Transmission works to boost capital goods cos' order book

Capital goods sector companies are expecting an uptick in orders in power transmission sector with planned expansion and upgrade to the transmission network. While the overall order intake and sales of capital goods companies have remained weak in the March quarter, companies are seeing prospects in transmission and distribution projects. The bulk of new orders are expected from Power Grid Corporation, which has as an annual project capex of over Rs 20,000 crore but even state utilities are expected to begin spending on intra-state transmission projects. Also development of green energy corridors is expected to provide work opportunities for the sector.

"While the state electricity boards and transmission companies have not been able to match the inter-state capacity addition due to financial constraints off late state utilities have begun placing orders. State electricity boards' (SEB) capex is expected to match that of Power Grid," said Vimal Kejriwal, managing director, KEC International. "We are witnessing a change in the way SEBs are spending especially in Tamil Nadu, Karnataka, West Bengal, Bihar, Orissa and now even Maharashtra. There is significant traction in the way SEBs are ordering; we are seeing large orders coming from SEBs," Kejriwal added.

In FY 2016 Power Grid has issued project tenders of Rs 27,000 crore for laying of HVDC lines and transmission sub stations, its chairman RN Nayak said on Saturday. It has also improved project execution and is considering underground cabling for a transmission project in Kerala. In addition, it has begun implementation of phase 1 of green energy corridor and transmission system for a solar power in Andhra Pradesh.

While currently the focus is on setting up of dedicated transmission lines as a part of green energy corridor, capital goods companies say inter-grid connections will have to be developed alongside. "ABB pioneered high voltage direct current 60 years ago. This technology plays a substantial role worldwide in connecting remote renewable power sources to the main grid," said a company spokesperson.

"There are opportunities for transmission substations in Rajasthan, Himachal Pradesh and Gujarat, followed by Tamil Nadu, Gujarat, Andhra Pradesh," the ABB spokesperson added.