What next for capital goods suppliers ?

Industry:

August 25, 2021

Overview:

The capital goods suppliers have shown intentions to considerably change their strategy in the forthcoming future. The largest equipment manufacturer BHEL has focused on solar PV and Li batteries manufacturing. It has started finding new markets in the field of e-mobility, EV-charging, energy storage, transportation, and Defence sectors. GE India and others are also bidding for the FGD/ NOx reduction solutions, while also focusing on plant integration to include smooth renewable energy production intermittently. Similarly, Siemens India is focusing on driving the energy transition and fighting the impact of global warming with green hydrogen. Hydrogen has become centre stage in strategy of many capital goods suppliers.

Issues:

Stated Future Strategy – Companies

  • Exit Coal Market Globally -GE, Toshiba, Siemens
  • Solar PV and Li battery manufacturing -BHEL
  • EPC solutions for Turbine Island of nuclear-L&T-MHPS
  • Hybrid technology with Wind/ Solar, Energy Storage – GE, L&T, BHEL
  • Green Hydrogen, Hydrogen-powered Gas Turbines – Siemens, GE, Toshiba
  • Continue its business by expanding the service businesses/ new projects in the thermal and nuclear business – TJPS (Toshiba-JSW Power System), L&T
  • Indian Coal to Methanol / Coal Gasification -Thermax, L&T, BHEL
  • Environment solutions like FGD/ DeNox solutions – Thermax, L&T, GE,
  • Expanding into new sectors such as e-mobility, EV-charging, Energy Storage, transport (trains), and defense – BHEL, BGR, L&T
  • Support international companies for setting up a manufacturing base in India – BHEL
  • Upgrade thermal power plants to integrate intermittent RE smoothly in the grid – GE, Siemens
  • Wind ( Offshore/ Onshore) – Siemens, Toshiba, GE,
  • Small Nuclear Modular Reactor -GE
  • Virtual Power Plants ( VPP) – matching of various gathered data such as demand and supply, weather – Toshiba
  • Shift from large capital-intensive projects to small and distributed clean energy, water, and air Projects – Thermax
References:

a) http://www.bhel.com/financial_information/pdf/19-20/Anual_report_2019-20.pdf
b) https://energy.economictimes.indiatimes.com/news/power/bhel-may-sell-offer-manufacturing-units-to-global-players/75550450
c) https://www.saurenergy.com/solar-energy-news/bhel-seeking-pre-bid-tie-ups-for-50-mw-bess-under-secis-solar-plus-storage-tender
d) http://investors.larsentoubro.com/upload/AnnualRep/FY2020AnnualRepL&T%20Annual%20Report%202019-20.pdf
e) https://energy.economictimes.indiatimes.com/news/power/let-hydrocarbon-engineering-signs-pact-with-ntpc-for-co2-to-methanol-plants/77649687
f) https://www.moneycontrol.com/news/india/lt-delivers-critical-nuclear-power-plant-equipment-to-global-customers-during-lockdown-5321911.html
g) https://www.ge.com/sites/default/files/GE_AR19_AnnualReport.pdf
h) https://www.ge.com/in/sites/www.ge.com.in/files/Annual%20Report%20of%20the%20Company%20for%20the%20Financial%20Year%202019-20.pdf
i) https://www.bbc.com/news/business-54242055
j) https://www.siemens-energy.com/global/en.html
k) https://www.greentechmedia.com/articles/read/4-takeaways-as-siemens-lifts-lid-on-its-energy-future
l) https://www.thehindu.com/business/siemens-arm-not-to-support-new-coal-units/article33069349.ece
m) https://www.bseindia.com/bseplus/AnnualReport/533148/5331480320.pdf
n) https://www.toshiba.co.jp/about/ir/en/pr/pdf/tpr2020q2e_2.pdf
o) https://www.toshiba-energy.com/en/info/file/IRDay_HatazawaP_ENG_.pdf
p) https://energy.economictimes.indiatimes.com/news/coal/japans-toshiba-retreats-from-coal-fired-power-stations/79167414
q) https://www.thermaxglobal.com/wp-content/uploads/2020/07/Annual-Report-2019-20.pdf
r) https://www.financialexpress.com/industry/thermax-looks-to-focus-on-clean-energy-water-and-air/2137545/
s) https://www.financialexpress.com/industry/bgr-energy-looks-at-adjacent-business-as-thermal-power-sector-faces-hurdles/2062104/
t) https://www.thehindu.com/business/bgr-energy-eyes-water-infra-as-thermal-falters/article32416875.ece
u) https://www.thehindubusinessline.com/companies/mukesh-ambani-preps-up-for-a-multi-billion-dollar-play-in-renewables/article32268913.ece?homepage=true
v) https://www.livemint.com/companies/news/ril-now-eyes-smart-electricity-meter-business-11602570157205.html
w) https://www.thehindubusinessline.com/companies/reliance-industries-to-invest-50-mn-in-us-based-breakthrough-energy-ventures/article33086949.ece?homepage=true

Author:
Strategy Boffins Team
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