Monday, May 4, 2015

The Backup Plan: What Fuels the Temporary Power Plant Market in India

India is facing an acute power shortage due to the observed inability of dated and inefficient power infrastructure to support the growing energy demand of the public, as well as of the industries. In fact, according to a recent report by the Central Electricity Authority, India loses about INR 414,800 crore of its GDP due to electricity shortage. The northern states of Delhi, Haryana, Uttar Pradesh, Himchal Pradesh and Uttarakhand were said to be the worst affected with a deficit of 7.1% or 2,912 MW. On the other hand, the northeastern region of Assam, Manipur, Meghalaya, Arunchal Pradesh, Tripura, Nagaland and Mizoram were said to have recorded a deficit of 5.9%.

Expanding economy

These conditions set a backdrop for better prospects for the temporary power industry in India. While still in its nascent stages, the rental power market in India has an encouraging outlook, with the coming years expected to see a bullish rise in the country’s GDP. When economies are growing, industrial and commercial activities tend to become energy-intensive. While the power infrastructure in India is being refurbished or enhanced, commercial and industrial entities will likely be more inclined to hire the services of rental power providers than lose production during maintenance, expansion or shutdown of permanent power facilities. Utility companies, in addition, turn to rental power options when demand for electricity spikes during summer months, or when electrification fails in times of natural calamities.

According to industry experts, however, rental power plants will find most opportunities in the Indian construction sector. The expected increase in infrastructure projects in India will necessitate economical, uninterrupted and reliable power wherever and whenever needed. Due to the observed inability of existing power infrastructure to support the present demand, let alone the additional requirement in the future, many construction sites will require standby power generation equipment to run round-the-clock without interruption.

The frenetic pace of construction will also entail power sources that can be swiftly delivered, rapidly installed and easily operated anywhere in India; and this is where rental power plants are most advantageous. Because they are containerized and relatively compact compared to permanent power infrastructure, temporary power stations can be shipped from and to any place on the planet, not barring remote areas where no one has ever been. They also have a plug-and-play configuration that makes them easy to install, connect and power on in a matter of days. They are equipped with the latest power technologies that allow them to be directly connected to the grid without the need for a substation, and to vary the electricity output depending on the precise need of the location.

Aside from utility and construction, rental power plants also find application in mining, oil & gas, shipping, telecom, events and emergency response.

Stringent environmental regulations

Another driver that is fuelling the development of the temporary power technology in India is the new Central Pollution Control Board (CPCB) II norms, which aims to reduce pollution in the entire country. Being an omnibus regulation, the norm will require different industries, temporary power equipment providers included, to comply with the cleaner emission standards. Observed to be even more stringent than its European counterpart, the CPCB II norms are welcomed by the industry, as it believes that it represents a step towards the development of rental power units that are not only efficient and viable, but also environmentally friendly.

The temporary power industry in India considers the move towards environmental stewardship beneficial not only to the manufacturers, but most certainly to the consumers. Proactive rental power companies have already introduced Earth-friendly generators, like those running or gas or dual-fuel, in most of their projects. Mobile power plants running on gas meets most worldwide emission requirements at 250mg/Nm3 of NOx level, even without after-treatment. On the other hand, equipment that runs on dual-fuel utilizes dynamic a gas-blending technology, and is equipped with specialized gas-treatment plants.

Powering India’s future

Though still gaining traction in the country, the Indian rental power market holds promise. The improvement in the country’s infrastructure, as well as the intensive activities of other industries, bodes well for the temporary power industry. Prospective customers in the country are also becoming more mature, and are gradually understanding the advantages of hiring rental power providers as opposed to not having power and letting go of production, profit or opportunities. Additionally, policy changes in India, like the CPCB II norms set up an environment conducive to the technological development of temporary power equipment, making them more suitable for a wider range of applications and appealing to a greater number of consumers.

*The article was originally published on the official website of Energetica India,*


Robert Bagatsing
Altaaqa Global
Tel: +971 56 1749505

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