Alstom sees big opportunities in ultra mega power projects

Alstom India sees a good business opportunity in the Centre’s plan to set up five ultra mega power projects (UMPPs) through competitive bidding.

“The five projects are likely to see investments of ₹1 lakh crore and Alstom will be keen to bid for the supply of electrical equipment and setting up of the transmission and distribution system,” said Rathin Basu, Country President, Alstom India and South Asia.

As announced by Finance Minister Arun Jaitley in the Budget, the projects will be offered in a ‘plug and play’ mode, where land, coal linkages and power purchase agreements will be in place before they are auctioned.

“This will give power companies more confidence and stability of revenue flows and the development cycle of the projects would reduce considerably.

“Further, the move towards building larger projects will bring in economies of scale and allow efficient utilisation of fuel,” Basu added.

Among other positives for the power sector, Basu said expectations are that projects will also be eligible to utilise the National Investment and Infrastructure Fund.

“The increase in clean energy cess to ₹200 a tonne is likely to marginally increase the tariffs for thermal electricity but would also double the resources for the National Clean Energy Fund and provide an additional impetus for clean and green energy,” he added.

On the implications of the Budget proposals for the power sector, Basu was cautiously optimistic.

“While there are positive initiatives for the power sector, one needs to see the execution speed, particularly in view of the huge non-performing assets of independent power producers and the State electricity distribution utilities (discoms),” he said.

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