Balance of Plants : Bridging the Gap between Electricity Demand and Supply in India

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By Mayank Agrawal
Director ( M & C), Press Information Bureau, New Delhi.

New Delhi, July 22, 2011 (Washington Bangla Radio) On the path of a fundamental transformation with the main objective of providing reliable electricity to all households at reasonable rates, Power Sector in India has witnessed a major thrust in power generation in the last 4-5 years. However, in spite of manifold increase in generation capacity, the country is facing a peaking power shortage though the power generation is showing increasing trend. In the beginning of 11th Plan, peaking shortage was 13 per cent and energy shortage was 10 per cent and it has come down to 10 per cent and 7.5 per cent as on 31.3.2011. In order to bridge the existing gap between demand and supply and to meet the rapidly growing future requirements, there is a need to increase the installed capacity in the country. Fuelling this growth is going to be an enormous task.

One of the most crucial and important aspects in the production of electricity is the timely availability of requisite Balance of Plant systems for the various Power Plants under implementation.

What is Balance of Plants System

Balance of Plants (BoPs) such as Coal Handling Plant, Ash Handling Plant, Water Treatment/DM Plant, Cooling Tower, CW System, Chimney etc. have been identified as critical items for timely commissioning of thermal power project. BoPs have been and continue to be a critical area for achieving capacity addition targets. One of the reasons for the gap between the demand and supply of electricity is delay in execution of Balance of Plant (BoP) jobs which is primarily due to absence of competent BOP players who can execute the job within stipulated time and cost.

The market size of the BoP segment is over Rs. 900 billion. While the demand for BoP systems has been increasing, supply has failed to catch up. The segment continues to operate with a limited capacity. The limited capacity of contractors, suppliers and vendors often leads to delays in the commissioning of power projects. A gap also exists between availability & requirement of qualified BoP vendors and their implementation capacity.

Measures to Improve BoP system

The committee constituted in 2008 for development of vendors for Balance of Plant under the Chairmanship of Member (Energy), Planning Commission with Chairperson, CEA and Member Secretary, National Manufacturing Competitiveness Council’s (NMCC) members has given the following recommendations:

·    Orders for BoPs (or Engineering, Procurement and Construction (EPC) of BoPs) should be placed within six months of placement of order for main plant and equipment.

·    Liquidated Damages for Delays in execution of project in time should be enhanced to discourage cornering of large number of contracts by a few suppliers.

·    CEA to finalize revised pre-qualification requirement for BoP vendors by February 2008 end. (It has been done and put on CEA

·    CEA and NTPC to complete the exercise for finalizing the guidelines for standardization/broad design criterion for various packages of BoP progressively by the end of August 2008. (It has been done)

·    Capacity building for availability of skilled manpower to be taken up by the project developers.

·    Whether a level playing field is being provided to domestic supplier needs to be examined.

The Central Electricity Authority, CEA have already prepared the guidelines for standardization/broad design criterion for various packages of BoPs after taking into consideration views of utilities, BoP manufacturers, consultants & EPC contractors. The pre-qualifying requirements for BoPs have also been reviewed and modified. As a result of the above few new vendors/EPC contractors have emerged and capacity enhanced by existing vendors and also few new joint ventures (NBPL) have been formed between NTPC and BHEL to provide BoP system as well.

A committee has also been constituted to look into the aspects of liquidated damages for delay in supply/execution.

Learning From the Past

The capacity addition during the 11th Plan so far has been about 38,000 MW. The achievement is a result of the impetus accorded to capacity addition at the beginning of the 11th Plan. The actual capacity addition during the 10th Plan was 21,180 MW against the target of 41,000 MW. Therefore, at the end of 10th Plan, an analysis was carried out to assess various factors responsible for the slippage with a view to take remedial actions during the 11th Plan. It was noted that about 11,000 MW capacity slipped from the 10th Plan due to causes attributable to equipment suppliers including BoP and contractors. This paved the way for urgent steps for augmentation of manufacturing capacity of Main Plant and Balance of Plant manufacturers, major ones being coal handling plants, water treatment plants, cooling water system etc.

There is, however, a huge capacity addition programme envisaged for 12th Plan and beyond. CEA is monitoring the projects which are under construction, out of which a capacity of about 67,000 MW is expected from coal based plants during the 12th Plan. Most of the BoP orders have already been placed for these projects.

Challanges Ahead

·    Even though the manufacturing capacity of Main Plant has been substantially increased, a number of projects are still getting delayed due to constraints in timely availability of Balance of Plant systems and inadequate number of erection and commissioning agencies and construction equipment.

·    It has been observed that orders for BoP are getting bunched with few vendors. It is felt that in order to expedite BoP work in  the country there is a need to develop additional players in the Indian market to adequately meet the future requirement and also to provide competition, generate employment and reduce cost.

·    The Construction Industry in India has grown significantly and has acquired adequate experience in the field of construction and infrastructure projects. However, several concrete measures need to be taken to improve the present construction technology and enhance construction capabilities in terms of manpower and equipment. Engineers, Supervisors and skilled and unskilled workers need to be trained in the latest techniques and use of sophisticated equipment for construction, operation as well as O & M of power stations, transmission and distribution system.

Power Ministry had recently organised a National Conclave on Balance of Plants to deliberate on the  existing  issues and challenges ahead.  Addressing the delegates the Power Minister Shri Sushil Kumar Shinde called for not only the development of the vendor base but also for the development and deployment of new and better technologies. Indeed the mission of Power for All would be achieved only if all the players in the sector collectively gear up to face the challenges.

- PIB Features

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