After spending two years in getting
clearances, Shanghai Electric
Power Generation Group,
popularly known as Shanghai Electric
Company (SEC), has set up its office in
India. This makes SEC a step closer to
setting up manufacturing operations in
India. Shanghai Electric India Ltd, the
official name of the SEC's Indian outfit,
was formally launched on March 7.
SEC has been a leading supplier of
main plant power equipment (boilers
and turbine-generators) to India. It is
estimated that SEC is involved in
supplying to 12 power plants with an
aggregate capacity of 20,000 mw—a
business volume of around Rs.1 trillion.
Shanghai Electric received a major
boost in India when it concluded an
agreement with Reliance (ADAG)
Group for the supply of 36
supercritical power generation sets of
660-mw, worth a staggering $8.3
billion. Signed in October 2010, the
deal is amongst the highest-valued in
the power sector globally.
While Reliance (ADAG) has been a big
patron of SEC equipment, other private
utilities like JSW Energy and CESC have
also placed orders on the Chinese
equipment manufacturer. SEC
equipment is being deployed at JSW
Energy's 4x300-mw Jaigad power
project in Ratnagiri district,
Maharashtra. CESC, part of the RPSanjiv
Goenka Group, also signed a cooperation
agreement with SEC in
September last year. The agreement
envisages CESC bidding for ultra mega
power projects along with its Chinese
partner. Earlier that year, CESC placed
orders for power equipment worth
1,200 mw for its upcoming projects in
Maharashtra and West Bengal.
While SEC is now learnt to be
preparing ground for setting up a
manufacturing facility, there is also a
tie-up with Alstom that would come
into play. In April 2011, Alstom and SEC
joined forces globally to form a 50:50
joint venture for the production of
thermal power plant boilers. The
collaboration will also extend to India
and the proposed manufacturing
facility of SEC might have Alstom's
equity involvement, it is learnt.
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SEC has been a supplier of choice to
Reliance Power. According to
information available, SEC is supplying
equipment aggregating 13,080 mw to
the Anil Ambani Group company. This
largely includes supercritical
equipment. The projects that would see
the deployment of SEC equipment
include Rosa-II (600 mw), Butibori
(600 mw), Sasan and Krishnapatnam
UMPP (each of 3,960 mw) and
Chitrangi (3,960 mw). Besides, SEC
has already supplied equipment for the
operational 600-mw Rosa-I project in
Uttar Pradesh. Reliance Power intends
to source equipment for the 3,960-mw
Tilaiya UMPP as well from SEC.
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Going by its current plans, Shanghai
Electric would become the first Chinese
equipment manufacturer of power
plant equipment to set up shop in India.
It will now compete with traditional
supplier BHEL and the several other
domestic suppliers, in the capacity of a
local company. Indian suppliers of
power equipment have had a longstanding
grouse against imported
Chinese equipment that worked out at
least 20 per cent cheaper that domestic
equipment. Industry associations had
demanded an import duty on Chinese
equipment—a proposal that did not
find favour with power producers that
had placed orders on Chinese suppliers.
The Indian government at that stage did
not want to impose duties as much of
India's power generation capacity
addition for the XI Plan (2007-12) was
dependent on Chinese equipment.