Thermax Ltd to renew focus on power projects in FY25: CEO Ashish Bhandari

thermal power

With the Indian government strengthening its stand on adding more coal-fired capacity to meet the country's burgeoning electricity demand, engineering company Thermax Ltd is now actively looking at projects in the thermal power sector.

This is significant because in Q1FY24, the company had stated that it will gradually reduce its focus on coal-fired capacity as it aims to add 1 gigawatt (GW) of hybrid renewable energy in solutions by FY27.

When asked about the shift in the company's strategy, Ashish Bhandari, MD and CEO of Thermax Ltd said the inquiry pipeline for thermal power projects has witnessed a sharp increase now.

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"The power sector has emerged back again in a big way in the past three months or so. In general, across industries, coal is now becoming a big discussion point again, fuelled by India's growing power needs. Hence, the inquiry pipeline overall relating to thermal, both utility side and for captive projects has gone up. Perhaps more than even the refining and petrochemical pipeline that we had 1.5 years ago," Bhandari said in an interaction with investors and analysts post the company's Q3FY24 results.

The government has announced that it plans to add 80-87 GW of coal-fired capacity by 2030 to meet the country's electricity demand which is likely to cross 350 GW in 2030-31. Apart from the thermal capacity addition plan, the government has already pledged to add 500 GW of non-fossil sourced power generation capacity by 2030, work for which is simultaneously going on.

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Thermax Ltd was previously not interested in doing large engineering, procurement, and construction (EPC) projects since historically the company hasn't made money on an L1 basis in an extremely
competitive scenario. But now, Thermax is open to big thermal power projects as well, provided they are structured right and are accretive.

Bhandari said the company could be bidding for some of the upcoming thermal power projects in FY25. He added that discussions are currently going on about how coal-fired power generation capacities can be added in a sustainable manner, in a way which makes commercial sense as well.

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"But we also want to be sure that none of this should slow down the path that we are on such as waste-to-energy. So in the back end, there is work going on at understanding how can we de-bottleneck our factories to increase capacity? How do we get engineering capability as needed?." he said.

As per the company's website, Thermax is a pioneer in setting up captive power plants on EPC basis. Its installed base of captive power plant is more than 3,300 MW spread over 125 projects.