Fuel supply constraints and delay in land acquisition adds to delay in BGR Energy’s power generation plans
The Chennai based EPC company, BGR Energy is diversifying in a larger way by entering both -the power production and boiler manufacturing segments. The company, with Rs 7500 crore in EPC, is in the process of setting up the boiler plant in Chennai.
BGR Energy, which announced its power generation plans, has hit a road block because of the fuel supply constraints and the problems in acquiring land for the plant. The company is looking at setting up two power plants, one each in Tamil Nadu and Orissa, both of which will have a capacity of 1320 Mw (2×660 Mw).
“Acquisition of land and getting fuel supply is a concern. For the land, we are working closely with both the state governments. We are optimistic of finding the required land in the near future,” said Prabhu Srinivasan, VP Finance BGR Energy. Getting fuel supply for the plant in the current scenario where the country is going through a severe shortage of fuel for power seems to be a constant concern. In the recent past, the country had a brush with a near blackout because of the shortage in coal supply from Coal India, the primary suppliers of domestic coal. BGR Energy’s delay of power generation plans is a reflection of the problems faced by IPPs as a whole. The supply gap seen in the boiler segment in the recent past with Indian companies opting to import boilers from Chinese manufactures is the reason behind the company entering the boiler manufacturing segment. Though the company primarily will target the domestic market, going forward it will also target the international market.
“The BGR boiler plant which is under construction in Chennai is expected to be completed in the next 4 years. This is a JV between BGR and Hitachi. The first order we received is from NTPC for 4 x 660 Mw boilers,” he added.
It is believed that the company has invested close to Rs 4,000 crore to set up the boiler plant and another Rs 2,000 crore in the turbine segment. The financing for the same has already been done.
More and more indigenous boiler manufacturing is considered as a positive move, as the country has very aggressive capacity addition plans. In the current five year plan, the country will be adding close to 55,000 Mw and in the 12th plan, India is looking at adding 1,00,000 Mw.
ANUP SHAH
Adroitt Flow Control
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