Why need to purchase excess power?

Neelav Samrat De, Asst. General Manager (Marketing), Andritz India

If India was a power surplus now, why is the need to purchase excess power.
– Neelav Samrat De, Asst. General Manager-Marketing, ANDRITZ India Pvt Ltd
  Andritz India Pvt. Ltd was the first MNC in the hydro power sector to enter the sector in 1999. Since then, it has had the opportunity to win contracts on a competitive basis to execute the electro-mechanical packages of numerous projects under the aegis of NHPC, SJVN, NEEPCO, KSEB, TANGEDCO, KPCL, HPPCL, JKSPDC, Athena Group, Jai Prakash, KSEB, MeSEB amongst other clients in Vietnam, Lao PDR, Indonesia, Malaysia, Thailand, Korea and also in Europe and Canada.  The company also has 60 per cent of Nepal’s hydro market share, which is a proud milestone for them.
Andritz India adapted to manufacturing a majority of the equipment from its local works in Prithla and Mandideep to become cost competitive. While keeping a strong tab on quality assurance and timely deliveries of its esteemed clients, it has created a strong brand of the company in India and the South East Asian region today.
The company is also ramping up its manufacturing capacities as it plans to diversify into other sectors relevant for the growth of the country.
Dismal situation in the marketTechnically, India is power surplus today. The essence lies in the fact that the manufacturing industry has not growth at par with demand and the main reason why the demand and supply gap has reduced. There are many states which do not have enough power supplies for its agricultural requirements and are having to purchase power from the exchanges at higher tariffs. “If India was a power surplus now, why is the need to purchase excess power? Secondly, there are numerous power plants, which are completely built but are lying idle due to lack of coal linkages. The situation is dismal as otherwise portrayed in the market. So either we say we are and will be power surplus in 2016-17 or the government puts an impetus on the growth of the manufacturing sector. We have opted to use the former,” states Neelav Samrat De, Asst. General Manager-Marketing, Andritz India Pvt Ltd while not being very happy about the dismal situation in power sector.   India is shifting its fore from industry and becoming a services driven economy. “While we are witnessing a slump in sectors like infrastructure, manufacturing, IT and others, there is a sharp growth in the services sector. Power demand will obviously decrease with this changing scenario in the economy and hence we can say that we are ‘technically’ power surplus. With no growth in industry, the demand factor will always remain less than the supply,” he adds.
Is there really any game changer?  Capacity additions in thermal and renewable have happened in the last 2-3 years. But these are roll-overs or spillages from the previous Five-Year Plan. Recently, we heard the government’s keenness to develop 10,000 MW of hydro pumped storage schemes. This is a good step to tackle grid stability as we see a growth in the solar power segment. The solar segment has crossed the 22GW mark and another 9GW are under tendering. This renewable grid connected power will need stability which can be done with the introduction of PSPs. “Hydro also plays an important role in grid stability as it requires lesser time to shut down as compared to thermal plants,” emphasised De.
A smart grid that is being talked about will need a diverse energy mix to have stability. The stabilising factors will also need to be implemented and given importance. “While India plans to import power from Nepal and Bhutan through hydro projects, for projects that are already under construction, why would a power surplus nation need more power? We also hear that the Minister of Power has asked energy PSUs and IPPs to venture overseas as India does not require rapid capacity additions. For the facts stated in the previous question, we do not think there is any game changer happening,” says De considering that there is no game changer for the transformation. 
Failure of ‘Make in India’ initiativeAndritz India Pvt. Ltd, a wholly owned subsidiary of ANDRITZ HYDRO Austria, has two completely built state-of-the-art manufacturing facilities in India. “The company has already executed and executing projects totalling to almost 21,,000MW in India and the neighbouring countries. However, in spite of having such local capabilities, we are not being able to have total capacity utilisation of our factories, because there are no new hydro projects coming up for development. While India is considered the company’s top priority hydro market, we do not see any positive yields in the sector,” concerns De about the company’s contribution to the transformation.
He further informs, “There are numerous joint venture hydro projects totalling to over 4,000-5,000MW which the Indian government and the Royal Government of Bhutan have decided to develop jointly. Global companies such as ours however do not meet the qualifying criteria to bid in such projects simply because the focus is to safeguard the interest of a particular state owned utility. This in itself defeats the ‘Make in India’ initiative.”
“While we are keen to continue with our contribution to the growth of the country’s ‘transforming’ power sector, we find ourselves in a very peculiar situation. We hope to see better days ahead. Only time will tell,” concludes De with hope. 
Andritz’s turnaround storyANDRITZ HYDRO holds a better position in India’s hydro power sector. When it started out in 1999, it had a staff of 20 which today have grown to over a 1,000 with qualified engineers as the major workforce. The company has been accredited with various standard certifications. Amongst one of its success stories, it is proud to execute India’s largest IPP project in Sikkim namely Teesta III, which will add 1,200 MW to the grid by 2018. “Our expertise in refurbishment, modernisation and updating of old projects makes us the leaders in this space in India. We have updated and modernised various plants in Tamil Nadu, Karnataka, West Bengal and Kerala,” said De. 
Ray of hopeOn one hand, we say we are power surplus and on the other we have ambitious power addition plans. It’s a little contradictory in nature which we have to accept! However, on the positive side, the government is planning to add all hydro projects up to 25MW under renewable. If this goes through as an amendment, the country could well plan for an ambitious renewable capacity addition of 225GW by 2022. “There is a huge untapped hydro potential yet to be tapped in Uttaranchal, Himachal Pradesh, J&K and Arunachal Pradesh. Hopefully, the new hydro policy expected in October 2016, will address the development of such projects in the coming Five-Year Plan.  In spite of the current state of the sector, we are confident that the worst is over,” briefs De on business opportunities.
“Andritz Hydro continues to keep India as a strategically important market and we are committed to continue with our deliverance to our esteemed clients. We will stay as committed,” assures De.

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