The Hindu Business Line : Core sector set to ride power addition

New Delhi June 14 If the Centre manages to get anywhere close to capacity addition target of 78,000 MW during the current Plan period, a number of sectors such as cement, steel, aluminium, copper and zinc could witness a big boost in demand.

The Central Electricity Authority (CEA) estimates suggest the need for over 306 lakh tonnes of cement, 80 lakh tonnes of structural steel, 51 lakh tonnes of reinforcement steel, 11 lakh tonnes of high-end CRGO (cold rolled grain-oriented) steel, 16 lakh tonnes of aluminium and eight lakh tonnes of copper, besides other materials, to support the targeted generation capacity addition programme and accompanying schemes to beef up transmission and distribution infrastructure.

To put the numbers in perspective, the estimated cement requirement by the power sector during the Plan period translates into 20 per cent of total cement despatch (1,550 lakh tonnes) achieved in 2006-07.

The steel demand by the sector would be 42 per cent of the country's current total (crude) steel-making capacity of 340 lakh tonnes.

Despite the Centre's dismal track record at sticking to capacity addition targets, experts point to a significant jump in demand for sectors that supply inputs going into the main plant equipment as well as erection and construction activity.

"The massive capacity addition programme chalked out for the current Plan requires that all key inputs are made available matching with the project implementation schedules," a Government official said.

Scaling up

"Assessment of material requirement on a broad basis has been worked out to enable industry to plan and scale up capacities."

In the case of thermal projects, the estimates firmed up by CEA using historical data for NTPC's stations point to average cement requirement for coal-fired and gas-based stations of 150 tonnes and 60 tonnes per MW respectively.

In the case of hydel projects, run-of-the-river projects have lesser magnitude of civil works, while storage type projects involving construction of dams require higher levels of inputs.

Transmission and distribution (T&D) works require cement mainly for foundation works of towers, pole protection arrangement for T&D lines and for construction of sub-stations and switchyards, while steel is required for towers and structures.

Besides, distribution transformers use CRGO steel as a critical input.