The drive to make power plants compliant with environmental norms is going to open up a Rs 1.3-lakh-crore opportunity in the next three years for emission control equipment providers.
The drive to make power plants compliant with environmental norms is going to open up a Rs 1.3-lakh-crore opportunity in the next three years for emission control equipment providers. According to a latest report by research firm Motilal Oswal Securities, companies such as BHEL, L&T, GE Power and Reliance Infra should benefit from the opportunity. The latest emission norms should also bring some respite to the power sector, long mired by the tepid growth of electricity demand on the backdrop of 40 gigawatt (GW) of power-generating capacity being stranded, either for want of power purchase agreements (PPAs) or unavailability of fuel. Motilal Oswal estimates that about 17 GW of power plants will have to be decommissioned as they would not meet the emission norms within the 2022 deadline.
About 38 GW of power plants have already floated tenders to install flue gas de-sulphurisation (FGD) in power plants, of which nearly 32 GW has been done by state-owned NTPC itself. As recently reported by FE, Reliance Infrastructure (RInfra) emerged as the lowest bidder for a project tendered by NTPC to install FDG equipment in its 1,500 MW Jhajjar power plant in Haryana. Sources said the order value of the project was expected to be around Rs 567 crore. The auctions for such projects are expected to be more competitive than usual because EPC contractors would also participate here, apart from the conventional boiler-turbine-generator (BTG) suppliers.
The ministry of environment and forests had notified new emission norms for power plants in December 2015, with a deadline of two years for implementation. The Central Electricity Authority (CEA) had prepared a revised phased implementation plan for installation of FGD in 161 GW of power plants. The central pollution control board, in December, 2017, directed power plants to ensure compliance within 2022, as per the revised plan.