Power Today |
Advertise Here [728 W x 90 H pixels]
Cover Story | April 2011

What ails the balance of plant segment?

Most thermal power projects in the country are being hampered by lack of BoP vendors and inadequate manufacturing capacity that is not commensurate with the growing demands of the Indian power sector, says PK Chaubey.

The power sector in India has witnessed a major thrust in power generation in the last four to five years with a few success stories in its fold. However, the road ahead is dotted with innumerable challenges resulting from gaps between what’s planned versus what the power sector has been able to deliver. One of the reasons for the gaps is delay in execution of Balance of Plant (BoP) jobs which in turn is primarily due to absence of sufficient and competent BoP players who can execute the job within the stipulated time and cost.

Plant systems and equipment can be classified into: 1) Main plant comprising of steam generator, steam turbine and boiler along with their associated auxilliaries and 2) Balance of plants systems include all equipment other than those included in the main plant system. Major components of the BoP system include coal-handling plant, ash-handling plant, cooling towers, water treatment, circulating water system, fuel oil handling and unloading system and fire protection, transformer substations, detection and alarm systems and commissioning of extra high voltage (EHV) systems. The BoP system comprises all the systems and utilities which are required to run thermal power plants starting from raw material input to waste output apart from the power island which includes the boiler, turbine and generator (BTG) with its auxilliaries.

In a nuclear plant, balance of plant refers to that part of the plant which is used for power generation as opposed to the nuclear reactors and equipment in this category includes high pressure turbines, motors and pumps, main generators, transformers, waste-heat boilers, etc, ie, equipment with mechanical, electrical, instrumentation and control and civil components.

In recent times, most thermal power projects in the country are being hampered by lack of BoP vendors and inadequate manufacturing capacity that is not commensurate with the growing demands of the Indian power sector.

Though the need for commensurate manufacturing capability of the main plant and balance of plant equipment with the required capacity addition was realised long ago, remarkable success was not achieved in BoP due to lack of effort in developing more and more vendors in this space. Because of this, while orders for main plant equipment have already been placed for all the projects under the 11th Plan, there are still 89 orders pending pertaining to different categories of BoP as shown in the table.

At present, 15 thermal power units, worth a cumulative capacity of 3,963.20 MW, which were proposed for commissioning during the 11th Plan period, have been stalled due to lapses in equipment supply. These power plants include the Parichha extension project, Santaldih extension Phase-II, Pipavav combined cycle power plant, Bellary thermal power plant (TPP) Stage-II, Jallipa- Kapurdi TPP and Udupi TPP.

There has been due emphasis on growing the availability of main plant equipment in the country, however, BoP has never been perceived at par with the main plant due to the following reasons:

• Main plant equipment control plant performance
• Engineering for BoP has never been thought as a bottleneck in completion
• There is always a shorter lead time for BoP
• There is a tendency to save on industrial design and construction (IDC) on account of delayed ordering

Now the government has drawn up a very ambitious target of adding 100,000 MW during the 12th Plan which means adding two-thirds of the existing capacity in just five years. There is going to be a huge requirement for BoP equipment and contractors to meet the requirement as shown in the table below:

Therefore there is an imminent need to bridge the gap between the demand and supply of BoP contractors and equipment. To alleviate the supply shortage of equipment, two measures are being adopted—enhancement of domestic equipment manufacturing capability by establishing joint ventures between Indian and foreign suppliers and secondly by procuring equipment directly from international markets.

In both the cases, equipment sourcing needs to be managed effectively throughout the procurement cycle. For instance, it may be a challenge for new project-owners to select a reliable supplier, monitor its performance and ensure the quality of supply on a sustained basis. Also, the timelines for availability of additional domestic equipment supply has not been clearly defined.


1. BoP is not perceived to be at par with the main plant equipment: Normally BoP is not given proper attention as the BTG package and all the activities related to design, engineering, award, etc, start very late in the development work. Often it takes the engineering inputs from the main plant sizing, etc, and it is required that the BoP match the schedules of the main plant equipment.
2. That way BoP suppliers/integrators are often left with difficult opportunities commercially and focus shifts from optimisation to the cost control. Sometimes exclusions by BTG invariably become the BoP.
3. Lack of uniformity in qualification criteria: CEA guidelines has wide variation in the period of commercial operation of qualifying plant and also the net worth requirement of bidders has a wide variation because of its linkage with the paid-up equity capital.
4. Increased cost of project implementation: Too much time is taken for engineering approval of major equipment in the absence of standard specifications for a range of power plants and there are a limited number of BOP equipment manufacturers.
5. There are a few foreign design and engineering consultants who meet the legalities of qualification requirements (QR) as too much weightage is given to contracts executed in India and completion certificates issued in the name of the parent or holding firm.


1. Integrating the entire BoP as a single package—Moving towards EPC: There is a need to integrate the entire BoP as a single package to have the ease of execution, design and engineering, etc. There is an imminent need to minimise the gap between ordering the BTG and BoP packages and there should be proper rationalisation of the scope between BTG and BoP.
2. Offering the BoP supplier or integrator, fair and practical terms for execution: BoP contractors and integrators should be given practical terms  for the effective execution of work.
3. Encouraging BoP vendors who have knowledge of main plant equipment will be better for effective implementation and support should be given to develop a wide network of BoP integrators. A strong vendor base is indispensable to cater to the huge requirement that is likely to come up in the coming years.
4. Uniform qualification criteria for participation in BoP tenders should be adopted by all project owners as per Central Electricity Authority (CEA) guidelines and CEA should ensure their compliance. Also, the qualification criteria for appointment of the bidder’s design and engineering consultant needs to be streamlined and included in CEA guidelines. The threshold parameters for sub-vendor selection need suitable designing for a wider participation of manufacturers.


The BoP integrator should have the core capability and competency as a preferred, trusted and reliable partner to the client in the construction of large power plants in the domain of civil, mechanical and electrical works. Also, the preferred experience is start-to-end balance-of-plant equipment, materials and solutions such as coal and ash-handling systems, intake water, water treatment plants, cooling water systems, air-conditioning and ventilation systems, fire protection systems, cooling towers and civil works and services. They should have strong demonstrated capabilities in engineering that spans from the conceptualisation stage to feasibility studies, front-end design and complete detailed design and ably supported by in-house capabilities to provide engineering services in master planning, development, marketing and management. Also, their strict adherence to quality standards and timely supply of equipment and materials should be a consistent feature. They should be capable of delivering value added services to the power plant customers in terms of:

• Better price realisation for clients
• Simpler co-ordination requirement—single-point contact. Minimum staff should be required from the end-user organisations
• Minimum finance risk and firm cash flow for end-users
• Least interfacing related issues between sub-systems, thereby leading to faster commissioning
• Better control over equipment specifications
• Single-point solution for gencos for BOP
• Better control over project for clients or developers

The author is Client Sales Director at Accenture India and can be contacted at pkchaubey_iitk@yahoo.com. Views are personal.

Post your comment
Verification Code:   Change Image


Posted Comment
1 .     Yogesh Says:
17 Oct 2016
I wish to start pvc / pp electric wire unit in Delhi. What kind of information I can get if I subscribe for your magazine

2 .     Sarfaraj Bilakhiya Says:
20 Sep 2016
Pls invite me all auction in gujarat

3 .     k.natarajan Says:
20 Jun 2016
we are doing business developing for solar power ,thermal power , customer supporting and we have 45 mw splar power on hand needs investors..... thanks lot pls call +910842559230 +919842753550

Advertise Here [728 W x 90 H pixels]