released by Ministry of Heavy Industries & Public Enterprises, Government of India, during the 11th Plan, the share of supercritical technology was 14 per cent, while in the 12th Plan the share of supercritical technology will be more than 60 per cent. More than 80 GW of supercritical sets have been awarded by the Indian government till date. Foreign players have been the recipients of the major share of such orders.

Foreign companies have received huge bulk orders, primarily from Indian private players, for power plants to be commissioned during the 12th and 13th Five Year plans. As a result, most BTG equipment players in India do not have healthy order books.

A large share of India's current installed thermal capacity is more than 20 years old. Advanced ultra supercritical boilers are being developed in the country. Retrofitting and refurbishing of old existing plants would become a major source of demand in the coming years.

Domestic capacity and utilisation
The capacity in the domestic BTG equipment industry segment is currently 25,000 MW per annum and is expected to rise to 40,000 MW per annum by 2014-ű15. Many Indian companies have entered into partnerships with global players and there are significant capacity addition plans in the next few years.

Interestingly, two-third of the BTG requirement from the 12th Plan has already been ordered. If the present scenario continues, where close to 45 per cent of the demand is catered to by foreign players, it would create significant overcapacity in the Indian industry in the coming years. The move by the country's largest generator NTPC in enforcing an offset mechanism, where the supplier of major equipment needs to set up local manufacturing in India as qualifying criteria for the bid has been a welcome move to safeguard the interests of the domestic equipment industry.

Current status and areas of concern
While BHEL continues to be the largest player in the BTG sector, L&T-MHI joint venture has also commenced supplies. Seven more joint ventures for manufacturing BTG equipment domestically are likely to commence production soon.

According to data provided by IEEMA, by 2013-14, domestic manufacturing capacity of thermal sets (steam generators) is expected to include BHEL (17,500 MW), L&T-MHI (6,000 MW), Thermax-Babcock (3,000 MW) and BGR-Hitachi (3,000 MW). In 2014-15, new capacities of Cethar Vessel-Riley Power (4,000 MW), Ansaldo-Gammon (4,000 MW) and Doosan (3,000 MW) are also expected, increasing the total capacity to 40,500 MW. Similarly, in the case of thermal sets (turbine generators), by 2013-14, domestic manufacturing capacity is expected to include BHEL (13,020 MW), L&T-MHI (6,000 MW), Alstom-Bharat Forge (5,000 MW), BGR-Hitachi (3,000 MW) and Toshiba-JSW (3,000 MW). In 2014-15, capacities of Doosan (3,000 MW) and Ansaldo-Gammon (2,000 MW) are also expected, increasing the total capacity to 35,020 MW.

Coal, with about 66 per cent of the share, is likely to remain the predominant source of fuel in the foreseeable future. However, coal-fired power generation is also the single largest source of carbon-dioxide (CO2) emissions, which is contributing to climate change. India is likely to face increasing international pressure to reduce its emission intensity. The National Action Plan on Climate Change (NAPCC) of the Government of India emphasises the use of clean coal technologies such as supercritical, ultra-supercritical and integrated gasification combined cycle (IGCC). This helps minimise CO2 emissions while giving the highest possible energy efficiency and reducing the coal required per unit of power generated. Supercritical technology has already been adopted commercially in India. A large number of 660 and 800 MW supercritical thermal power plants are under construction. Power plants with ultra-supercritical (USC) steam parameters (i.e., -¦250 kg/cm2 / 600oC), which have higher efficiencies are likely to be set up in India in the next few years. Ultra supercritical plants are already in commercial operation in Europe, Japan, China, etc.

According to Indian Electrical Equipment Industry Mission Plan 2012-2022, as is the case for all major technologies, developed and applied on a large scale costs are the highest in the demonstration stage. As the technology matures and commercial sized IGCC plants rated 450 MW to 600 MW are set up, the capital cost per MW is expected to reduce and performance in terms of efficiency, availability and reliability would improve considerably. At this stage of technology, the governments in the US, Europe, Japan and China have funded IGCC plants up to 50 per cent.

Meanwhile, BHEL is now setting up a 182 MW IGCC pilot plant for commercial operations with APGENCO at Vijayawada and 100 MW IGCC plant with NTPC at Dadri. BHEL has already completed the technical development of IGCC and detailed engineering of scaled up rating has also been completed. It plans to operationalise the plant by 2015.

Advanced ultra-supercritical
Alstom, a pioneer in the ultrasupercritical technology in the world, is setting up a joint venture in India with Bharat Forge for BTG equipment. Additionally, the L&T-MHI joint venture is ready to supply ultra supercritical boilers and generators rated up to 1,000 MW. BHEL, IGCAR and NTPC are in the process of developing this technology in order for it to use Indian coal.

R&D on the Adv-USC cycle, with steam parameters of 300 kg/cm2 / =700-¦C, is in progress in the US, Europe and Japan. With such steam parameters, the efficiency of the power plant is expected to be in the range of 45-47 per cent gross on higher heating value (HHV) basis with Indian coal under Indian ambient conditions. Under the National Mission for Development of Clean Coal (Carbon) Technologies, R&D Project for development of advanced ultra supercritical (Adv-USC) technology for thermal power plants is proposed to be taken up on mission mode, as a consortium project involving all concerned stakeholders. This will be followed by the establishment of 800 MW Adv-USC demonstration power plant.

The project proposed by BHEL, Indira Gandhi Centre for Atomic Research (IGCAR) and NTPC, with funding from DHI, should be implemented early. It should be ensured that the technology, once developed, is accepted by all utilities and IPPs. Development of advanced ultra supercritical technology should be complete by 2015. The demonstration plant could be ready in seven years time. An investment of Rs 1,250 crore has been proposed for this project.

With increasing demand in line with huge planned generation capacity in the country and international pressure on usage of clean technology, there will be tough competition. On one side price competitiveness and on the other side will be need for advanced technology. Indian Electrical Equipment Industry Mission Plan 2012-2022 has also assured that the government may ensure that this technology, once put to commercial use, is accepted by NTPC, IPPs and all the utilities.