Power generation has become an important issue today due to coal shortage in India, which EPC companies like Techno Electric & Engineering Company Ltd (TEECL) are focusing on. P P Gupta, managing director, of the Rs 950-crore TEECL discusses strategies for future growth in an interview with Dilip Kumar Jha. Edited excerpts:
What is the outlook for power sector in India ?
The government has set an ambitious target for new 75 GW of capacity addition in the XIIth Five Year Plan to meet the growing needs of electricity in the country with an outlay of Rs 9.3 trillion. The Union Budget too laid emphasis on this ailing sector by allowing external commercial borrowing to part finance power projects. The overall outlook of the power sector, therefore, seems positive. There is a strong correlation between GDP growth and power demand. The market potential to sustain the GDP growth rate of India at 8 per cent plus per annum needs the power sector to grow at 1.8-2 times the GDP growth rate. The per capita consumption of power is continuously increasing and is expected increase further to 1,000 kwh by December 2012.
How would India cope with coal shortage ?
Thermal power generation which depends mainly on coal accounts for nearly 65 per cent of the electricity generated at present. Four years ago in 2007 this was at 77 per cent. With a major shortfall in the coal behemoth’s production this year, it has been asked to sign FSA’s with utilities with a penalty clause on non-supply. Such a grim situation in the ailing sector has surfaced the need to move towards energy efficient alternate sources of power generation like hydro, wind, solar as well as nuclear energy. These alternatives will soon be reaching grid-parity and compete with conventional costs. Moreover, greenhouse gas emissions by coal-fired stations are raising environmental concerns in the new era of clean energy sources.
How has TEECL contributed to the growth of power sector in India ?
Techno is well poised to capitalise on the growth in the power sector. The company proposes to build upon its experience and proven expertise in bidding for larger projects and consolidate its presence across a lower number of high value projects. TEECL provides engineering, procurement and construction services to all the three segments of power sector namely generation, transmission and distribution. TEECL has been involved in one capacity or other in setting up over 50 per cent of India’s thermal power generating capacity and major portion of the national power grid. With over three decades of rich experience in the power sector, TEECL has been the preferred vendor for all PSUs.
What is your investment strategy going forward ?
TEECL has massive expansion plans with a capex of around Rs 10,000 crore in the power industry, Rs 7,000 crore in Generation & Rs 3,000 crore in T&D by 2017. On the power Generation front, we plan to increase our capacity to 1,250 MW by the end of the 12th Five Year Plan period entirely through non conventional sources, adding around 200 MW capacity annually. Currently we have 207 MW wind power generation capacity. The idea was developed keeping in mind the limitation of resources available for power generation through conventional sources and the way to a cleaner and steady energy abundant future is non-conventional energy.
What is your future plan ?
We have recently commissioned first of its kind 400 KV intra-state power transmission project successfully in public-private partnership with Haryana government initiative. This project consists of transmission line extending from Jharli to Kabulpur, Rohtak (35 km) and Kabulpur to Dipalpur, Sonepat (64 KM) with 2 No. sub‐stations at Rohtak and Sonepat. The transmission network is designed to facilitate evacuation of 2,400 MW of power from Jhajjar Power Plant in Haryana. This project in Haryana marked our entry to the power transmission space in India. Public-private partnership model proves the ideal way for such projects to be feasible in the longer run. With successful and timely commissioning of the project, we expect to partner for more of such type of upcoming projects in the transmission space. We plan to add one transmission network to our portfolio annually for the next five years.