EPC Firms Boost Thermal Power Bets
Engineering, procurement, and construction (EPC) companies are seeing significant opportunities in India's thermal energy sector. This resurgence is fueled by projections that thermal power will remain the primary source for meeting the nation's escalating electricity needs. With coal-based thermal energy already accounting for three-fourths of the country's generation, this segment is poised to absorb additional load amid concerns over gas and hydro energy supplies.
Larsen & Toubro Targets Major Thermal Growth
Major players like Larsen & Toubro (L&T) are actively pursuing this opportunity. The conglomerate aims to add approximately 4-5 GW of thermal power projects within the next two years, targeting a share of the estimated 10-15 GW ordering in the sector. This strategic focus aligns with projections that India's thermal power capacity will grow from 247 GW in FY25 to 309 GW by FY32, necessitating an additional 80 GW of coal-based plants and an investment of $91 billion.
Key Drivers for Thermal Power Revival
Subramanian Sarma, deputy managing director and president at L&T, cited rising baseload demand, energy security considerations, and the imperative to replace aging thermal assets as key drivers. Policymakers and stakeholders consistently articulate these themes, making it strategically important for L&T to leverage its established presence and expanding manufacturing capabilities. As of December, thermal power represented a high single-digit percentage of L&T's order book, a share expected to increase marginally over the next two to three years.
Industry Peers and Expansion Plans
KEC International, part of the RPG group, is also bidding for multiple private thermal projects. Vimal Kejriwal, managing director and CEO, noted that the current geopolitical climate, particularly conflicts in West Asia, may further accelerate government impetus for thermal projects, predicting a significant comeback for the sector. State-owned NTPC plans to add 30 GW by FY2032, while Adani Power aims for 24 GW of thermal capacity by the same fiscal year, representing a substantial expansion from its current 18.15 GW. Adani Power has earmarked Rs 2 lakh crore for its capital expenditure plans. Morgan Stanley reports highlight rising risks to gas and hydro supply in H1FY27, suggesting thermal coal power generation will absorb incremental load.