The bonhomie between Indian Prime minister Narendra Modi and visiting Chinese President Xi Jinping notwithstanding, country’s leading power equipment maker Bharat Heavy Electricals Ltd (BHEL) has stepped up its efforts to give rival Chinese equipment makers a taste of its technological prowess.
BHEL has launched a product range that is not only in harmony with the policy intent to keep the carbon intensity of India?s growth regulated, it is also priced competitively, an area where Chinese equipment makers have beaten the Indian company. The new equipment will cut down prices of main power equipment (boiler, turbine generators or BTG) that currently stands at around Rs 2.6 per MW. The Chinese offer a much more competitive price of around Rs 1.6 per Mw.
The series includes equipment sets of 600 MW that could match up to Chinese super critical sets of 660 MW without any additional cost to buyers. Similarly, BHEL has introduced equipment that has enhanced rating of 500 MW sets to 525 MW and 250 MW to 270 MW, and a new category of 490 MW set and another 150 MW size equipment needed for small power projects.
Most of the new equipment is in sub-critical range where the company has seen maximum competition in the past, especially from China. In the super-critical segment, BHEL has started offering a new equipment range of 700 MW. This will come handy when use of these products will be mandatory (proposed from 13th Plan onwards).
?The new range of equipment has given BHEL an edge over Chinese goods as they not only offer higher efficiency but also bring down the per MW cost for buyers. Our new 600 MW sets have sold like hot cakes with orders for close 20-25 sets, the highest for the category over the last few years,? a senior BHEL board level official said.
Among the buyers is Jindal Power, which had earlier ordered Chinese gear for its Raipur plant, and which has now opted for BHEL products for its 250 MW set. The company has also ordered four 600 MW sets for its power plant in North Chennai. BSES has also opted for new range of BHEL products and so have a few state power utilities. Companies such as India Bulls, Videocon, Monnet Ispat, Adhunik, Durgapur Power, Sona Power, Hindujas, Visa Power and Avantha have lapped up the new BHEL offerings, some of them even terminating their contracts with Chinese vendors.
The influx of cheap and efficient Chinese equipment did affect BHEL business badly – out of 54, 964 MW of power generating capacity added in the 11th Five-Year Plan, equipment from Chinese manufactures and suppliers accounted for about 18,500 MW, or 34%. The contribution of Chinese players towards thermal capacity addition targeted in the 12th plan and beyond has shot up to 42.5%, or 39,570 MW out of the cumulative 93,084 MW.
The negative impact is also reflected in BHEL’s shares, which have declined from 49% in the 11th plan to 41% in current plan.