Reports say that Indian imports of power equipment from China have hugely shot up and risen to 45% of the market in 2012-13, up from just about 15% in 2005-06.
Now, there are gains from trade, and the power producers can be seen as duly taking advantage of attractive prices and prompt delivery schedules of Chinese power gear.
However, a recent study by the Central Electricity Authority (CEA) has reportedly reiterated, again, that Chinese equipment already installed routinely underperforms on all key parameters, compared to those designed and built domestically. The need is to design incentives to factor in lifetime rather than initial costs.
When it comes to operating ratios, heat rate, auxiliary consumption, forced outages, etc, the imported power systems have been deficient. We need to address the real risks of malfunction and compromised safety at the Chinese-equipment plants.
It is possible that the imported power systems have not been designed to accommodate the various peculiarities of Indian coal and operating conditions. It surely makes a cast-iron case for Chinese equipment makers to mandatorily set up facilities here in India to design, build and maintain power systems.
In any case, about 25,000 MW of installed generation capacity, which is a considerable chunk of the total nationally, is already based on imported Chinese equipment like boilers and turbines, and to service and maintain the systems, local presence ought to be imperative.
Domestic power producers can be encouraged to import equipment provided, of course, that the capital goods meet domestic operational standards in actual working conditions. In tandem, domestic power equipment makers need market access and a level playing field in China.
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