NEW DELHI: India has decided to shut the door on power equipment imports from countries like China, which feature in its Prior Reference Category (PRC) list.
While supporting the move, industry executives also warn that it will lead to delays in complying with emission-reduction norms. Over three-quarters of India's thermal power plants (TPP) are likely to miss the December 31, 2020, deadline, since most emission-reducing gear is sourced from China, the Association of Power Producers observed.
India's power sector has been dependent on its northern neighbour for a large variety of equipment so far, especially in the solar and emissions-control segments. According to Power Minister RK Singh, India imported nearly Rs 71,000 crore worth of power sector equipment in fiscal year 2018-19, of which China alone contributed Rs 21,000 crore.
"This is something we cannot tolerate... (from) a country (that) transgressing into our territory.... we will not take anything from China and Pakistan," Singh said while speaking at a virtual conference with state power ministers on Friday.
"We will not give permission for imports from Prior Reference Countries," he added.
The PRC list currently comprises several countries from which threats to Indian interests may originate, such as China, Pakistan, Iraq, Afghanistan, and Sudan.
Singh also asked his state-level counterparts to stop any procurement orders from China for power distribution companies under their control. A constant concern with such imported equipment -- highly advanced electronics goods, in particular -- is that they may contain software which could be weaponised by enemy actors.
"There could be malware or trojan horse in those... which they can activate remotely," Singh warned.
Orders passed
The Ministry of Power has already passed relevant orders to ensure that roadblocks to such imports are in place. In an order dated July 2, the ministry made the import of equipment from PRC countries will "require prior permission of the Government of lndia".
Even if such imports are allowed in special cases, officials say, the order also mandates that all such gear will be tested in India to weed out any embedded cyber threats. "The protocol for testing in certified and designated laboratories shall be approved by the Ministry of Power," it added.
Since the power supply network is "sensitive and critical infrastructure", officials said the ministry has decided to weed out vulnerabilities which mainly arise from "possibilities of cyberattacks" through embedded malware.
The Finance Ministry had, last week, also raised import barriers in the solar segment by imposing a new basics customs duty on solar modules and panels.
Industry seeks more time for emission reduction
Apex industry body Association of Power Producers (APP), while hailing the move, is seeking an extension in deadlines for compliance with emissions norms.
All Thermal power plants (TPP) are mandated to upgrade their emissions controls systems with flue gas de-sulphurisation (FGD) units and electrostatic precipitators (ESP) before December 31, 2022. As per the phase plan, 37.61 GW of TPP capacity should have installed FGDs by December 2020, of which 1.7 GW have managed to do so so far. The Covid-19 pandemic has also thrown a spanner in the works.
In a letter to power minister Singh, APP director-general Ashok Khurana wrote that the ban on using Chinese equipment will impact the installation of pollution-control devices in power plants. Industry executives say that only about 20-30 per cent of such components are made locally, with 70-80 per cent imported from China.
At present, a large majority of TPPs haven’t even awarded tenders for these works yet, APP noted.
"It is evident that as many as 77% of the total TPP units for whom FGD is planned... have not yet awarded the EPC contracts. These are highly likely to miss their timelines... Around 36 GW of TPPs will miss their target deadline of December 31, 2020, thereby further loading the already strained FGD supply chain," Khurana wrote.
The APP is consequently seeking an extension of the timelines for compliance. 'A push back by 2-3 years would provide an excellent opportunity for implementing... 'Atmanirbhar Bharat' by opening a manufacturing order book of Rs 48,000 crore for the domestic industry," he said, since tenders have still not been awarded for capacity worth 120.72 GW.
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