The Hindu Business Line : BHEL powers ahead in supercritical segment

BHEL’s 2 x 800 MW supercritical boilers order from Andhra Pradesh Power Development Company may be viewed as a confidence-building measure for the company’s capabilities in supercritical technology — a segment that may witness increasing domestic and overseas competition.

BHEL has now bagged the Rs 2,500-crore boiler order at Krishnapatnam, outbidding its domestic competitor, Larsen & Toubro.

BHEL was the L1 bidder for the boiler project. Earlier in June, the company was denounced for losing out on the turbine portion of the Krishnapatnam contract to Larsen & Toubro. The latter, with its joint venture partner Mitsubishi, had aggressively bid for the turbine project. This had raised concerns about the technological capability and cost-competitiveness of BHEL in this space.

Signing agreement

While the current order would be the company’s maiden order in the 800-MW supercritical category under the international bid route, BHEL had already signed an agreement with the Tamil Nadu Electricity Board for a joint venture to generate power by setting up a 2 x 800 MW supercritical thermal plant.

BHEL has also won a 2 x 660 MW supercritical project from NTPC for its Barh II project.

The above two projects could be viewed as early initiatives in this segment before moving to competitive bids in the supercritical space. The Krishnapatnam project would, however, act as a good reference point for future orders.

While the new order would definitely boost the company’s bulging order book, the supercritical segment is likely to remain an insignificant contributor to the company’s revenues.

Hence the order is unlikely to make any significant impact on the company’s profitability.

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