Larsen & Toubro (L&T), India’s largest engineering, procurement and construction (EPC) player, along with its joint venture partner Mitsubishi-Hitachi Power Systems has secured a large steam generator and associated packages contract for 2x660 (1320) MW thermal power project of UP government in Bulandshahar district. The order comes at a time when thermal power sector is undergoing severe stress and overall boiler, turbine, generator (BTG) orders have depleted consistently over the last four years.
The current utilisation of BTG manufacturing capacities in the country has dropped to 29% as of today compared with 37% in FY16. The total BTG orders in pipeline stands at 8,000 MW while the total manufacturing capacity stands at 27,000 MW.
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Shailendra Roy, CEO & MD of L&T Power, and whole-time director of L&T told Financial Express that the major issue faced by the industry is the strong focus on solar and renewables. While total contribution of renewables to generation of power is mere 9% as against their installed capacity of 22%, the majority of power produced is from coal-based plants.
“We need a proper mix of thermal, solar, wind, hydro and nuclear right now, especially when base-load power is thermal. Initiatives have been taken by companies to reduce the SOX (sulphur di-oxide) and NOX (nitrogen di-oxide) gases — the core pollutants from coal based plants — to make them flue gas de-sulphurisation (FGD) compliant as per central government mandate. This makes the coal based plants as good as renewables,” Roy said.
“For GDP to grow at 7%-8% we will need strong contribution from the coal based power plants, which government has realised and they are focusing on the right mix now,” Roy said. L&T-Mitsubishi JV is operating at around 65% utilisation level, with utilisation of boilers at 70% and turbine generators at 60%, Roy said.
The joint venture is currently executing nine units of steam generator packages totalling 5,940 MW. In addition, 11 supercritical units totalling 7,340 MW, have been completed and are under commercial operation.