The Power Ministry has mooted a proposal with the Steel Ministry for the setting up of a facility for domestic production of CRGO (Cold Rolled Grain Oriented) steel that is used in the manufacture of power equipment like transformers and large generators.

 

The facility would either be set up by SAIL or a private sector steel company. Having an indigenous production of CRGO steel has become crucial as at present the entire requirement of about 1.8 lakh tonnes (lt) is being imported, with the availability and price of this crucial raw material becoming increasingly uncertain.

 

“The proposal is at present only in the concept stage and the economic feasibility is being worked out,” Mr Sunil More, Director General of Indian Electrical and Electronics Manufacturers Association, said.

 

CRGO steel is imported by transformer and large generators by companies such as Siemens, ABB and Crompton Greaves. Industry sources say CRGO is manufactured by six companies in the world, who control and supply and price of the material. With the Eleventh Plan envisaging addition of 78,577 MW of power generating capacity, the demand for transformers is set to rise.

 

“Demand for CRGO is expected to cross two lakh tonnes by 2011-12. In view of the emerging demand for the

 

material, the country needs to plan its supply and availability,” an IEEMA note points out. The current price of CRGO is about Rs 3,00,000/tonne, which is experiencing a sharp rise.

 

The transformer makers may get some relief after Thyssem Krupp begins production of this material at its Nashik steel plant. Industry sources say the company is presently in the process of commencing trial production.

 

Although the capacity addition during the Tenth Plan was short at 41 per cent of the target, the Eleventh Plan has started with a better pace. The annual capacity addition by the end of the Eleventh Plan would be around 12,000 MW, which is expected to increase to 32,000 MW from 2022.

 

“The major concerns of the Indian power scenario presently are peak supply shortage at 16.6 per cent, high AT&C losses at 40-53 per cent and energy supply shortage at 9.9 per cent. In order to achieve these targets, the Government should come out with adequate policy and fiscal support to the electrical equipment manufacturing sector,” IEEMA said in its pre-Budget Memorandum. –Business Line