New Delhi: Two government officials stated that India has requested power companies to buy equipment totaling $33 billion this year to accelerate the expansion of coal-fired power capacities in the future, due to the country's challenges in meeting increasing electricity demand.
Sources said the government's unusual decision would lead to a surge in equipment bidding by leading power companies like NTPC, SJVN, Adani Power, and Essar Power. This move is expected to contribute 31 gigawatts (GW) in the coming 5-6 years. Typically, companies are responsible for determining the timing of tendering instead of the government.
Sources said that Power Minister Manohar Lal discussed speeding up equipment orders for new coal-fired plants at a meeting held shortly after Prime Minister Narendra Modi's federal cabinet was formed early last month. The goals are ambitious as the country has previously purchased equipment for approximately 2-3 GW capacity per year, except for the 10 GW ordered last year.
India is hurrying to build new coal-fired power plants because it is struggling to keep up with the high electricity demand during non-solar hours. After the pandemic, the country experienced record-high power demand due to rapid economic growth and more frequent heatwaves compared to other large economies.
India experienced its largest power deficit in 14 years in June, prompting urgent measures to prevent nighttime blackouts by postponing scheduled plant maintenance and requiring companies to operate plants using imported coal and electricity through an emergency clause.
According to sources, BHEL, the government-owned company which won all power equipment contracts in recent auctions, is expected to secure the majority of contracts for the new equipment.
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