Anant Bajaj, Joint Managing Director, Bajaj Electricals
The cheap import of Chinese equipment exposes the sector to quality defaults which may disrupt the reliability & high standards which the transmission sector has so far adhered to. This would also necessitate extensive maintenance of facilities. The sector needs to maintain strict quality control, states Anant Bajaj, Joint Managing Director, Bajaj Electricals in an interaction with Electrical India…
What are the key market trends of Indian Power Transmission sector? What are the growth drivers of this sector?
With the thermal sector in a slow growth mode, the renewables have taken the center stage. The solar & wind power is coming up very rapidly & augmenting the supplies. The transmission sector has huge capacities; however, the order inflow comparatively is restricted.
The growth drivers are the generation facilities which are coming up in renewables since the affordable land is available in the hinterland & the consumer is far from place of generation, the infrastructure that needs to be set up in terms of transmission lines & substations is driving growth in the sector.
What kind of opportunities do you look forward for this sector with the government’s particular focus on giving a new facelift to the country’s infrastructure like roll out of 100 smart cities, commitment to provide 24*7 electricity to all, announcement of railway electrification projects, new metro projects, dedicated freight and cargo corridors project etc? So, what have been the recent technological innovations in this power transmission industry?
The roll out of smart cities & the commitment of the government to provide 24x7 power will necessitate building of new infrastructure to provide the enhanced power to the new facilities. The roll outs would need to be smart & ergonomic. The monopoles would perhaps replace the conventional towers, the overhead lines may be replaced by underground cabling, the GIS stations would replace the conventional AIS stations, and the illumination would be done by LEDs. The data cables would also be bundled along.
The Smart Cities would need to be connected smartly by metros, bullet trains; the industrial parts of the city would need the dedicated freight corridor. To power these facilities, smart electrification would need to be in place. The infrastructure would necessitate cross country electrification as well as sophisticated facilities within the smart cities.
This would be a tremendous opportunity for the sector as huge infrastructure would need to be created and it would also present an opportunity for the maintenance & upkeep of the vast infrastructure created.
What are the hurdles that the Indian power transmission industry is facing? What kind of support would you expect from the government?
Most of the transmission tower projects and EHV sub-stations projects in India are grossly delayed. The industry ascribes the cause of these delays to the necessity of extensive coordination and cooperation between various stakeholders like state owned companies, individual landowners and contractors. This leads to stand-offs on critical issues like ROW (right of way), design, land acquisition, environmental approvals etc and consequently to unpredictable time overruns. Once projects are delayed, more working capital is needed, increasing the cost of the project.
Typically, the projects are being executed at a margin of between 5 – 7 % and the retention is 10 % implying negative cash flows throughout the project lifecycle. Also, from statistics, it can be seen that the projects do not get closed which further delays the release of retention and in turn affects other projects being executed by the agency due to liquidity constraints. Steps are required to be put in place to ensure the completion of the entire project lifecycle including closure to facilitate liquidity & smooth execution of subsequent projects.
What is the current manufacturing capacity of the company?
The plant of the company has a capacity of 30,000 MT per annum which can be transmission towers, monopoles, high masts and street lighting. In addition, we have an execution capacity of 1000 crs a year. The capacity is flexible and can do end to end execution i.e. transmission line on conventional towers, EHV cabling, transmission line on monopoles, EHV AIS substations, EHV GIS substations, and illumination lightings.
What are the projects in pipeline?
We are executing EHV AIS substations, EHV GIS substations, Transmission line on conventional towers, EHV Cabling, Transmission line on monopoles, High mast, Street lighting, Stadia lighting and monument lighting projects.
What are the threats that the sector face due to cheap import of Chinese equipment? According to you, what precautions does the sector need to take in order to curb import of these equipment?
The cheap import of Chinese equipment exposes the sector to quality defaults which may disrupt the reliability & high standards which the transmission sector has so far adhered to. This would also necessitate extensive maintenance of facilities. The sector needs to maintain strict quality control.
The Government has up-scaled the target of renewable energy capacity to 175 GW by the year 2022 which includes 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power. Going ahead, what potential will it generate for the segment?
The generation facilities which are coming up in renewables will be drivers for growth of the transmission sector. As the affordable land is available in the hinterland & the consumer is far from place of generation, the infrastructure that needs to be set up in terms of transmission lines & substations would be huge. The renewable sector would generate fresh potential for the transmission sector.
What is your outlook for the sector?
Viewing the government initiatives especially for the rural sector and employment, it would need industrialization and blossoming of initiatives such as ‘Make in India’. The industrial hubs that would be set up would need power to propel them. Also they would need to be connected, smartly lit and would also need ergonomic infrastructure.
The share of generation by renewables is also making rapid strides in the country. These initiatives would throw up huge opportunities for the sector and rapid economic growth would also benefit the sector in the coming years.
But, the pressure on margins and cash flow along with ROW issues are some of the challenges that the sector has to face. Government support on ROW issues, can actually accelerate the process of infrastructure development in this space and can help the projects to finish on time.