Industry is cautiously optimistic: Supreme
November 23, 2016 5:42 pm
November 23, 2016 5:42 pm
Liquidity in the system increased resulting in release of orders. However further boost to the funding would materialise a large number of projects in transmission segment.
Harish Agarwal, CEO, Supreme & Co Pvt Ltd
The government should focus more on completing the existing plants rather than adding capacity, observes Harish Agarwal, CEO of Supreme & Co Pvt Ltd. “In immediate future, thrust of Ministry of Power is not on building new generation plants but completing those in pipelines and makes those plants which are shut operational. The country can manage for the next three years with existing plants that are currently under-utilised, and those that are under construction and upcoming renewable energy projects,” he comments.
“Right now thrust in making 24/7 power available to all which will create demand for the surplus availability of power,” he says.
Game changerWhen it comes to the game changer for this transformation Agarwal points out that, India has power plants with capacity to generate 300GW. These are operating at 64 per cent capacity because of inability of state distribution utilities to purchase electricity and sluggish economic growth. About a tenth of the total capacity is stranded due to lack of power purchase agreements while another 50GW is under various stages of construction. Meanwhile, there are plans to build renewable energy capacity of 175GW by 2022. India’s per capita electricity consumption, though increasing, is lowest among the BRICS nations and about one-third the world’s average. The energy deficiency is a low 2.1 per cent, but experts feel latent demand from remote areas is not being accounted for.
“Demand for electricity is likely to pick up after 2019 as the scheme to revive distribution utilities and village electrification programmes start yielding results. Ten states have joined the government’s Ujwal Discom Assurance Yojna and the centre plans to electrify 18,000 villages by May 2018,” he informs.
Speaking on the company’s contribution to this transformation he said, “We are an active player in T&D space both as supplier and EPC contractor. We are actively pursuing various discrete supplies and solution in the area of micro grids and distributed generation.”
Cautiously optimisticAgarwal points out, “Issues surrounding project clearances, coal, finance and poor health of distribution companies had hampered the growth of the sector, driving away investors. Many companies have put new projects and expansion plans on hold. This may lead to huge deficits in the period after 2019 as power plants take several years to be commissioned.”
Overall, in 2015-16, majority of industry’s growth was driven by domestic demand although there was increase in exports for transformers, cables, conductors, MCBs, meters, insulators etc. Further, among T&D, distribution segment seemed to be getting pushed by Central Electricity Authority through Integrated Power Development and DDUJY funding by Ministry of Power with over Rs 40,000 crore of work in pipeline.
“Liquidity in the system increased resulting in release of orders. However further boost to the funding would materialise a large number of projects in transmission segment. We, the industry are therefore cautiously optimistic for at least next 2 quarters of 2016-17,” he anticipates.
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