BHEL Overview

India's Push for Coal-Fired Power Expansion:

• India is urging power companies to order $33 billion worth of equipment this year to accelerate the addition of coal-fired power capacity due to high electricity demand.
• The government's initiative involves major firms like NTPC, SJVN, Adani Power, and Essar Power, aiming to add 31 GW in the next 5-6 years.
• This move deviates from the norm where companies decide on tendering timing themselves.
• The decision was made after a meeting led by Power Minister Manohar Lal following the formation of Prime Minister Narendra Modi's cabinet.
• The country is facing challenges meeting power demand, especially during non-solar hours, prompting the rush to build new coal-fired plants.

Industry Impact and Challenges:

• State-run Bharat Heavy Electricals Ltd (BHEL) is expected to secure most contracts for the new equipment.
• Lack of orders for coal-based plants in recent years led to the closure of manufacturing units of other equipment suppliers in India.
• Policy changes discourage contracts with countries sharing a land border, such as China, since 2020.
• Private Indian firms have shown interest in building 10 GW of coal-fired power capacity, marking a return to significant private involvement after a six-year hiatus.
• The rapid expansion of coal-fired power plants in India risks undermining efforts to reduce carbon emissions.