Power Manufacturing; Government shows muscles

Recently I had written a blog article on how not only solar manufacturing companies but also conventional power manufacturers in India are lobbying to protect Indian manufacturing from imports.


The government, looks like, has taken note of the situation and has asked all state owned power generation utilities to source boilers and turbine-generators from companies that have a manufacturing base in India. This is valid for 2 years; till October 2015.

The  most prominent power equipment players today in the Indian market are the Chinese companies exporting to India.

But this step from the government will create more advantage for manufacturing companies in India; such as L&T-Mitsubishi, Toshiba-JSW, etc.

Ofcourse the private companies will be free to choose their vendors and suppliers.

Will the government be able to do something similar for India’s Solar Manufacturers? Can the government direct state-owned power generating companies to set up solar power plants using only Indian made modules?

Maybe this can also be extended to RPOs as well in terms of more credit if solar power is purchased from a solar plant using Indian made modules.

These ideas don’t seem far fetched now with it being implemented in India’s conventional power sector.

This can also help balance India’s growing current account deficit.

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2 Responses to Power Manufacturing; Government shows muscles

  1. Solar pioneer says:

    Great thought but there is infrastructure problems to solve first. First is that investors do not like uncertainty. When the government institutes possible anti dumping duties or imposed quotas for locally produced PV panels things freeze.
    Anti-dumping cases, local content requirements and cost-dominated tendering processes are limiting India’s solar energy growth, according to the latest quarterly report by the Mercom Capital Group. Mercom also warned that anti-dumping measures have “paralysed” the sector.
    Mercom estimates that 622MW of solar capacity has been installed in India in the last seven months but just 73MW of that has occurred in the past three months.
    “With the government desperately looking to attract foreign direct investments due to deteriorating economic conditions, India is sending the wrong message to investors with the anti-dumping case and domestic content rules,” said Raj Prabhu, CEO of Mercom. “Instead, they should provide long-term policy visibility and a growth roadmap.”
    “It is naïve to think that India can impose DCRs [domestic content rules] and anti-dumping tariffs without negative repercussions and at the same time look to increase exports to and attract investments from these same markets,” he added.
    This is not the only issue on locally sourced materials one has to look critically is these producers are capable and are actually producing locally made product. India, the cell manufacturing capacity grew from 150MW in 2009 to 700MW in 2012, while the module manufacturing capacity grew from 500MW in 2009 to 1,250MW in 2012. However, India has an overall wafer production of just 200MW. Indian manufacturers at the moment cannot produce modules without the import of wafers. This is one catch 22 the other is the capability to produce the next 750MW of PV in the next tender will fall far short from local suppliers. The fact that many are now idled, do not have the size or resources to produce the quality and volume to be marketable (of investment grade and fundable) or able to produce at a competitive price due to size of manufacturing lines. Only two listed PV manufactures presently show they are capable of producing little over 200MW in panels per year 210 & 280 respectively this compared to other foreign competition where 1,000 to 2,000MW production is the norm.


  2. Great analysis Solar Pioneer….can we know some more about you?

    Yes India is trying to attract foreign investment and that is why they need to make sure that foreign companies do initiate production in India for the domestic industry to sustain, jobs and help decrease current account deficit….these are reasons pushing government towards anti-dumping duties….


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