For global technology major GE Power, India remains a key market. In an interview with Power Line, Michael Keroulle, chief commercial officer, steam power systems, GE Power, talks about the company’s outlook on the country’s changing power sector, the issues and challenges, and its future strategies for the market. Excerpts…
As per the draft National Electricity Plan, no coal power plants would be required after 2025. What is GE’s view on this?
GE’s operations are fuel-agnostic. The company is active in power production from all types of fuels, be it thermal, gas, nuclear or renewable energy (mostly wind with some solar). We have responded to the draft plan with some facts, which in our view were either overlooked by the Central Electricity Authority (CEA) or were not fully considered. One of the major aspects is the obsolescence of the ageing fleet, which includes coal plants that have been operational for more than 25 years and some even over 40 years. Although the CEA has said that only 5 GW of coal plants would be retired, we feel the actual retiring capacity would be much larger. Independent agencies estimate the retiring capacity as 60 GW. Also, ageing plants do not make economic sense as the operating cost is very high and the efficiencies are as low as 25-28 per cent. According to the draft plan, a large capacity of solar power is expected to come online in the next five years. However, considering the amount of land required for solar installations and the issues involved, we expect that the capacity in the draft plan would have to be reduced to a certain extent.
The demand projections in the plan are understated. India’s per capita consumption of electricity is quite low, about a fourth of that of China and 15 times less than that of Western countries; and if the draft plan is built on the same estimates, the capacity required will surpass projections over time.
How can the flexibilisation of existing coal-based power plants be increased to accommodate power from renewable energy sources?
We have positioned ourselves as a provider of high efficiency, low emission and high flexibility solutions. We have developed and commercialised technologies across the world that can improve the emission profiles of existing coal-based power plants or replace the existing base with new technology. We hold the world record for efficiency of subcritical plants at 47.5 per cent, which is usually 27-28 per cent. That can be done for all units that will be replaced and we can significantly improve the carbon footprint and the economics of power generation.
How would the new emission norms affect cost dynamics for existing and upcoming plants?
When talking about emissions, it is not just about the carbon matter, it is about dust and particulate matter as well, and SOx, NOx among others. GE is the world leader in incremental control solutions and we have installed more than a third of the equipment worldwide (except for China). In terms of cost increment, we think that the capex for all emissions would be less than Rs 90 million per MW. The costs will decrease further if there are larger volumes of order.
How has the coal sector performed globally?
Generally, the demand for new coal plants has decreased, especially in China. That said, markets such as India, Southeast Asia, the Middle East and Africa have witnessed a slight increase. The other aspect is the retrofitting of existing units, which adds to the plant life. Globally, we see a significant market going forward, except for China. The business is now being driven by lower emissions, higher efficiency and more flexibility, which has put us in a good position in the market.
What are the issues and challenges being faced by companies in the Indian market?
This is a very competitive market, which brings several challenges and opportunities. On the one hand, we have to be competitive and work hard on our cost base, on the other, this is also an opportunity as we can learn from cost optimisation and apply it to the rest of the market. Also, it is a challenge to get the optimum value for our offerings in India. So, if we want to bring in advanced ultra supercritical technology today, customers will not evaluate it on the basis of merit but against the prescriptions available.
What are GE’s future plans in India?
GE has invested significantly in the country. We have three factories, one of which is in Durgapur, West Bengal, where we manufacture boilers. We have invested in significant capex in the past few years to modernise the plant. We have a factory in Karnataka where we manufacture some boiler parts. As part of a joint venture with Bharat Forge, we have also invested in a new factory in Sanand, Gujarat, for manufacturing steam turbines and generators. The factory is now in full operation. We do not feel there is a need to increase the manufacturing capacity. However, we will continue to invest in building engineering competency.