Industry Analysis

Indian transformer market: Attaining maturity

With achievement of UDAY and other discom schemes, there is a massive acceleration of infrastructural improvement which has led to a surge in demand for transformers in the country

Whether in infrastructure systems, industry or households, transformers always play a crucial role in the consistent transmission and distribution of power. India is on the brink of becoming a major power nation midst the developing economies. Electricity is a key component for the economic growth of the country and is directly linked to GDP of the country. There has been a heave in demand for power in India due to escalation in capacity utilisation, industrialisation, urbanisation and population.

With achievement of UDAY and other DISCOMs schemes, there is a massive acceleration of infrastructural improvement in India. The government plans such as DDUGJY, IPDS and growing FDI in power industry are few growth drivers in the industry. The growth in renewable energy sector also
significantly helps in surge in demand for transformers.

The power and distribution transformers market in India is anticipated to exceed $3 billion by 2022. Distribution transformers dominated the Indian power and distribution transformers market over the past few years, and this trend is likely to continue in the coming years.

Apart from manufacturing transformers, transformer service industry can also be started; thus, attaining third-party contracts from governments or other private players. Current transformers and latent transformers can be manufactured from the surplus of distribution and power transformers reducing the manufacturing costs.

Government schemes such as DDUGJY and IPDS which are intended at improving the distribution networks in rural and urban areas, correspondingly, largely drive the distribution transformer demand in India. The demand from these schemes is estimated to continue and in addition new schemes such as Saubhagya scheme which aims to deliver last mile connectivity to rural consumers should surge future demand. Infrastructure segment are observing increase in demand for distribution transformers and amplified government spending in this segment is set to push demand in future.

India’s transformer market is primarily unorganised with many small participants gratifying to the smaller distribution transformer markets. However, many are gently graduating to the medium-sized category; thus, developing the organised participants’ base. This makes the market more aggressive and price sensitive rather than quality. If organisation stresses on quality manufacturing of transformers, they can withstand the competition and have incremental growth.

Scope of power transmission and distribution equipment market
Divyansh Kohli, Executive Director, NDL Power Limited examines that, “In the transformer industry, there are 2 clear classifications, one being the utilities / T&D’s and other, Industries; and the two runs fairly independent to each other.”

The growth of the economies, translates into the augmentation of the industries; boosting the power requirement of the plants and thereby, demanding the installation of power assets to meet this requirement. These are higher appreciating markets for the transformer industry and focuses largely on power quality, reliability and minimising T&C losses.

“On the other hand, initiative such as UDAY and Power-for-all is specifically designed to focus of the T&D setup of the country, promoting rural electrification and meeting the populous demand within the nation. They contribute to the other side of the coin, that is the transformer industry, to meet the bulk demands with highly competitive pricing and complex cash-flow cycle, “he further adds.

Strengthening T&D network
Distribution transformers holds major revenue share in the overall transformer market. The government is motivated towards strengthening of power transmission & distribution (T&D) network to deliver quality power in various sectors. Supply of quality power is limited by tailbacks such as high AT&C losses in transmission and distribution sector.

NDL Power Limited opines that, “Strengthening the infrastructure for T&D is the need of the hour. The company has been closely associated with several generation utilities and private transmission bodies; to monitor, control and maintain the high-value transformer assets across the nation which in-turn is the backbone of power industry.”

Designing and implementation of a RCM based power management system is the only way to strengthen the generation and transmission network, which is achieved by undertaking critical actives such as condition monitoring, trending analysis and need-based maintenance actives, the company further adds.

Design team of transformers should be very strong and is one of the foremost growth drivers in industry. They need to make the designs in such a way that material required for manufacturing transformers should be available freely (many suppliers) and less tailored materials need to be ordered. The windings should be made easy so that workmen find them easy to assemble. The other growth driver is coordination between different departments.

High efficiency distribution transformers are the requisite of the day. Nonetheless, the transformers alone cannot ease the losses. They must be stipulated with a sound environment comprising a network devoid of overloads, under voltage, single phasing, destabilise, harmonics, etc. Regulation with monitoring the transformers’ health on an uninterrupted basis containing periodic checks on the loads and load pattern will improve their life and guarantee unremitting performance close to designed parameters.

The transformers manufactured in India have been conveyed under compulsory BIS certification, resultant in standardization of the product, which has resulted in enhancement of quality and reduction of failure of transformers. The distribution transformers have also been conveyed under compulsory BEE star classification scheme which has developed in the use of modern technology in manufacturing energy efficient transformers.

The demand of distribution transformers will keep on mounting due to rise in generation capacity of both conventional and non-renewable sources due to surge in per capita consumption of electricity and new avenues such as electric vehicle charging stations etc. The demand will also rise due to substitution of old transformers with energy efficient transformers.

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