The cables and conductors industry has gained momentum after a downturn due to the Covid-19 pandemic last year, driven mainly by the expansion of the transmission and distribution (T&D) network. A key driver behind further expansion of the industry is the need for power evacuation from upcoming renewable energy projects as well as for providing 24×7 reliable power supply. Projects such as the Green Energy Corridors and Transmission Scheme for Renewable Energy Zones are already under way to facilitate the integration of renewable energy into the grid. On the technology front, utilities are focusing on optimising power transfer per unit right-of-way (RoW) and increasing the current carrying capacity of transmission lines. High performance conductors such as high temperature low sag (HTLS) conductors are gaining traction. Other advancements in cables and conductors include using superconducting transmission lines (SCTLs), gas-insulated lines (GILs), high surge impedance loading (HSIL) lines, cross-linked polyethylene (XLPE) cables, underground cables and e-beam cables.
The cables and conductors industry witnessed a slump with the outbreak of Covid-19 last year as domestic manufacturing suffered owing to supply chain disruptions, which also led to delayed payments. Declining metal prices and optical fibre prices have also had an adverse impact on the market in terms of reduced realisations. While there has been an upturn in both the cables and conductors industries as compared to the past year, the demand is yet to reach the pre-pandemic level.
As per the Indian Electrical and Electronics Manufacturers Association, cables and conductors account for 39 per cent and 8 per cent, respectively, in the overall electrical industry size. The size of domestic cables (LV and HV) in India stood at around Rs 425.88 billion in 2020-21. The cables industry registered a growth of around 22.3 per cent in June 2021 over the same month in 2020. However, there has been a downward growth compared to the pre-pandemic level, as the cables industry has shrunk 25.8 per cent in June 2021 over June 2019. Meanwhile, the size of the conductor industry stood at Rs 73 billion in 2020-21. The market for conductors grew by 23.5 per cent in June 2021 over the same month in 2020, while it has declined compared to the pre-pandemic level, as the industry has shrunk 24.3 per cent in June 2021 over June 2019.
The growing T&D network is the key demand driver for cables and conductors. The transmission segment is set to grow in the coming years, driven mainly by the need to evacuate power from large-scale renewable energy projects. With the government’s target of setting up 500 GW of non-fossil energy capacity by 2030, as reiterated recently at the 26th Conference of Parties (COP26) in Glasgow, Scotland, the matching transmission network for the evacuation of power will require significant expansion and strengthening. Apart from this, the goals of building an interregional grid to ensure seamless flow of power from one region to another and cross-border interconnections with SAARC countries are driving transmission network expansion. The Green Grids Initiative-One Sun One World One Grid envisions connecting all countries with solar energy supply across the Tropic of Cancer. India plans to take a major leap towards building an intercontinental renewable energy transmission network.
In addition to this, the growing public-private collaboration in the transmission segment, with the award of projects through tariff-based competitive bidding (TBCB) mode, is driving private investments in the segment. Recently, the Ministry of Power (MoP) approved 23 new interstate transmission system (ISTS) projects with an estimated cost of Rs 158.93 billion. These include 13 projects with an estimated cost of Rs 147.66 billion to be developed under TBCB mode and 10 projects with an estimated cost of Rs 11.27 billion to be developed under the regulated tariff mechanism (RTM). The new transmission projects would facilitate evacuation of power from 14 GW of renewable energy projects in Rajasthan, 4.5 GW of renewable energy projects in Gujarat, the 1 GW Neemuch Solar Park Madhya Pradesh, and feeding areas near Akhnoor and the Jammu region by establishing the Siot substation in Jammu.
The growing power demand also creates the need for transmission network expansion. The per capita electricity consumption in India stood at 1,208 units during 2019-20 and is expected to reach 2,984 units by 2040 (Source: Powergrid). Further, the new forms of loads such as the charging of a large number of electric vehicles, data centres and Indian Railways, which is undertaking an electrification drive, will be some of the other key drivers for the expansion of the transmission network. The demand will also come from the renovation and modernisation of sub-transmission networks. As per the MoP’s recent order, all 33 kV systems, which are currently maintained by state distribution companies, will be brought under state transmission utilities in a phased manner for better planning, loss reduction and increased supply reliability.
Meanwhile, in the power distribution segment, the demand for conductors and cables is primarily for network strengthening and expansion purposes. The government has set a target of providing 24×7 power for all, which requires a robust and resilient distribution network. Apart from this, there is the recently announced Revamped Distribution Sector Scheme (RDSS) with an outlay of Rs 3,037.58 billion for five years for the power distribution segment. The scheme will provide assistance to discoms for infrastructure creation, including feeder separation and system upgrade. Besides, the central government is undertaking privatisation of the power distribution business in union territories which is expected to lead to greater investments in network strengthening and expansion.
The ongoing smart city projects, wherein large-scale developments are being carried out in the power, telecom, housing and other infrastructure sectors, constitute another demand area for cables and conductors. Underground cabling is an essential part of smart city projects. It has become almost mandatory in densely populated areas, owing to increasing RoW issues.
In the power transmission segment, there is a growing uptake of HTLS conductors and high temperature superconducting (HTS) cables. HTLS conductors can withstand high operating temperatures, and have around 30 per cent more current carrying capacity than conventional conductors. They can thus help in achieving greater ampere capacity (ampacity) without modifying most of the existing towers. A major application of HTLS conductors has been in reconductoring/uprating the existing lines to in-crease power transfer capacity. Meanwhile, HTS power cables can carry five to 10 times the current carried by conventional conductors. They have a compact size and can be installed in dense urban areas with high load requirements. Moreover, HTS cables have exceptionally low transmission losses – about one-fourth those of conventional copper or aluminium conductors.
In the cable segment, XLPE cables offer greater tensile strength, elongation and impact resistance. They have higher dielectric strength, resulting in low dielectric loss. Meanwhile, another emerging technology in the segment is GIL, which has nitrogen and sulphur hexafluoride as the insulating medium. GILs serve as a viable alternative to overhead lines in places where RoW is not available for electricity transmission, as these can be installed underground as well as in tunnels and trenches. Underground cable systems are also being deployed by utilities in areas where securing RoW is extremely challenging.
Besides this, the deployment of specialised cables to meet specific end-use requirements is gaining traction. For example, solar cables are designed to suit the specific purpose of evacuating solar energy from PV modules. They have a high thermal rating, which allows them to withstand extreme temperatures, and high resistance to heat pressure and superior abrasion. Similarly, various cables used in wind power plants are designed to meet particular requirements.
The cables and conductors segment has started seeing an uptick and is expected to witness robust demand in the medium to long term, primarily on the back of the expanding T&D network. To meet the future peak load and integrate huge renewable energy projects going forward, huge investments will be required to strengthen and ramp up the country’s transmission infrastructure. Similarly, the RDSS scheme will push infrastructure creation in the distribution segment. Moreover, the National Infrastructure Pipeline has estimated a capital expenditure of about Rs 3,040 billion for the power transmission segment between 2020 and 2025, which is indicative of industry’s demand going foward.