In order to promote domestic manufacturing of equipment used in the power sector, the Union power ministry is planning to come up with a production-linked incentive (PLI) scheme. The government is also drafting plans to set up three manufacturing zones for power equipment in the country.
Addressing the annual convention of Indian Electrical and Electronics Manufacturers’ Association here, Alok Kumar, secretary at the ministry of power, said that “(several) items used in transmission and distribution systems have been identified for augmenting their domestic manufacturing”, adding that these products were also seen to have ‘big export potential’.
Sources in the power ministry told FE that the new PLI scheme was in its early stages of planning, and would likely include components used in supervisory control and data acquisition (SCADA) systems, special cables and gases used in transformers, which are currently largely imported.
As for the three power equipment manufacturing zones being planned, a scheme will be sent for the approval of the Union finance ministry. The zones will be set up in states that will offer cheapest land rates and lowest power tariffs, and around Rs 300-400 crore has been initially earmarked to develop common infrastructure in each zone.
The requirement of SCADA systems and advanced power equipment are seen to increase in the coming years, thanks to the latest Rs 3-lakh-crore Central government scheme aimed to turnaround state-run power distribution companies (discoms). As per the design of the scheme, loss-making discoms will have access to central government funding only after they upgrade their distribution infrastructure and deploy technologies such as SCADA systems to bring down losses.
The Centre has already announced a Rs 4,500-crore PLI scheme for solar module and cell manufacturing, which aims to add 10,000 megawatt (MW) capacity of integrated solar manufacturing plants. Sources said the government has received applications for setting up 54,809 MW manufacturing capacity under the scheme from 19 companies including Reliance Industries, Adani, ReNew Power, L&T, Tata Power, Acme Solar, Vikram Solar and state-run Coal India.
Also, Union power minister RK Singh recently said to expedite the uptake of green hydrogen, the government will come up with a PLI scheme for setting up electrolyser manufacturing capacities. Electrolysers are used to produce green hydrogen using electricity generated from renewable energy sources.
As much as 8,800 MW of electrolyser capacity is required to meet the demand of the obligated industries, if they are mandated to source even 10% of their requirements through domestic green hydrogen. The government intends to put green hydrogen consumption obligations on fertiliser producers and petroleum refiners to create a hydrogen value-chain in the country and bring down the costs of hydrogen production.