GE Power India Ltd (GEPIL), in a stock exchange communication, has reiterated its commitment to the flue-gas desulphurization (FGD) business in India, even as parent company GE has announced that it would exit the new coal business.
GEPIL has clarified that while GEPIL’s promoter, General Electric Company (GE), has announced its intention to pursue an exit from the new build coal power market globally, GE has acknowledged to GEPIL that there continues to remain a demand for FGD systems in India. GEPIL intends to continue pursuing business opportunities in this segment.
In GEPIL’s view, the total FGD market (including captive power plant) in India is 225 GW, out of which around 82 GW (with order value estimated at Rs.33,000 crore) has been already been ordered till date mainly by Central public sector utilities but also including a few state utilities and IPPs.
GEPIL has till date been awarded 10 FGD projects amounting to around 13 GW, representing approximately 15 per cent market share, which are now in various stages of execution.
The balance potential market for FGD in India which remains to be ordered in the next 3 to 5 years is estimated to be around 143 GW. This potential has discussed under the two following groups:
IPP and CPP (potential: 66 GW)
Out of this 143 GW, around 66 GW (estimated order value: Rs.29,000 crore) consists of potential IPP and captive power plant customers. GEPIL said that it has the capability to pursue these opportunities independently, on the basis of its existing technology license agreement for FGD with GE and its own execution capabilities, without any further support from GE.
GEPIL, it may be noted, has been granted a license to use GE’s FGD technology in India, and GE has confirmed to GEPIL that this license continues to remain available to GEPIL. GEPIL also has the engineering capability to execute the FGD projects locally. GEPIL will focus on FGD deals which are accretive from a cash and margin perspective while striving to maintain its market share wherein GEPIL has a competitive position.
Power utilities (potential: 77 GW)
For the remaining potential market consisting of around 77 GW represented by Central and State Government customers, GEPIL continues to evaluate options to enable GEPIL to address this segment without any support from GE. GEPIL is also in discussions with GE to acquire independent capabilities to bid for opportunities in the FGD segment for Central and State Government customers.
Featured photograph (source: GE) shows an FGD installation by GE Power India at one of NTPC’s coal-fired power stations.
