Domestic equipment policy only for transmission and distribution projects, clarifies CEA

In what would clear the air for coal-based power developers, the technical arm of the power ministry, Central Electricity Authority (CEA), has clarified that its advisory for use of domestically manufactured equipment for government-funded power projects is limited to transmission and distribution equipment and does not cover generation machinery.

The ambiguity in the notice had put several power developers in a bind. They argued that the country lacked capacity to meet the domestic demand for generation equipment. The coal-based capacity in the country has grown by an annual 20 gigawatt over the past 4 years. This is not matched by the domestic boiler, turbine, generator (BTG) makers, with the largest company, state-run BHEL, has struggled in maintaining delivery schedules. BHEL has an annual capacity of about 20 GW.

The authority issued a correction to its earlier advisory released in May which exhorted state-run agencies, both transmission and distribution utilities, to use equipment from local manufacturers citing under-utilisation of such capacity that had invested heavily in expanding capacity and developing indigenous technology.

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