Old thermal power plants offer new business opportunity

Old thermal power plants offer new business opportunity

India’s ageing thermal power plants could mean good times for companies in the dismantling business. About half of the country’s thermal power plants—which collectively account for almost 30% of total installed capacity—are over 25 years old, and a large number of them are fast approaching 40, which is considered the end of their useful life span. Beyond this they will necessarily need to be scrapped, opening up a market for effective disposal of these plants.

“In fact, 188 thermal power plants out of a total 396 are more than 25 years old. They have a total installed capacity of about 56 GW, out of a total installed capacity of 188 GW. A large number of these plants would be scrapped,” said Ashok Khurana, director general of the Association of Power Producers.

According to experts, generation capabilities of a thermal power plant reduce by about 40% after surpassing the operational age of 25 years. Requirement of coal also keeps increasing, thereby calling for de-rating of such plants.

“All these 25-year-old plants were built with technology that took care of pollution norms prevalent at that time. However, norms have turned stricter and these old plants need to spend more on adhering to norms. If they undertake renovation and modernization, tariffs also increase, as the additional costs need to be passed on,” the executive said.

The need for shuttering old plants has opened up a large market for decommissioning and effective disposal, similar to the ship-breaking industry. Companies like mjunction and MSTC have stepped in to grab a chunk of this market.

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“The service requires onsite inspection, inventorying, segregation and estimation. All of which culminate into an online sale to qualified and credible buyers which fetches the optimum price for the power plant,” an executive of mjunction said.

Vinaya Varma, mjunction’s CEO, said, “Our focus is on transparency and price discovery of such assets, which are not only economically unviable but also a hazard for the environment.” Read more


One Response to "Old thermal power plants offer new business opportunity"

  1. Ishan Shankar   March 18, 2017 at 11:22 am

    On the subject of replacement of old power station my views are.
    To take up this ahead a strong engineering study & base is essential with the Department of Power, generators, equipment suppliers from the startitself. Residual life assessment (RLA), Life Extension studies are to be done before taking up the R&M including replacement by new plants.
    For this it would be worthwhile to associate experienced experts as consultants for the studies. This would be much economical, utilization of a pool of experts and not loading the engineering resources of manufacturers.
    Having floated this alternative it’s essential that a study group be consituted and the group should go in for a strong brain storming process and drawing a comprehensive plan. I would like to caution that consultants should be such who have ground knowledge of power Sector instead of big names. The representatives of big names consulting companies may be member of the study group/sub groups using their expertises in their specialisation areas. The time lines and milestones. I am sure this initiative will be successful if learnings from past is used.
    Ishan Shankar
    Chairman Enginuity Advisors
    Ex Chairman Committee of Directors BHEL
    Ex Director UPCL


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