Power plant upgradation hinges on finance, technology and regulation: GE Power's Prashant Jain

As the country's thermal power generation capacities, which is roughly of 80-90 gigawatt (GW), calls for technological upgradation, there lies a dilemma for generating companies to make a choice between finance and technology. At a time when the regulators are pushing for public interest, the sector experts see a growing need for a right balance between technology, finance and regulations for the best consumer interest.

India currently lags behind in the adoption of the new technology in coal-fired power generation. The existing power generation capacities in India are old and needed to be upgraded, modernized and new technologies applied to make them more efficient.

"The current (plant) efficiencies are about 30-35 per cent across the board but with the new technology they can be brought up to 47 per cent. Coal being used as a base load will require those technological upgrades," said Kevin Cogo, General Manager, Rotating Equipment, GE Steam Power adding that in comparison to other regions globally, India is lagging a bit behind in technology adoption.

However, the power plants set-up relatively recently, may not need a technology upgrade so soon. But a calculation reveal that there is roughly about 80-90 GW of older power plants that demand upgrades.

On the challenges associated with the upgradation of the existing power plantsto achieve higher efficiency, Prashant Jain - Managing Director, GE Power India Ltd said, reasonable power tariffs, agreed through a long-term power purchase agreement (PPA) do make induction of new technology difficult.

"For the existing plant it is challenging to bring down the tariff. That is why discoms play a role for bundling the power and then distributing it. We have a mix of plants set up just three years ago but then the tariffs were much higher and the new tariffs which is coming in is very small percentage or a fraction. And with money already invested, it needs to be paid back," Jain told Businessline.

A robust open market for power can be an answer. Jain told that as far as one has tariff and investment commitment through PPAs, it becomes a problem to make a change (of upgrade the plant) during the course of the PPA. “Once the transition to open market happens, it would be natural for plants to upgrade," added Jain, who was in town for a factory visit.

"Unless they earn back the heavy capital intensive investment for the lenders and investors, it is hard for them to put more money in technology. And we can't simply dump the old capacities for newer ones with lower tariffs which is creating a big stress on the assets. The challenge is to find the balance from regulated market to open market," Jain stated.

GE Power India Ltd is looking to add newer capabilities at its Sanand facility for nuclear power turbines and generators in addition to coal power plants and other industrial applications. The company has so far invested about Rs 1,300 crore (approx $200 million) at Sanand, which is an integrated facility for engineering, manufacturing, testing and servicing critical and supercritical steam turbines and generators in the capacity ranging 30 MW to 1,000 MW.

COMMENT NOW