{"id":134493,"date":"2023-08-27T09:39:23","date_gmt":"2023-08-27T09:39:23","guid":{"rendered":"https:\/\/finbestnews.com\/?p=134493"},"modified":"2023-08-27T09:39:23","modified_gmt":"2023-08-27T09:39:23","slug":"why-private-manufacturers-shun-super-critical-thermal-plants","status":"publish","type":"post","link":"https:\/\/finbestnews.com\/business\/why-private-manufacturers-shun-super-critical-thermal-plants\/","title":{"rendered":"Why private manufacturers shun super-critical thermal plants"},"content":{"rendered":"
This includes distancing themselves from the new and emerging super-critical technology.<\/strong><\/p>\n Leading private sector manufacturing majors are not keen on the super-critical thermal power plants, which are slowly becoming the norm for the power-generation sector.<\/p>\n In contrast, government-owned manufacturing major BHEL is pinning its growth plans in the power sector on this new technology.<\/p>\n Fueled by energy transition objectives and stiff competition from state-owned BHEL in this segment, companies such as Larsen & Toubro (L&T) and Thermax, typically big component suppliers to the thermal power industry, are stepping back from thermal power.<\/p>\n This includes distancing themselves from the new and emerging super-critical technology.<\/p>\n Super-critical power plants operate with 20-30 per cent more water efficiency compared to conventional thermal power, and also generate 20 per cent fewer emissions by the same comparison.<\/p>\n All new power plants in the country are being constructed using super-critical technology.<\/p>\n Senior executives from L&T (L&T) and Thermax Global have expressed their lack of interest in bidding for potential orders in the super-critical segment.<\/p>\n For both companies, the dissuading factor remains the same: the lack of sufficient orders.<\/p>\n Ashish Bhandari, managing director and chief executive officer for Thermax, said in a post-quarterly results call that super-critical power projects were long-term in nature.<\/p>\n The company does not find it a viable option to train and allocate its resources for a one-off or mere handful of such projects.<\/p>\n In recent years, Thermax has shifted its strategy to concentrate on green energy projects.<\/p>\n S N Subrahmanyan, managing director and CEO of L&T, said the company was unlikely to bid for any super-critical projects.<\/p>\n He said: “For the handful of orders we have to compete with BHEL, I don’t think so (we will participate),” he said, adding that competing for these projects with BHEL, which has vast idle capacity, could result in low margins.<\/p>\n BHEL has in its portfolio some of the largest super-critical thermal power plants.<\/p>\n During a recent analyst call, the company’s management projected that close to 20-25 Gigawatt (Gw) will be tendered out in the next three-four years.<\/p>\n “In the thermal pipeline, we are looking at almost 3 Gw where we are favourably placed. Another almost 6 Gw is under bidding already and almost 9 Gw to be bid out, which may, of course, go into the next year,” the management said during an analyst concall in May 2023.<\/p>\n “There was an 8.87 per cent growth in electricity generation in FY23, which is expected to grow by another almost 8 per cent in FY24.<\/p>\n “With the order for the 2×660 Mw NTPC Talcher thermal power plant, BHEL has reasserted its market leadership position in the segment and is targeting other upcoming opportunities as well,” said the management.<\/p>\n Among the thermal capacity coming into play, NTPC has 7 Gw of capacity on standalone and an additional 3 Gw with its joint venture subsidiaries.<\/p>\n Other organisations planning thermal capacity include Coal India, DVC, and Neyveli Lignite. States are also working on building thermal capacity to the tune of 4 Gw.<\/p>\n For L&T, the decision to refrain from participating in the super-critical ecosystem is also guided by its choice to invest more in green energy and reduce fossil fuel exposure.<\/p>\n In a recent interview, A M Naik, chairman for L&T, told Business Standard<\/em> that while the company was contemplating setting up shop for its green energy business, he suggested they use the existing shop floors meant for coal-based power plant projects.<\/p>\n “At Hazira, I suggested not to create new shops, use the ones for coal (thermal power projects) shops, for green,” he said.<\/p>\n <\/p>\n