Interview with Dr Harald Griem

“We foresee growth opportunities in automation and digitalisation”

Power and automation technology major Siemens is optimistic about the sector’s growth in India, driven by electrification opportunities, uptake in technologies for power quality improvement and smart grid development, and integration of renewable energy on a large scale. In an interview with Power Line, Dr Harald Griem, executive vice-president and head, energy management division, Siemens Limited, talks about the company’s performance, emerging opportunities and outlook for the sector. Excerpts…

What have been the most noteworthy achievements of the power sector in the past one year? What were the major hits and misses?

India achieved 329 GW of installed generation capacity as of August 2017. Our solar momentum is on track with an installed capacity of 12 GW until then. The transmission segment has also done well, achieving an aggregate substation transformation capacity of 748 GW  (alternating current [AC] and direct current [DC] combined). The segment has been able to maintain its momentum to achieve the required bulk power transmission capacity by initiating two major high voltage direct current (HVDC) projects aggregating 10 GW. Further, the energy efficiency programme entailing the replacement of bulbs with LEDs crossed 240 million LEDs, which is a global benchmark in saving peak demand of more than 6 GW. The Ujwal Discom Assurance Yojana is beginning to show results with the combined aggregate technical and commercial losses of 27 major discoms at 20 per cent in 2017 as compared to 25 per cent in 2015. A similar positive trend has been observed in the average revenue realised-average cost of supply gap, with improved billing efficiency, resulting in discoms’ improved credit ratings. While we have done well in terms of growth, there is more homework to be done to make power available to all. There are still around 40 million households left to be electrified.

What is your perspective on the state of the transmission and distribution (T&D) equipment industry? Was there any improvement in equipment orders in the T&D segment in the past year?

The T&D equipment industry, covering towers, lines, conductors, transformers, cables, etc., is worth Rs 970 billion, including exports, in 2016-17. At an aggregate level, the industry grew nominally, at only around 4 per cent over 2015-16. Segments such as towers, conductors and insulators showed negative growth while other segments like transformers, switchgear and cables showed a positive trend. Unfortunately, there is a negative trade balance in the industry, even though there is no capacity or technology gap. According to trade information provided by the Indian Electrical and Electronics Manufactures Association, India is a net importer of products like low voltage, medium voltage and high voltage switchgear and insulators.

What will be the key business opportunities for equipment providers in the next few years? 

We foresee the government’s initiatives and programmes as being the demand drivers for the next two years. Apart from conventional switching equipment driven by electrification, there would be more growth opportunities in automation and digitalisation, in areas such as advanced metering infrastructure, renewable energy integration and storage, integrated city control centres, and reliability-centred asset management.

What have been some of the significant business highlights for Siemens India during the past year?

Siemens India remains a significant partner in the subcontinent’s power sector growth story, with a highly localised value chain, and driven by our “customer first” culture. We have combined our strengths in technology and products with benchmark project management delivery and EHS (environment protection, health management and occupational safety) focus. We have commissioned some marquee projects while also securing critical projects for the future.

Power Grid Corporation Of India Limited (Powergrid) used Siemens’ grid simulation software, PSSA, to cater to its requirement for dynamic reactive power compensation in the northern grid and identified Ludhiana as the location for its installation. The swing range required was 1 GVAR (1,000 MVAR), which is the highest in the world and had never been executed before. Siemens took up this challenge leveraging its wide experience in executing static var compensator (SVC) and  static synchronous compensator (STATCOM) solutions in various parts of the world. Designs based on a similar project under execution formed the basis for this project. The facility has operated at a high availability and contributed to the government’s 24×7 Power for All initiative.

In addition, we despatched the largest single-phase generator step-up transformers at 315 MVA to NTPC Limited. Our critical 1,200 kV transmission equipment comprising capacitive voltage transformers, disconnectors and circuit breakers has been successfully energised at Powergrid’s test station at Bina. We won the 2×1,000 MW voltage source converter (VSC) stations, the first VSC project in India, for the HVDC line between Pugalur in Tamil Nadu and Thrissur in Kerala, featuring 100 per cent localised insulated gate bipolar transistor-based converters and HVDC transformers. We secured a major distribution contract from the Rural Electrification Board, Bangladesh, for setting up 33/11 kV distribution stations. Further, our factories are catering to more and more customers in the Middle East, Southeast Asia and Europe.

What are the company’s key  priorities and focus areas with respect to the Indian power sector?

We are serving the electrification of India at all voltage levels, from 400 V up to 765 kV AC and 500 kV DC. With the strong growth of the Indian grid in terms of size, interconnections and renewable generation, which comes without reactive power, a fast response to system disturbances is essential to maintain grid stability. Siemens provides solutions such as SVC and STATCOM, which dynamically control the reactive power in the system to maintain system voltages and thereby maintain grid stability.

Siemens wants to remain the first choice of customers in India and bring in cutting-edge concurrent green technology, provide localised solutions to overcome emerging challenges like renewable energy integration, network stability, power reliability, and load and demand management. The large distances and grid complexity will make automation and digitalisation attractive levers for distribution grid operators. In the long run, we see electrical vehicle charging and interconnectivity with other South Asian networks through the SAARC grid as opportunities.

What is your outlook for the power sector for the next few years? What is your wish list from the new power minister?

India can continue to leapfrog very dynamically by driving basic electrification while installing the latest technologies for power quality improvement and smart grid development, and integrating renewable energy on a large scale. Investors in this sector need a must-run assurance, which is currently not enforceable in many states. Further, there needs to be a well thought-through generation plan to back up intermittent solar and wind energy. The easiest and proven way is gas-fired combined cycle power plants. The push to electric vehicles will be helpful because these vehicles can act as decentralised storage systems, taking up the surplus renewable energy.

In order to implement the Make in India programme in its true spirit, the government’s procurement policies need to explicitly define the required Indian-manufactured products; for example, 50 per cent of these products, where the technology is readily available. This should be mandated for central as well as state utilities. Strengthening Indian production will also help maintain and upgrade the skills of the workforce. Finally, bid evaluation schemes should be based on quality and cost-based selections to ensure sustainable quality, safety and performance, as adopted by the Oil and Natural Gas Corporation Limited and Steel Authority of India Limited.

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