Lack of new orders and fall in earnings have pushed BHEL to look for new business opportunities. The PSU has decided to focus on servicing the vast pool of existing power plants using its equipment, rather than wait for new orders for main equipment. It is also expanding its footprint in the renewable energy space to de-risk domestic business operations that is currently dominated by the thermal sector.
?We are seeing the slowdown as an opportunity to strengthen internal processes and explore new avenues for growth. The retrofit market for power project is a ready business waiting to be tapped and we are actively looking at a larger share of this growing area,? said a BHEL senior official.
As per estimates, projects worth over Rs 20,000 crore are waiting to be tapped in the retrofit segment. Most of the 16,000 MW of capacity in the 200-210 MW segment that want renovation has been supplied by BHEL.
As part of the strategy, BHEL has started tapping state power utilities with offers to renovate, modernise and uprate their old and ageing power plants that have outlived their designated economic life of 25 years. The offer includes extending the life of these old plants by another 15-20 years at a less than half the price of putting up a new plant. The company has already completed renovation and uprating projects for Punjab State Power Corporation, and utilities in UP and Maharashtra and are now eying similar projects in other states.
As per estimates, about 70 sets of a total 150 of 200-210 MW rating old power plants in the country immediately need renovation and uprating. This presents a business opportunity to the tune of over Rs 20,000 crore in this category of projects alone. There is also a scope to further expand the business by carrying renovation projects for higher rated projects.
?Our renovation and retrofit services have not only extended the life of projects by two decades, but also uprated their capacity from 100 MW to 110 MW and from 200 MW to 216 MW. In the process, the projects are also upgraded to conform to present day emission norms,? the official quoted earlier said. Business potential for BHEL is huge here as several state utilities are facing financial crunch and are looking at cheapest option to continue generating power.
Apart from the opportunity offered by retrofit market, BHEL is also betting big on the renewable energy sector. The company has already formed a joint venture with Power Grid and Solar Energy Corporation to set up world’s largest 4,000 MW solar power project in Rajasthan and another plant of similar capacity in Gujarat. All the main power equipment for these projects would be supplied by BHEL besides, it is also getting into manufacture of solar wafers used in the manufacture of phovoltaic cells used in solar panels.