India asks utilities to order $33 billion in equipment this year to boost coal power output, Reuters reports citing sources

India has asked power companies to order equipment worth $33 billion this year to fast track capacity additions of coal-fired power in the years ahead, as the South Asian nation struggles to meet booming electricity demand, two government officials said.

The unprecedented move by the government, which would result in record tendering in a year for the equipment by major power firms such as state-run NTPC and SJVN as well as by private companies Adani Power and Essar Power, will help add 31 gigawatts (GW) in the next 5-6 years, the sources said.

Normally, the government leaves the tendering timing to the companies themselves.

Expediting equipment orders for new coal-fired plants was discussed at a meeting held by Power Minister Manohar Lal, soon after the formation of Prime Minister Narendra Modi's federal cabinet early last month, the sources said.

The targets are ambitious given the country has ordered equipment for about 2-3 GW capacity annually in prior years, barring last year's orders for 10 GW.

India is rushing to add fresh coal-fired plants as it is barely able to meet high power demand with the existing fleet in non-solar hours.

Post pandemic, the country's power demand scaled new records on the back of the fastest rate of economic growth among major economies and increased instances of heatwaves.

India saw its biggest power shortfall in 14 years in June, and had to race to avoid night time outages by deferring planned plant maintenance, and invoking an emergency clause to mandate companies to run plants based on imported coal and power.

State-run Bharat Heavy Electricals Ltd (BHEL), which bagged all power equipment contracts in auctions in the last year, is likely to get most of the contracts for the new equipment,