The government has announced several initiatives to revive the power sector since the time it has come into power. Have these initiatives started delivering?
A slew of announcements in the past two years indicate that the country is noticing systemic reforms in the power sectors. The government is doing its bit to revive the private sector’s confidence in the power sector. Initiatives like Unnat Jyoti by Affordable LEDs for All (UJALA), rural electrification under Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Ujwal DISCOM Assurance Yojana (UDAY) and the recent Saubhagya along with digital empowerment are loud and clear statement of intent to make India a power-rich country.
As far as the revival of electricity sector is concerned, the haze continues to be there. There still is a large population that does not have access to power. Unscheduled load shedding and power cuts continue to bother people. Losses owing to ageing equipment and pilferage continue to dog the distribution infrastructure and many distribution companies are unable to buy power and supply to customers in spite of availability. We also do not have enough transmission lines to transfer available or surplus power from rich pockets to areas of need. We, however, should be confident of significant improvements in all these areas in the next few years.
Could you single out one particular initiative that will change the game in 2017?
It clearly has to be a technology-driven initiative that can manage complete accounting of supply and use at all points right from the generation to the end user. Initiative like the implementation of smart grid can act as a game changer. It will help reduce AT&C losses for the utilities by providing them with required information for planning their operation towards enhancing efficiency. At the same time, it will empower consumer to take informed decision regarding their energy usage like shifting usage from peak to off-peak hours etc. This will make the utility-consumer interaction transparent.
The near-time availability of information from meters regarding tamper or malfunction and the facility to remotely disconnect / curtail / connect loads based on defaults or peak loads will help smoothen the demand curve as well as plug losses. The analysis of data on energy consumption and networks will bring out important insight like the loading of individual DTs and thereby will help prevent overloading of DTs and eventual failure of them.
Along with these, there should be regular disclosure of the utility bottom lines; their results should be published on a regular basis. Reduction of ATC losses needs to be given very high priority across the board.
The management of peak load by smoothening the demand curve and by better forecast will help utility save on the peak-time charges for purchase of electricity. Finally, such deployment will create awareness and sensitivity amongst utility and consumers for smart delivery and usage of electricity.
What are the major changes observed during the past one year as far as improving the health of the industry is concerned?
We have come across announcements of initiatives. Results of implementation of these initiatives will become visible in course of time. The biggest announcement by government this year is the power for all – Saubhagya scheme, for the government targets to complete the electrification of 40mn households across rural and urban areas in the country by end of 2018. Universal electrification is likely to support electricity demand growth in the medium to long term with the Central Government having provided funding of ~US$3.5bn to States over the last 3 years. This will connect each household with electricity either by way of extending the grid or by looking at off-grid solutions. A very innovative part of this scheme is the use of direct benefit transfer to ensure robust payment mechanisms for the distribution companies. Recently, another initiative that has caught up steam is the smart meter tender by EESL. This will give a momentum to the smart metering initiative
that has been lingering on for a while now.
How did your company perform during the past one year?
We have grown in the range of 8-10 per cent in different products and solutions category. In certain products the growth has been more significant whereas in others, it is subdued. Power and minerals and metals have witnessed poor growth while infrastructure and oil and gas sectors have helped us grow better helping to reach an average 8-10 per cent growth.
As the industry is all set for a massive rebound, what are your innovative strategies to remain competitive?
I am not sure if the industry is set for a massive rebound especially in the manufacturing space as this calls for investments from government as well as the Private sector. As of now, one has limited investment is witnessed in the manufacturing space. However, government push on the infrastructure through central funding is expected, including the Government of India’s ‘Household (HH) electrification’ scheme – ‘Saubhagya’ – targets to provide electricity connections to 40mn unconnected households (26 per cent of total HH) by December 2018 (before the May 2019 central elections). If implemented diligently, this could act as a major stimulus for the ailing power sector in India, with demand revival, along with other infrastructure projects.
L&T Electrical & Automation business will continue to work on developing and offering solutions that will target the infra sector. We have expanded our product range to align with the needs of infra and building segments getting impetus from various government schemes. While we ramp up portfolio to align with the growing segments, we continue to keep a close watch on potential revival of some of the core sectors like cement, steel etc.