Insights@Intelsense: Draft National Electricity Plan, September 2022

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Insights@Intelsense

The Draft National Electricity Plan, September 2022 offers great insight into the Power Sector. Here we do a deep dive into some of the critical portions from the standpoint of infrastructural development and opportunities that may open up in this space. The plan envisages achieving a capacity addition of nearly 50% of the already existing installed base.

The total installed capacity for our country has grown at a rate of ~7.84% CAGR since independence.

The growth of installed capacity and energy generation has seen some tapering off compare to other historical 5 years periods and is expected to gain momentum from here.

Major reforms were undertaken in the Distribution Sector along with liquidity infusion during COVID -19.

The plan forecasts Region wise Energy requirement for the next decade.

The need for Inter-regional transmission capacity is stressed and also considered in the plan.

The estimated fund requirement for the capacity addition is a massive 14.35 lakh crore over the next 5 years.

The fund requirement to complete these projects is expected to provide growth opportunities for the Banking Sector at large.

The planned capex will open up requirements for the entire supply chain. Boiler, Turbine &Generator (BTG) form a major part of the thermal power plant. This is expected to benefit BHEL the largest player with L&T, Thermax & others.

Another very important part is emission control equipment like FGD - Flue Gas Desulphurisation and SCR - Selective Catalytic Reduction.

BHEL is already doing large FGD orders and working for SCR also.

The construction machinery requirement for a 660 MW set is outlined in the plan.

The plan mentions need of civil contractors to execute Hydro projects.

Wind Power plants execution can be achieved but focus on building quality turbines will be essential.

The plan stresses the need for developing indigenous sources for critical items.

The key material requirement is expected to provide major demand boost to Core Sector such as Cement & Steel. Major Cement demand coming from Hydro plants and for Steel from Wind projects.

Castings, Forgings, Tubes, Turbines and Generators requirement for Thermal Power Stations.

An FGD system alone will require huge amounts of Material for construction.

Limestone requirement for FGD is also expected to be massive.

Land Requirement in terms of Acre/MW was estimated.

Emission norms highlight the importance of FGD

The investments, if they fructify, could be a significant game-changer in the infrastructure space in India.