Opportunities for transformer industry out of rural electrification movement
Realising its importance of electrifying villages the Indian government has introduced initiative such as rural electrification movement etc. As per Deendayal Upadhyaya Gram Jyoti Yojna (DDUGJY) out of 597, 464 census villages, 592, 546 villages (99.1 per cent) have been electrified. To take this mission forward the government targets 100 per cent village electrification by 1st May 2018 and a hefty amount of Rs 4, 814 crore has been proposed under the DDUGJY in 2017-18. Since transformers play a key role in the power sector let us understand the opportunities for transformer industry in India out of rural electrification programme.
Opportunities for transformer industry out of rural electrification movement
The rural electrification programme announced by the central government is extremely ambitious and it was perceived that the distribution transformer industry would be having a very large demand for meeting the requirement of this programme, believes Vishnu Agarwal, CMD, Technical Associates Ltd. He says, “Though the government did not come out with the exact numbers of distribution transformer that would be purchased by them, however, the industry estimated that approximately 5 lakh distribution transformers will have to be purchased for meeting this ambitious programme.” Ministry of Power had initially appointed PGCIL as the nodal agency for finalising the specifications, collecting the requirements from the different distribution utilities and calling for tenders from approved vendors. This was done and the purchase through reverse bidding was also carried out by PGCIL wherein the distribution transformer manufacturers were identified for placement of orders on the basis of the lowest bid offered during the reverse bidding process. Thereafter the utilities did not agree to the purchase of distribution transformers through this process as they wanted to call bids on their own for procurement of the distribution transformer in their individual utilities. Since most of the distribution utilities did not have their own funds, they were dependent on funding from central agencies. The current situation is that some of the utilities have finalised their orders on different vendors who have also started supplying the transformers; however, many of these utilities are facing financial problems.”
He states the example of, the U.P. based utilities have put on hold the manufacturing and delivery of transformers ordered by them due to paucity of funds. Whatever quantities have been already delivered to them, the payment of the same is not being made, thereby putting the Distribution Transformer industry in financial crises.
All are aware that the distribution utilities across the country are burdened with huge losses and they are in no position to make any capital expenditure from their own resources. They are heavily dependent on funding by central government agency such as REC and PFC. Unless and until the distribution transformer manufacturers get their payments as per contractual stipulations; most of the vendors find it difficult to make supplies of the ordered transformers as per the required deliveries. “To my mind this has affected the entire programme of rural electrification and the targets announced by the government may be delayed, particularly if a corrective action is not taken immediately. The total demand which was perceived by the industry may also be reduced due to financial constraints,” he observes.
Transformer is the key asset to any power system, let alone the T&D system. “When we retrospect the opportunity for the industry with such a movement, there are two prospective to look into, the first being the impact on the transformer manufacturing industry and other being the maintenance and service industry,” says Divyansh Kohli, Executive Director, NDL Power Ltd.
India has a significant power requirement, and therefore has an optimistic power infrastructure development program. “With efforts of such electrification program – the manufacturing industry is directly affected, but there is another side of the coin. With the prevalent market scenarios and competition, a significant boost to the industry economy is not quite expected. However, the times ahead shall reveal the fate of the industry,” he observes.
He adds, “On the other hand, with the increase in the asset fleet and T&D capacities; equivalent resource shall be needed for its up keeping and maintenance; and that is where the service industry comes into the picture.”
Tremendous work is being done under DDUGJY Scheme. Rural electrification work is being taken up in a big way with the MoP’s vision of electrifying up to Last Mile. This has given the entire industry an opportunity to grow specially transformer. “However, transformers industry is also going under confusion on which standard to follow (BIS or BEEE)? As both being prevalent, it is very important for the ministry to set one standard for all,” points out Nitin Jain, Executive Director, Marson’s Electrical Industries.
While explaining about the opportunities for transformer industry out of rural electrification movement Manas Kundu, Director Energy Solutions, ICA India says, “To achieve the energy efficiency targets in T&D of electricity, both structural and technological actions are required. An important first step will be the general adoption of low loss rate equipment, such as high efficiency transformers and cables. In addition, the grid architecture will have to be rethought. Local, semi-autonomous micro-grids with energy storage and balancing tools will facilitate the connection of renewable generation systems and connect them immediately to demand, thus minimising transmission losses. Both T&D require a dissemination of best practices and an unambiguous regulatory framework that enables grid operators to make substantial investments.”
Committed to electrify the rural areas
Out of rural electrification movement the transformers industry is expected grow. On this note experts share about their offerings and how are they committed to help electrify the rural areas.
With the efforts to electrify the remote and rural parts of the country, the T&D infrastructure is installed and the fleet significantly increases. NDL effectively manages the life cycle of such fleet of transformer and HV Power assets. While explaining about the company’s commitment Kohli says,“We undertake transformer fleet management of thousands of transformer, all together by comprehensive integration of condition monitoring, inspection, laboratory and onsite analysis followed by maintenance and up keeping activities. T&D system, where the assets can range from 25 kVA to over 500 MVA has the most crucial need – to ensure continuous power and reliable operation.” NDL has developed programs based on the capacity, need and priority of all such assets, and manages every single asset through our property systems, like maxfree analyst™. “Further, we undertaking technical appraisal programs and organise technical conference to educate professional towards reliable transformer management, our latest technical conference being on residual life assessment study and condition monitoring of transformer assets, held at Baddi, Himachal Pradesh on 15th February 2017. We are the reliability partners to the power system, the doctors to transformer assets,” he adds.
Technical Associates Ltd. is a 50 years old company which started as a manufacturer of distribution transformers. The company still continue to make distribution transformers though the majority of its revenues come from power transformers of 132KV and above. “While the manufacturing capacity is not a constraint, we are not interested in working in a situation of uncertainty where the orders are put on hold midway and even where deliveries are accepted the payments do not come for months together. We feel that this situation will be common to all distribution transformer manufacturers and on behalf of the industry, I would be justified to comment that the problem is not one of shortage of manufacturing capacity but that of uncertainty from the utilities and, therefore, every manufacturer is cautious in accepting very large orders unless and until he is able to build a confidence that the contracts which he has accepted shall move smoothly,” says Agarwal.
Availability of high quality of materials and new technologies of designing has enabled the company to manufacture transformer of higher energy efficiency more economically. “We have got Type Testing done for a range of transformer ratings to ensure customer trust,” says Jain.