With investments in transmission and distribution (T&D) infrastructure expected to remain high on the agenda of the government through initiatives such as Power for All, smart cities, rural electrification and integration of renewables, the market is expected to sustain strong growth going forward, according to Pitamber Shivnani, president, power grids division, ABB India Limited. Excerpts from a recent interview…
How has the power equipment industry evolved over the past two decades?
The domestic power equipment manufacturing industry has witnessed rapid development and robust growth in the past two decades. Factors such as delicensing and the enactment of the Electricity Act, 2003 by the government have paved the way for private sector participation in power generation, transmission and distribution, which has contributed significantly to the growth. Major equipment industries such as transformers and high voltage equipment have developed capabilities for world-class manufacturing. State utilities have also been steadily progressing towards a higher degree of technology-enabled solutions to power and stabilise the grid.
What is the current state of the power equipment industry and what are the major challenges being faced by it?
With constantly changing market needs and customer expectations, it is an observable fact that the power equipment industry has been evolving as well. Domestically manufactured electrical equipment has advanced over the years to meet the varied network requirements in the country. T&D equipment still accounts for a major part of the power equipment manufacturing market in India.
Based on the government’s projections for capacity enhancement, domestic electrical manufacturers have made significant investments for increasing production capacity. However, with the economic slowdown in the past couple of years, domestic demand has remained sluggish. In addition, the competitive landscape has changed in recent years with increasing electrical equipment imports. The demand for high quality power equipment production combined with shorter timelines has ushered in a new era for investing in research and development of advanced technology and more efficient processes.
Did the industry experience an improvement in equipment orders in the past year, particularly in the T&D segment?
Various factors have contributed to the positive growth in the T&D sector. The government is focused on its goal to provide quality Power to All by 2020 (an estimated 250 million people do not have access to power). The Smart Cities and Make in India initiatives are also heavily dependent on reliable power supply. In addition, there is greater emphasis on the development of infrastructure such as railways and metro rail, led by urbanisation. Other factors such as power tariff hikes and restructuring of discoms that are expected to boost the distribution segment also play a key role here. Further, the launch of the Deendayal Upadhyaya Gram Jyoti Yojana has ensured that rural electrification remains in focus. The integration of renewables, especially solar power, is expected to be another growth driver. These factors are driving improvements in orders from utilities as well as engineering, procurement and construction companies across the industry.
What are your expectations from equipment orders from the power sector in the next one to two years? What will be the key business opportunities for equipment providers?
There is a vast installed base for power equipment from utilities, independent power producers as well as the industry. This has led to growth in the service industry. Besides this, the evolution of the grid is giving an impetus to new segments like renewable energy equipment, smart grid offerings and grid automation. The focus on the T&D segment to respond to market drivers and provide access to reliable power has called for the traditional grid to evolve. Distributed generation through microgrids and the focus on advanced ultra high voltage (UHV) transmission products and solutions will shape the future of the grid. As a result, products and solutions that respond to market trends such as PASS, GIS, high voltage direct current (HVDC) technologies and traction transformers are in great demand. In addition, technologies and equipment-driven grid trends such as UHV, grid automation and protection products, and digitisation products and software will lead the way.
What are the most promising and relevant new technologies for the Indian market?
The power sector has witnessed the evolution of various technologies. From traditional air-insulated substations, we are now witnessing high demand for gas-insulated substations, resulting in the optimisation of land usage. Similarly, power evacuation has popularised technologies like HVDC and UHVDC. Further, initiatives are being taken to test high voltage transmission. One such example is India’s National Test Station at Bina testing transmission equipment at 1,200 kV – the world’s highest rating – where ABB has partnered to provide the circuit breaker and transformer technology, which is the highest rated circuit breaker and transformer to be successfully energised anywhere in the world. Of course, technologies like HVDC and FACTS are relevant for strengthening the grid. Reactive power compensation is another area and flexible AC technologies such as STATCOM and SVCs for stability of the Indian grid have gained traction. With an increased focus on renewables, power storage is becoming increasingly important and there has been a continuous evolution in storage capabilities. Apart from this, greater adoption of intelligent electronic devices, digital substations, etc. are other interesting developments in the sector.
How would you describe ABB’s experience in the Indian power sector?
ABB has always been a pioneer in latest technological developments in the sector and our continuous focus has been to introduce the latest concepts in India as well. ABB is a leading power and automation company and has been in India for a century with a manufacturing presence of 60 years.
Over the years, the company has made several path-breaking innovations and has many firsts to its name. Our significant achievements include India’s first HVDC project, which was set up 25 years ago. We have also contributed to building the country’s first 765 kV power transmission network over the past decade. Our transformers and circuit breakers, designed and made in India, with the world’s highest voltage rating (1,200 kV), have been deployed at Power Grid Corporation of India Limited’s test station and at the world’s first multi-terminal UHV link of 6,000 MW, over 1,728 km from the Northeast to Agra.
What will be ABB’s key focus areas for the next two to three years?
ABB’s power grid division is well positioned in India with products, services and solutions. We continue to maintain a strong foothold in the area of electrical equipment and raise the bar in technology innovation. Simultaneously, we have focused on areas like microgrids and digital substations. In the distribution segment, there is high emphasis on digital substations and automation along with opportunities arising from rural electrification schemes. There is also a focus on grid reliability due to the increasing share of renewables in the generation mix. We are well placed in this regard, having strong technology solutions like HVDC and FACTS. Further, microgrids are likely to be a viable solution to overcome challenges like access to electricity and integration of renewables. Other key areas within the sector are plant SCADA and digital substations.
What is the company’s outlook for the power sector for the next few years?
The market drivers for the power sector remain strong. Urbanisation and increasing support for manufacturing growth call for rapid modernisation of the power grid. Large capacity addition plans and fuel availability will be the key to maintaining the sector’s growth trajectory. India has already added the highest ever power generation capacity during the Twelfth Plan. Apart from thermal plants, there is increased integration of renewables, as well as the emergence of distributed power generation and microgrids. While traditionally there has been a higher focus on the generation segment, going forward, the need to evacuate
power and strengthen the grid will be crucial for overall sector growth. Hence, technologies that enable this will gain ground such as UHVDC solutions, increasing grid automation and power quality solutions. In addition, service and consulting remain key focus areas.