Power insight April May 2018 Ecopy

INR. 100/-

RNI No.:MAHENG/2010/39548

Vol. No.9

n

Issue No. 1

n

April - May 2018

n

Mumbai

Sector Focus

Power Distribution Sector - India

The Weakest Link Despite various efforts to boost the efficiency of the Indian Power Distribution Sector it remains the weakest link in the power value chain.

Industry Insight

Market Review

Special Feature

Solar

Diesel

Power Plant

PV - Cells & Moudules

Engines & Gensets

www.vision-media.co.in

Renovation & Modernisation

|

Power Insight

|

April - May 2018

|

1

2

|

April - May 2018

|

Power Insight

|

www.vision-media.co.in

EDITOR’S NOTE A lot needs to be done for Uday success and improvement in efficiency of state discoms

E

ven after the admirable improvements witnessed by the Indian power sector over the last few years, the distribution segment remains the weakest link in the value chain.

The books of the State discoms are to be purged of their massive losses and mounting debt, paving the way for them to be operationally viable. These losses were estimated at around INR 3.8 lakh crore in 2014-15 along with an outstanding debt of about INR 4.3 lakh crore with interest rates upto 14-15 percent. The Discoms in India have witnessed poor financial and operational health primarily due to subsidised pricing, electricity theft, inefficient billing and collection and below average quality of network infrastructure. The crux of the matter is that distribution utilities are not run on commercial lines. Despite corporatization, utility boards remain state-dominated and are rarely evaluated on performance. Utilities must be freed from government interference and their management professionalized.

UDAY or Ujwal Discom Assurance Yojna was launched in November 2015 to help loss-making discoms turn around financially, with support from their State governments. Today, 27 states – all but Odisha, West Bengal and Nagaland – have opted to join the Centrally-sponsored UDAY, which works by getting state governments to take over three-fourths of discoms’ debts, leaving the discoms with more funds for operations, and putting through incentives-backed measures to ginger up operations.

However, as per available data, only six states and one union territory meets its FY17 targets under UDAY. Uday has been instrumental in reducing Discom losses by INR15,906 cr from FY16 to FY17. However, most states have missed operational targets set for the end of FY17. It becomes imperative that the Central government should pledge giving regulators autonomy and adequate resources, and hold them accountable for their performance.

It should also allow competition to create pressure for efficient operation, and promote access to electricity in a financially responsible manner......

Pankaj V Chauhan Editor - Power Insight

Email : pankaj@vision-media.co.in

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

3

What’s Inside

content Volume No. - 09 ; Issue No. -01 : April-May 2018

20

Editor:

Pankaj V Chauhan

Sector Focus Power Distribution Sector - India The distribution segment in India has remained as the weakest link in the Power sector value chain since decades, however the government of India has taken some proactive measures in recent years to save the Discoms trapped in a vicious cycle with operational losses and being funded by debt...

Marketing & Sales: Navin SIngh

marketing@vision-media.co.in

K. Pushpageetha

geetha@vision-media.co.in

Creative Head: Prashant S. Kharat

Graphic Designer: G. Sanjay

The Weakest Link

Production Head: Shantanu Singh

Printed, Published & Owned by PANKAJ V CHAUHAN

23 The UDAY Scheme 26 Emergency Restoration System 30 Smart Metering Initiative

Review of UDAY to look into the success of the scheme...

Printed at

MAGNA GRAPHICS (INDIA) LTD., 101, C & D GOVT. IND. ESTATE, KANDIVLI (WEST), MUMBAI 400 067

Published from

G-3A, JUNGLEE PEER DURGAH, K.A.GAFFARKHAN ROAD, WORLI, MUMBAI 400 018.

Editor: PANKAJ V CHAUHAN RNI. NO. : MAHENG/2010/39548

ERS Tower - a solution that helps in reducing the outage time of transmission lines..

The smart meter is a vital technology in India’s power reform.

16

All right reserved while all efforts are made to ensure that the information published is correct, Power Insight holds no responsibility for any unlikely errors that might have occurred. The information on products & projects is being provided for the reference of the readers. However, readers are cautioned to make inquires & consult experts before taking any decision on purchase of equipment or investment. Power Insight holds no responsibility for any decision taken by readers on the basis of information provided herein. All disputes are subjected to Mumbai Jurisdiction only.

4

|

April - May 2018

|

Power Insight

Special Feature

R&M - Thermal Power The renovation and modernisation (R&M) of coal-based thermal power plants (TPPs) is not only required to improvement of plant efficiency and safety and reliability of the operation. It is also crucial from an environmentaln economic perspective...

|

www.vision-media.co.in

Regulars

03 06 08 12 46 48

Editor’s Note Conventional Updates Renewables Updates T&D Sector Updates Communication Features Events Diary

What’s Inside

32

Industry Insight

Solar PV - Modules Market Orders funnelled through a domesticcontent policy have all but dried up, leaving some of India’s biggest solar panels manufacturers on the verge of facing financial collapse, priced out by Chinese competitors as they had been struggling to win contracts.

38

Domestic PV Manufacturing

39

Lost decade of Indian Solar PV Manufaccturing

40

Importance of Material in PV Manufacturing

RIsing Imports along with ambiguity over safegaurd duty has created confusion in the market

Column by: Kolan Saravanan General Manager - Centrotherm Photovoltaics India

Technical Column by: Rahul Khatri Technical Manager - DuPont Photovoltaic Solutions

Industry Interactions

34

36

Krishnan Sharma

Krishnendu Mukherjee

Country Manager ReneSola Jiangsu Ltd

44

42

Chief Operating Officer Sova Solar Ltd

Ivan Saha

BU Head of Solar Manufacturing & CTO - Vikram Solar

Market Review

Diesel Engines & Gensets There are multiple drivers for a pick-up in demand for DG sets.

However, the bigger demand driver for DG sets is industrial, infrastructure and real estate capex. A revival in these three end markets is critical for a recovery in DG demand.

Next Issue Editorial Attraction Sector Focus: Indsutry Insight Market Review Special Feature

Hydro Power Sector Smart Grid Rooftop SOlar India BTG Equipments

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

5

Conventional News

NEWS UPDATES Hydro Power

Himachal Pradesh approves amendments in hydro-policy to promote investment The Himachal Pradesh government has approved amendments in the hydro power policy with a view to reviving 737 stalled projects of 5,500 MW capacity and attracting investors for new projects.

Thermal Power

Govt. allows power tariff hike to pass-through environment norms cost

The state cabinet in its meeting decided to make it mandatory for State Electricity Board to purchase power produced by hydro projects

Union water resources minister Nitin Gadkari has stated that the government will not approve any new hydro-power project on the river Ganga. The decision in this regard has been taken in a recent meeting at the Prime Minister’s Office (PMO), however, it will not affect the under-construction projects.

However, the ministry added that the pass-through of cost for upgradation of power plants under new environment norms as change of law would not be applicable where tariff is determined under Secton 63 of the Electricity Act.

Ensuring uninterrupted flow - ‘Aviral Dhara’ - of the river Ganga, the Centre has decided not to approve any new hydro-power project on the river. The move will help the government in its river cleaning efforts - as the dams of such projects obstruct ecological flow (e-flow) which has self-cleansing ability.

Hydro Power

No new hydro power project on Ganga : Nitin Gadkari

PM Modi inaugurates NTPC’s INR 18,000 crore Patratu TPP in Jharkhand Prime Minister laid the foundation stone of the first phase of 2,400 Megawatt (Mw) capacity of NTPC’s Patratu Super Thermal Power Project in Ramgarh district, Jharkhand.

The first phase of the project will be set up at an estimated cost of around INR 18,000 crore. The Patratu project is a Joint Venture with 74 percent stake of the Jharkhand government and Patratu Vidyut Utpadan Nigam Ltd’s 26 percent stake. PVUNL is a subsidiary of NTPC.

|

The cabinet also gave approval to the proposal that the generic tariff applicable in case of Hydro Power Projects (HEPs) up to 25 MW will be from the date of the commissioning and not from the date of implementation agreement, a release said.

The government has decided to allow pass-through of cost incurred by the thermal power plants for meeting the new environment norms asking the respective TPPs may approach the appropriate commission (power regulator) for approval of additional cost on account of this change in law. The CERC shall develop a mechanism to address impact on tariff and certainty in cost recovery on account of additional capital and operational cost under concluded long and medium-term PPA for this purpose.

Thermal Power

6

with capacity up to 10 MW.

April - May 2018

|

Power Insight

|

www.vision-media.co.in

Thermal Power

NTPC has adopted Charminar under its Swachh Iconic Mission NTPC has adopted Charminar under its Swachh Iconic Mission.

Charminar is first heritage site in Telangana state to be adopted under the scheme.

The NTPC in partnership with Greater Hyderabad Municipal Corporation will take up development and beautification works at the historic monument, which includes providing battery operated vehicles for visitors, bollards to prevent traffic, Swachh Auto Tippers (SAT) for carting away garbage, mechanical sweeping vehicles and litter picking machines, decorative and halogen lighting of the four arches, construction of public utilities. The NTPC as part of its CSR will be contributing INR 8.19 crore towards the implementation of the project.

NEWS UPDATES Hydro Power

Nuclear Power

Dry winter shrinks hydro power growth to 3.5 per cent in India

Two Australian firms in talks to export uranium to India

Hydro power generation in India is all set to increase by 3.5 percent in the current financial year even as dry winter (63 percent below normal rainfall in January and February) has impacted generation in the last quarter.

Two Australian companies BHP Billiton, the world’s biggest mining company, and Heathgate Resources, an affiliate of US company General Atomics, are in discussions with the Department of Atomic Energy (DAE) for exporting uranium to India.

Scanty rains has decreased the overall hydro power generation by 15 percent in February as projects are affected in North, West and Eastern region by falling water levels in rivers.

Lack of snowfall in North this year has already shrunk generation at country’s largest hydro power company, National Hydro Power Corporation by half in the month of February and also affected projects in of other power companies in North, West and Eastern.

Thermal Power

india’s coal import declines in April amid diversion to thermal power plants

A sales contract for enabling the transfer, which is part of the ongoing commercial negotiations between Australian uranium vendors and India’s DAE on fuel contracts for civil nuclear-power generation, is currently under discussion.

India’s coal import fell by 9 percent to 17.32 million tonnes (MT) in April 2018 on the back of ample supply of dry fuel from domestic sources.

Thermal Power

Coal India to enter power production, in talks with NTPC to form JV Addressing the problem of evacuating coal from remote locations to feed power plants, Coal India is embarking on power production itself, which it believes will help ease the high demand for thermal power in the country. This will mark Coal India’s maiden entry into thermal power generation.

Under this plan, Coal India’s subsidiary Mahanadi Coalfields Ltd (MCL) is in discussion for forming a joint venture (JV) with state-run NTPC Ltd to run the proposed 1,600 megawatt pit-head power plant in Odisha’s Sundergarh district.

“All formalities have been completed.

Forest clearance is in the advanced stage. Linkage was obtained. We have tied up with NTPC to run the plant. It will be a joint venture,” said Coal India’s Chairman and Managing Director Anil Kumar Jha.

“Coal import (all types of coal) in April 2018 stood at 17.32 MT (provisional), about 9 percent lower than 19.08 MT recorded for April 2017,” mjunction services, a joint venture between Tata Steel Ltd. and Steel Authority of India Ltd., said in a statement.

Import demand from thermal power plants remained low due to ample supply from domestic sources, mjunction CEO Vinaya Varma said, commenting on trends.

Imported uranium from Australia, as and when despatches start, would be used to meet fuel requirements of Indian nuclear reactors that are under International Atomic Energy Agency (IAEA) safeguards.

Thermal Power

Coal Ministry finalised the methodology for rationalisation of coal linkages for independent power producers The Ministry of Coal has finalised the methodology for rationalisation of coal linkages for independent power producers (IPPs), which will help in reducing transportation cost of coal and lead to savings in power generation. Now, IPPs will have the option to procure coal from a company other than the one with which they have signed the pact.

An inter-ministerial task force had made its recommendations on the methodology to optimise transportation cost, reduce power generation cost and eventually pass on the benefits to the end consumer.

As per the policy released May 16, 2018, “Coal linkage rationalisation shall be an exercise in which the coal linkage of a thermal power plant of an IPP may be transferred from one coal company to another based on the availability during the fiscal and future coal production plan of the coal company,” read the ministry’s statement. www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

7

NEWS UPDATES

Renewable News

Wind Power

Offshore winds could bring in a fresh spirit in the Indian renewable energy sector The recent announcement of India’s first offshore wind energy project has brought in fresh spirit in the renewable energy sector and the industry is on board to tap the huge potential that the offshore wind energy sector is claimed to have.

Renewable Power

India may miss solar, wind energy targets by 2022: Survey India may not achieve its renewable energy target of having 100 GW of solar energy and 60 GW of wind power by 2022, as per a survey conducted by a consulting firm Bridge to India.

India is expected to add total 66 GW of solar energy and 52 GW of wind power by March 2022 — which is 66 percent of 100 GW of solar and 87 percent of 60 GW wind targets set by the government, as per the 3rd edition of RE CEO Survey by Bridge To India said in a statement.

The survey found that the most pressing issue for the industry is safeguard duties, followed by uncertainty in overall policy environment and weak financial position of Discoms. However, it finds that despite these challenges, bulk of respondents are optimistic about the industry and overall growth prospects.

The National Institute of Wind Energy (NIWE), an autonomous body under the Ministry of New and

Renewable Power

WTO sets up panel to resolve dispute between India-US The World Trade Organisation (WTO) has set up a panel to resolve the dispute raised by India against the US with regard to the policies of eight American states in the renewable energy sector.

India had alleged that the domestic content requirement norms imposed by these eight US states are inconsistent with global trade rules. As both the countries failed to resolve the issue in the bilateral consultation process, India had sought formation of dispute resolution panel.

Renewable Power

Renewable energy outpaces fossils in India: Reports Though wind and solar are new entrants in the energy mix, investors today see renewable energy as less risky than fossil fuel energy, predominantly because of shortcomings that impact profitability of the fossil fuel energy sector in India.

According to reports, wind and solar energy in India are now outpacing fossil fuels as investment opportunities providing on average 12 per cent higher annual returns, 20 per cent lower annual volatility and 61 per cent higher risk-adjusted returns than coal and natural gas.

8

|

April - May 2018

|

Power Insight

|

Renewable Energy (MNRE), released a global Expression of Interest, to shortlist prospective offshore wind energy developers for a 1,000 MW offshore wind energy project in the Gulf of Khambhat, off the coast of Gujarat on the west coast of India.

www.vision-media.co.in

Solar Power

India scores new solar record with 4.6 GW of new large-scale solar installations in Q1 India witnessed its highestever solar power capacity addition in a quarter during the first three months of this year, government data shows.

India managed to add 4.6 gigawatts of new utility-scale solar power capacity between January and March 2018. The previous highest solar power capacity addition in a quarter was seen exactly one year back in Q1 2017 with the addition of 3.3 gigawatts. The high solar power capacity addition was a direct result of the busy auction schedule India has seen at the central as well as the state levels in the last few quarters. As India continues to auction gigawatts of new solar capacity every month, this record could easily be surpassed in the coming quarters.

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

9

NEWS UPDATES Solar Power

Solar Power

Rajasthan aims 3,780 MW solar capacity by April 2019

Government set to seek an addition of 20 GW of solar bids

With 20 projects of 1,500 MW capacity in pipeline, Rajasthan is targeting to increase its solar power generation to 3,780 MW

by April 2019 in order to achieve the goal of 7,000 MW clean energy capacity in the next four years.

According to media reports, the government is ready with tenders for an addition of 20 GW solar power, with the successful bidder mandated to have production facility to manufacture nearly half the equipment requirement.

“The current solar power generation is contributing 10 per cent to the total power consumption in the state and we are targeting to increase it to 17 per cent by 2021,” Rajasthan Renewable Energy

Corporation Managing Director B K Doshi said.

He added that solar power installation capacity in the state has reached to 2,280 MW by March this year and 20 projects of total 1500 MW are under pipeline and will be commissioned and start generating power by April next year.

Solar Power

India’s solar capacity addition likely to drop 40 percent in 2018-19: ICRA

The generation capacity is proposed to be added over the next three years and is one of the most ambitious programmes undertaken by the government so far, as it seeks to ramp up renewable energy production in the country from around 70 GW

India’s solar power capacity addition is likely to drop 40 percent to a range between 4 GW and 4.5 GW in the current financial year, research and ratings agency ICRA has said.

Girishkumar Kadam, Sector Head and Vice President at ICRA stated that the estimated fall in capacity addition in the current fiscal is mainly on account of subdued trend in tendering of solar projects since June 2017 in the midst of several factors such as GST roll out in July 2017, an upward pressure on PV module price levels internationally and continued uncertainty on safeguard duty and anti-dumping duty post the petitions filed by solar module manufacturer associations between June and Dec 2017.

Solar Power

India’s first industrial solar microgrid commissioned in Gujarat ABB has commissioned India’s first industrial solar microgrid at its Vadodara manufacturing facility in Gujarat.

The microgrid’s rooftop photovoltaic field and its battery-energy storage system will support the factory’s productivity and enable green power supply. The facility’s carbon footprint is expected to be reduced by around 1,400 tons of carbon dioxide per year.

10

to around 225 GW in four years.

The first tender is ready to be issued and addresses concerns related to domestic manufacturing that resulted in India being pulled up at the WTO after the US lodged a complaint at the multilateral agency.

Wind-Solar Hybrid

MNRE’s program to set up 2.5 GW ISTS-connected wind-solar hybrid projects approved

Microgrids with integrated battery energy storage allow cutting down of planned and unplanned power outages.

A key benefit is the reduction in overall operational costs and reduced electricity bills.

The Ministry of New and Renewable Energy (MNRE) has announced that the President has approved the proposed program to set up 2.5 GW of inter-state transmission system (ISTS)-connected wind and solar hybrid projects across the country on build own operate (BOO) basis.The Solar Energy Corporation of India (SECI) has been appointed as the nodal agency for the implementation of this program.

ABB India Managing Director Sanjeev Sharma said that a reliable, resilient and cost-effective power supply through microgrids is key to achieve Make in India targets, speed up industrial development and realize the vision of roundthe-clock power for all.

The main objective of the program is to provide a framework for promotion of large grid connected wind-solar PV hybrid system for optimal and efficient utilization of transmission infrastructure and land, reducing the variability in renewable power generation and achieving better grid stability. The program also aims at encouraging new technologies, methods and way-outs involving combined operation of wind and solar PV projects. The developers will be selected through reverse bidding and SECI will enter 25-year PPAs with the developers.

|

April - May 2018

|

Power Insight

|

www.vision-media.co.in

India‘s Most Pioneering Solar Exhibition and Conference Twice a Year Serving Two Key Markets!

NEW IN BENGALURU, KARNATAKA, INDIA! BANGALORE INTERNATIONAL EXHIBITION CENTRE

Exhibit in Bengaluru – the capital city of India’s Silicon Valley, technology hub and one of the top solar markets!

Secure your best booth position to connect with more than 17,000 business professionals from more than 55 countries!

PV meets energy storage and electric mobility – Benefit from cross-sector opportunities!

Establish new powerful b2b partnerships and get in touch with investors at Intersolar’s Buyer Seller Forum!

with special exhibitions

GET THE BEST OF THE WEST – SAVE THE DATE FOR: Intersolar India in Mumbai, April 4–5, 2019

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

11

NEWS UPDATES Power Transmission

T&D News

CERC norms for RE projects positive, need adequate transmission infra: ICRA

Power Transmission

Sterlite Power aims to grow India Grid’s AUM to INR 30,000 crore by FY22 Sterlite Power, which sponsors the India Grid (IndiGrid) infrastructure investment trust, aims to grow the latter’s assets under management to INR 30,000 cr

by FY22. With five operating power transmission assets from Sterlite and a scheduled 46 percent stake purchase in Patran Transmission Co Ltd, the trust’s AUM will be roughly INR 6,000 cr by the end of June.

“We are one full year ahead in assets under management that we had forecast in our IPO,” Pratik Agarwal, CEO of IndiGrid and group CEO, Sterlite Power, told a financial daily. “When we integrate all of Sterlite Power’s existing assets into IndiGrid, the AUM will touch INR 20,000 cr.

The remaining INR 10,000 cr of our target will either come from the sponsor or IndiGrid will acquire it independently.”

Power regulator CERC’s norms on inter-state connectivity for renewable energy (RE) projects are a positive for developers but adequacy of transmission infrastructure is critical, rating firm ICRA said. The CERC, on May 15, notified the procedure for grant of connectivity to RE-based projects proposing to use the inter-state transmission system (ISTS).

Appointments

Anil Sardana appointed as head of Adani Transmission Limited Adani Transmission Ltd has appointed Anil Sardana as the Managing Director and Chief Executive Officer of the company with effect from May 1, 2018.

Sardana, former MD and CEO of Tata Power Group, holds an honours graduate in Electrical Engineering from Delhi University and also a PGDM from All India Management Association and carries with him over three decades of experience in the power and infrastructure sector.

Gautam Adani, Chairman, Adani Group, commented, “Anil Sardana joins us at a critical phase when the company has entered the power distribution space with the acquisition of the Mumbai GTD business.”

Power Transmission

Adani Transmission ties up INR 13,250 crore of funds to buy Reliance Infrastructure assets Adani Transmission has achieved financial closure for the purchase of Reliance Infrastructure’s power generation and distribution business in Mumbai. According to media reports, the company has arranged for the financial closure for INR 13,250 crore through a consortium of banks led by State Bank of India (SBI). The deal marks Adani Transmission’s foray into the power distributions business, and will also help Reliance Infrastructure to pare its outstanding debt of about INR 15,000 crore. Gautam Adani said: “We see the distribution sector as the next sunrise sector as India embarks on its mission to achieve 24×7 power for all. We see a massive growth opportunity and will look at both organic and inorganic opportunities to build a market-leading distribution company.”

12

|

April - May 2018

|

Power Insight

|

ICRA said that uncertainty on availability of adequate infrastructure to evacuate power from the wind power projects bid out by SECI over the past 15 months persists, given that the existing inter-state transmission infrastructure in the states with high wind potential may not be sufficient to provide connectivity to the 5.1 GW bid out by SECI so far.

www.vision-media.co.in

Power Transmission

Every single village now has access to electricity: Narendra Modi The government has started supplying electricity to every village in the country, Prime Minister Narendra Modi announced, a tall achievement that now shifts attention towards improving the quality of supply and connecting every household to the grid. Villages were earlier deemed electrified if a power line reached the area.

However, the definition has been changed now.

A village is now considered electrified only if the Gram Panchayat certifies that the basic infrastructure has been provided to the inhabited area, including Dalit hamlets, and 10 percent of the households are electrified, according to Central Electricity Authority (CEA).

ANSALI GROUP BH OVER Years of Quality, Innovation and Reliability

75

Profit from our cables.

Become our dealer.

Whether power or telecom, household or IT, industrial or broadcast, OEM or after-market, you can always rely on Bhansali cables for sustained performance. No wonder then that you are always a winner with our quality. So, go ahead and switch to Bhansali.

A-38/4 Mayapuri Industrial Area Phase I, New Delhi 110 064 +91 11 28113664/65 • info@bhansali.net • www.bhansali.net

LOOKING FOR GROWTH OPPORTUNITIES? BECOME OUR DEALER IN UNREPRESENTED AREAS. CONTACT US TODAY!

13

Single/Multi Core Flexible Wires • House Wires • Telephone & Switchboard Cables CCTVInsight Cables •| Co-axial Cables • LAN www.vision-media.co.in | •Power April - May 2018 | Cables Instrumentation Cables • LT Power & Control Cables • Solar Cables • Submersible Cables • Speaker Cables

NEWS UPDATES Power Distribution

Power Distribution

UDAY misses out on operational targets set for FY17

IEX, JEPX tie up to explore opportunities in electricity market

Uday has been instrumental in reducing Discom losses by INR15,906cr from FY16 to FY17. However, most states have missed operational targets set for the end of FY17. Out of the 31 states who are participating in UDAY, only six states and one Union Territory had met their targets for FY17.

Gujarat, Himachal Pradesh, Karnataka, Tripura, Uttarakhand, Goa and Puducherry were the only states able to meet their AT&C loss targets.

At the end of FY17, the AT&C loss stood at 20 percent with the ACS–ARR gap standing at 0.43 per unit. Without Discoms meeting their operational targets it would be hard for them to sustain the reduction of losses going forward.

Power Distribution

CERC proposes major change in tariff structure from FY19

Indian Energy Exchange (IEX) and Japan Electric Power Exchange (JEPX) have tied up to jointly explore opportunities for a cooperation in electricity market.

The scope of a memorandum of understanding (MoU) includes opportunities for training to augment the electricity trading through competitive market platforms by organising knowledge sharing programmes, an IEX statement said.

These initiatives would help both

The Central Electricity Regulatory Commission (CERC), has proposed to introduce a ‘three-part tariff’ structure from the existing ‘two-part’ regime. The regulator has suggested the changes in the recently launched approach paper for the tariff period between FY19-24.

Power Distribution

The new proposed design wants to introduce a “variable charge” component, which would provide incremental return above guaranteed return and balance operation and maintenance expenses. The variable component could be linked to the difference between availability of the power plant and the quantum of electricity it has dispatched.

EV charging stations don’t need separate license under Electricity Act: Power Ministry The government clarified its position on electric vehicle charging stations and has said that a separate license will not be required under the Electricity Act 2003 for setting them up. The Power Ministry’s logic is that the electricity supplied to the station has been converted to chemical energy when the vehicle charging occurs. So it is no longer in the form of electrical energy and the service of charging a vehicle does not mean sale of electricity.

Policy

Electricity regulatory commissions must have a judicial member: Supreme Court The Supreme Court ordered that one of the members of electricity regulatory commissions should be a person of judicial background, quashing orders of various high courts that the chairperson of such bodies in states should be a high court judge. The top court also said the judicial member should be part of the quorum in adjudicatory matters.

An official statement said, “The charging of battery of an electric vehicle by a charging station involves a service requiring consumption of electricity by the charging station and earning revenue for this purpose from the owner of the vehicle. The activity does not in any way include sale of electricity to any person as the electricity is consumed within the premises owned by the charging station.”

14

|

April - May 2018

|

Power Insight

the organisations in elucidating the electricity markets and in learning the laws and rules pertaining to electricity trading in both countries. The agreement was signed on March 28, 2018.

The union government has yet to ascertain whether last week’s verdict will apply to the Central Electricity Regulatory Commission as well, sources said.

“Section 84(2) of the said (Electricity) Act is only an enabling provision to appoint a high court judge as a chairperson of the state commission of the said Act and it is not mandatory to do so,” the verdict said The judgment will apply prospectively and not affect the orders already passed by commissions from time to time.

|

www.vision-media.co.in

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

15

Special FEATURE

Special Feature

R&M - Thermal Power Plant

Striving for Efficiency The renovation and modernisation (R&M) of coalbased thermal power plants (TPPs) is not only required to improvement of plant efficiency and safety and reliability of the operation. It is also crucial from an environmental and an economic perspective...

H

igh capital expenditure related to new capacity augmentation, poor financial health of the utilities, growing environmental concerns, falling plant load factor (PLF), maximising generation from the existing power stations and emerging fuel constraints necessitate efficiency improvement of the existing power stations in the country. Renovation and Modernization (R&M) of thermal power plants plays a critical role in restoring the power station’s rated capacity and reducing coal consumption, and is one of the most cost effective options to achieve additional generation in a short gestation period.

Thus, the main objective of R&M of power generating units is to make the operating units equipped with modified and latest technology equipment /components / systems with a view to improve their performance in terms of output, reliability and availability to the original design values, reduction in maintenance requirements, ease of maintenance and enhanced efficiency.

It is to be noted that R&M is not a substitute for regular annual or capital maintenance /overhaul which forms a part of Operation and Maintenance (O&M) activity.

16

|

April - May 2018

|

Power Insight

|

www.vision-media.co.in

Special FEATURE

Need for Mid-life R&M come up generally after 1,00,000 hrs of operation.

Need for R&M As the design life of a thermal power plant (TPPs) is typically 25 years. Operating plants beyond their economic life generally needs a refurbishment to ensure compliance to the environmental stipulation, improvement in plant efficiency along with safety and reliability of the operation.

Current Scenario

The R&M programme is primarily aimed at overcoming problems due to generic defects, design deficiencies / modifications, avoidance of inefficient operation, non-availability of spares because of obsolescence of equipment/components or major replacements of equipment arising due to unforeseen failures and /or generation sustenance not covered under regular O&M, stringent environmental regulation and safety requirements etc.

In India, the R&M programme for thermal power units were initiated around mid eighties in order to improve their performance. In addition, as per the National Electricity Policy, 2005, TPPs that are performing below acceptable standards should undergo R&M as per well-defined plans featuring a necessary cost-benefit analysis. However, despite of its numerous benefits, the pace of implementation of R&M in the country has been rather slow – so far.

R&M entails minimal rehabilitation and resettlement (R&R) issues. In thermal power plants, R&M improves the heat rate, reduces auxiliary consumption, lowers emissions and ensure optimal fuel utilisation.

Operating plants beyond their economic life of 25 years generally needs a refurbishment to ensure compliance to the environmental stipulation, improvement in efficiency and safety & reliability of the operation......

www.vision-media.co.in

The Central Electricity Authority (CEA) identified a total of 135 thermal power units with an aggregate capacity of 29,367 MW for R&M and life extension (LE) during the period of 2012-17. However, of these, works for only 37 units totalling 7,202.26 MW were completed during the period. Going forward, R&M and life extension (LE) works for 64 units aggregating 14,705 MW are being considered for the 2017-22 period. |

Power Insight

|

April - May 2018

|

17

Special FEATURE

prove generation, minimise inefficiencies and extend the life of the plants.

Moreover, R&M is required for minimising emissions from the existing fleet of old TPPs, thus ensuring compliance with environmental norms. The CEA has also implemented a year-wise flue gas desulphurisation (FGD) phasing and electrostatic precipitator (ESP) upgradation plan, in view of the environmental norms notified for thermal power stations. As per the plan, a total of 415 and 231 units will be taken up for FGD phasing and ESP upgradation, respectively, during 2018-22.

According to the CEA’s data, around 32,830 MW of capacity had been operating for more than 25 years, as of March 31, 2015. Of this, around 5,860 MW was considered for retirement in a phased manner while 4,800 MW was taken up for R&M. Given that a large number of generating units are old

Since large number of generating units are old and have outlived their designed life, R&M and life extension (LE) works for 64 units aggregating 14,705 MW are being considered for the 2017-22 period......

The renovation and modernisation (R&M) of coal-based thermal power plants (TPPs) is crucial, both from an environmental and an economic perspective.

and have outlived their designed life, R&M has been recognised as a costeffective option to restore the rated capacities of these plants. It helps im-

18

|

April - May 2018

|

Power Insight

The government has also taken various steps in this regard such as monitoring of R&M and LE works by the Central

|

www.vision-media.co.in

Electricity Authority (CEA), providing technical inputs through the CEA and NTPC to the concerned power utilities, making funds available in the form of loans through the Power Finance Corporation and the Rural Electrification Corporation, and extending external cooperation for assistance in terms of technology and finance.

Challenges Though, there is a huge market opportunity across the R&M value chain, the pace of R&M works at coal-based plants has been rather slow. Ever since its initiation in 1980s, the R&M market continues to face a variety of challenges and issues that have impeded market growth and scale up plans.

Time & Cost Overrun: One of the major problems observed is delay in execution of R&M works. As per guidelines, the shut down period required to carry out the R&M works in the plant is scheduled six to eight months. However, according one study conducted by the CEA, it was noted that the actual plant shutdown period for R&M works varies from 13 to 30 months resulting in cost overruns.

To avoid this time and cost overruns, the necessary preparations for mate-

Special FEATURE

rial/ equipment procurement need to be made in advance. In addition, DPRs should be prepared on the basis of residual life assessment studies so as to prevent technical faults during R&M works.

High Contractual Risk: Many a time weak defined scope of the commercial contract shifts the risk substantially to bidders. In addition, high level of guarantees that results into unfair balance of risk-reward and in turn high price of

Lack of Integrity: It has also been observed that in many cases contractors/subcontractors abandon their work midway. To address this problem, utilities have made provisions for liquidated damages for delays in the completion of work at the chargeable rate of 0.25 per cent per week of the contract value. Looking at the prevailing scenario, it becomes imperative that project management guidelines for R&M works should be identified, defined and standardised.

project performance. Despite various roadblocks, R&M offer potential solutions for improving power plant performance in a cost-effective manner.

Way forward Although R&M is a technologically and economically viable option to overcome technological obsolescence and achieve optimum power generation – it has been noted that there has been lack of interest to take up R&M from state utilities due to various reasons.

Regulators in each state need to design incentive and enforcement mechanisms that encourage utilities to undertake R&M of their inefficient and old plants. It is also important to encourage competition by awarding R&M projects through fair, transparent and competitive mechanisms along with encouragement to public-private partnership models for R&M - so as to develop the market.

Poor O&M Practices: Further, it has been seen that O&M practises being followed by state owned generation companies in India are weak. Most of the state owned generating companies do not adhere to the schedule of annual maintenance and periodic capital overhaul of the plant leading to deterioration in the condition and performance of the plant.

Poor O&M practises in most state owned generating companies by not adhering to the scheduled maintenance can offset the expected efficiency gains of a successful R&M project before the stipulated extended life of the plant...... the project.

Further, sometimes guarantees are asked for the entire plant/system while the works have to be implemented on certain components of the plant altering the risk profile of the contractor’s substantially.

There exist a significant potential for efficiency improvement of thermal power plants in the country (the world average of coal power efficiency is ~35.1%1 as compared to ~31% in India) which is largely contingent on the use of advance technology for new capacities and improvement of efficiencies in the existing capacity.

Poor O&M practises can offset the expected efficiency gains of a successful R&M project before the stipulated extended life of the plant.

The need of the hour is to understand the overall market dynamics; assess key challenges impeding market growth and hence suggest way to strengthen market interest. n

In addition, the poor financial health of state discoms, and lack of appropriate regulatory incentives to undertake R&M have an adverse impact on R&M www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

19

The T Weekest Link

he power sector in India has witnessed admirable improvements over the last few years across the entire value chain, from fuel supply to generation, transmission and consumption. Still, the weakest link in the value chain is distribution, wherein Discoms (power distribution companies) in the country accumulated losses of about INR 3.8 lakh crore and outstanding debt of about INR 4.3 lakh crore in 2014-15, with interest rates upto 14-15 percent.

The distribution segment in India has remained as the weakest link in the Power sector value chain since decades, however the government of India has taken some proactive measures in recent years to save the Discoms trapped in a vicious cycle with operational losses and being funded by debt...

20

|

April - May 2018

|

Power Insight

|

www.vision-media.co.in

Distribution is the most important link in the entire power sector value chain and being only interface between utilities and consumers, it is the cash register for the entire sector. Under the Indian Constitution, power is a concurrent subject and the responsibility for distribution and supply of power to rural and urban consumers rests with the states.

Sector Overview Due to legacy issues, the distribution segment has continued to wrestle with an array of challenges including untimely tariff revisions, high network losses, and poor billing and collection efficiency resulting in high accumulated losses.

Resultantly, distribution company’s (DISCOMs) have built up huge pile of debt ~INR 4.3 lakh crore as on Mar-2015. Since, the poor financial health of DISCOMs impacted their power off take ability; it adversely affected the performance of the country’s generation segment

Sector FOCUS

due to technical reasons can be minimised by using latest technology and modern equipment for transmitting and distributing electricity.

resulting in increase in stressed assets in the sector. Thus, looking at the distressed situation of the country’s power distribution sector, the Government of India (GoI) in November 2015 launched Ujawal DISCOM Assurance Yojana (UDAY) with an objective of financial turnaround of DISCOMs and to improve their operational and financial efficiencies.

The Discoms sector in India has been witnessing poor financial and opera-

At the commercial level, the losses incurred can be managed by resisting the pressure to provide electricity for free to certain groups; pricing the electricity by taking into account the input, production, transmission and distribution cost along with a healthy profit and not based on political expediency; and reducing the cases of electricity thefts by unscrupulous people or entities.

Prevailing Ailment The challenge before the union government has been to create a reliable and sustained power generation and distribution mechanism in the country such that adequate, affordable and consistent electricity supply can be made available to all the private citizens together with the key sectors of the economy - agriculture, manufacturing and services - which in turn would ensure a healthy and continued growth in all the three sectors.

through various Central Sector / centrally sponsored schemes such as IPDS and DDUGJY. However, the financially strained Discoms failed to supply adequate power at affordable rates, thus schemes which aim at 100% village electrification, 24X7 power supply and clean energy etc cannot be turned into reality without financially strengthening the Discoms first.

The Discoms sector suffer losses on account of below average quality of network infrastructure or commercial reasons on account of subsidised pricing, electricity theft, inefficient billing and collection. ....... tional health since decades. Discoms suffer losses either due to technical reasons on account of below average quality of network infrastructure or commercial reasons on account of subsidised pricing, electricity theft, inefficient billing and collection. Losses

This realisation paved the way for the union cabinet, chaired by Prime Minister Narendra Modi, to give its approval to a new scheme in November 2015 -- Ujwal Discom Assurance Yojna or UDAY - moved by the power ministry.

UDAY was launched in November 2015 and the last date to join the scheme was March 31, 2017 - in order provides for the financial turnaround and revival of Discoms. Under the scheme,

Thus in order to assist distribution utilities in improving operational efficiency and to undertake network expansion and modernisation, the Government of India provides assistance to states

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

21

Sector FOCUS the states completed the takeover of their respective discoms’ debt in March 2017. Meanwhile, bonds worth INR 2.32 trillion (addressing 86 percent of the debt envisaged to be taken over under UDAY) have been issued. As of August 2017, bonds worth INR 370 billion remain to be issued, which were scheduled to be done in due course.

Growth & Performance The good news is that a notable progress has been recorded resulting in overall improvement in the discoms operational performance. For one, the level of AT&C losses (for the 26 states and the union territory of Puducherry participating in UDAY) declined from 21 per cent in FY16 to 20 per cent in FY17 resulting in INR 17,000 crore reduction in book losses.

Further, the gap between the average cost of supply (ACS) and average revenue realised (ARR) reduced from INR 0.59 per unit in FY16 to Rs. 0.40 per unit in FY17 resulting in an estimated saving of INR 4000 crore and is continuing on its declining trend.

In addition, there were around 24,921 feeder meters installed and an increase in

22

|

April - May 2018

|

Power Insight

|

www.vision-media.co.in

billed energy from 694 BUs* in FY16 to 762 BUs in FY17 has been recorded during the period.

On September 25, 2017, the government has launched yet another scheme called the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) with the aim of electrifying all households by December 2018.

However, there are several issues that still plagues the sector including inadequate tariff revisions in various states and low power demand from the discoms and need to be seriously tackled.

Way forward: With power demand expected to surge in the coming years, power distribution reforms are likely to remain high on the government’s agenda as evident from the recently launched Saubhagya scheme. While the improvement in operational efficiency has been slower than targeted, it is still remarkable considering the dismal performance of the distribution segment in the past.

Going ahead, the MoP is preparing a long-term distribution perspective plan. Under this, the Central Electricity Authority will determine the infrastructure and investments required by the discoms on an annual basis till 2021-22. Other focus areas include open access, separation of carriage and content, rationalisation of tariffs, and reduction in subsidies.

Overall, the segment is likely to have a bright future provided that government initiatives are implemented in a timely and effective manner. n

Sector FOCUS

UDAY

F

or many decades, India’s electricity distribution sector has been in complete mess because of states turning blind eyes to the wrong doing of this sector. State DISCOM’s have been supplying electricity at tariffs that are far below cost. For obvious political reasons, States have been wary of revising power tariffs in line with rising costs. Inefficiencies in power distribution such as large transmission and distribution losses on power, have further strained the finances of the DISCOM’s, who have been borrowing heavily from banks to keep themselves running. As a result, the loss-making DISCOM’s piled up a massive load of debt on their books; it totalled INR 4.8 trillion in September 2015. According to the power ministry, distribution utilities lose INR 64,000 crore (INR 640 billion) every year.

A right step towards fixing the leaking bucket of discoms; but a lot needs to be done...

The initial assessment of UDAY scheme suggests that both financial outcome and operational efficiency of reduction in AT&C losses have improved at an aggregate level. However, majority of discoms have failed to meet their operational efficiency targets ...

With no finances in hand and drowning deep in debts – it becomes next to impossible to supply adequate power at affordable rates. Thus, the only practical way for DISCOM’s to stay operationally afloat was to aggressively use load management (power cuts) to control purchases. This means that vast parts of the world’s third-largest economic power go without electricity for more than half the day hampering the quality of life and overall economic growth and development.

UDAY Scheme To improve the situation, a Scheme “UDAY” (Ujwal DISCOM Assurance Yojana) for financial turnaround of Power Distribution Companies has been formulated and launched by the Government on 20th November, 2015 in consultation with the various stakeholders for the financial and operational turnaround of DISCOMs and to ensure a sustainable permanent solution to the problem.

Under the scheme, States will take over threefourths of the debt of their respective discoms. The governments will then issue ‘UDAY bonds’ to banks and other financial institutions to raise money to pay off the banks. The remaining 25 percent of the discom debt will be dealt within one of the two ways — conversion into lower interest rate loans by the lending banks or be funded by money raised through discom bonds backed by State guaran-

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

23

May 2018

ENABLING DISCOMS Sector FOCUS BECOME SUSTAINABLE tee. Backing from the State will help bring down the interest rate for the discoms.

UDAY AT A GLANCE 19 PAISE /KWH

In return for the bailout, the discoms have been given target dates (2017 to 2019) by which they will have to meet efficiency parameters such as reduction in power lost through transmission, theft and faulty metering, installing smart meters and implementing GIS (geographic information system) mapping of loss making areas. States will also have to ensure that power tariffs are revised regularly.

Reduction in ACS-ARR Gap from Rs. 0.59 / kWh to Rs. 0.40 / kWh (FY16 vs FY17)

~INR 17,000 Cr.

21% TO 20%

~INR 4,000 Cr.

Decrease in AT&C Losses during UDAY period (FY16 vs FY17)

24,921 FEEDER METERS INSTALLED

-51,590 -34,656 -14,833

FY16

FY17

9M FY18

Thus, the process of States taking over the targeted debts and issuing them as SDL Bonds has now been completed. As of now, the participating DISCOMs have to issue Bonds worth approximately INR 37,000 Crores, which would be done in due course.

Rest of the debt with DISCOMs is mostly in the nature of CAPEX debt, which pays for itself, or Scheme based debt, which converts into grants fully or partially.

Thus, they are not required to be taken over by the States.

different point of time, with the majority (17 states) of them joining in FY17, the time elapsed by then until now is too short to assess the success of the scheme.

Further, as per the initial assessment of UDAY scheme suggests that both financial outcome and operational efficiency of reduction in AT&C losses have improved at an aggregate level.

However, with DISCOMs actively feeding data on to the UDAY portal some positive outcomes have emerged and are encouraging. Participating States of UDAY have taken over the targeted debt of INR 2.09 trillion of their DISCOMs under borrowing exemption from the FRBM Act given in UDAY for the years 2015-16 and 2016-17.

AT&C loss: National average (all UDAY states) of AT&C loss has come down to 20.1% in FY17 from 21.1% in FY16. Total 11 states have reduced their AT&C loss from FY16 level. Under the initiatives of UDAY, continuous focus has been given on billing and collection efficiency of Discoms. At all India level, billing efficiency has increased by ~2%

Power Insight

0.40 0.28

FY16

FY17

9M FY18

# Total ex-bus power available (excluding import/export and auxiliary consumption) in 2016-17: 1135 BUs; Source: LGBR 2017-18, CEA; The difference between ex-bus energy generation & net billed energy is majorly on account of transmission & distribution losses, energy transaction by open access consumers & consumption by non-UDAY states

DISCOMs actively feeding data on to the UDAY portal some positive outcomes have emerged and are encouraging - however the time elapsed until now is too short to assess the success of the scheme.. ......

|

0.59

Source: UDAY portal * As per PFC report 2015-16

Since different states joined UDAY at a

April - May 2018

ACS-ARR Gap (Rs./kWh)

Book losses (Rs. Cr)

Increase from 694 BUs* # to 762 BUs (FY16 vs FY17)

Performance Review

|

Estimated savings

BILLED ENERGY

It is evident that the INR 10,000-crore (INR 100 billion) ‘Montek Bonds’ of 2002 and the INR 2-lakh-crore-plus Financial Restructuring Package for DISCOM’s of 2012 were not accompanied by proportionate changes in the efficiencies of the DISCOM’s. While, UDAY seeks to empower loss making DISCOM’s to break even in two-three years by helping the DISCOM’s in improving their operational efficiencies.

24

Reduction in book loss

|

www.vision-media.co.in

from 81% in FY16 to 83% in FY17.

Power purchase cost: Power purchase cost has reduced in 6 states. At overall level, the cost has reduced from Rs. 4.20 per unit in FY16 to about Rs. 4.16 per unit in FY17. These states have adopted various measures to optimize the input cost. Some of which are as following: n Andhra Pradesh, Bihar, Haryana and Gujarat have significantly increased procurement of cheaper power from Power Exchanges (IEX and PXIL) n Almost all the states have followed Merit Order Dispatch (MOD) methodology for power procurement and surrendered costlier power n Cost of generation of few plants have reduced due to reduction in use of imported coal (few state gencos of above states and few NTPC plants) n Few generating stations have reduced fuel transportation cost by using “All Rail Route” (e.g. Andhra Pradesh) and linkage rationalization (Haryana state plants, few NTPC plants) Interest cost Benefits: One of the major elements incorporated to boost the financial turnaround of the distribution utilities under UDAY is the finan-

Sector FOCUS

SBPDCL, Bihar (from 46% to 40%). In addition, marginal improvements (13%) have been noticed from Chhattisgarh, Rajasthan, Karnataka and other UP Discoms. With increased sales to industrial and non-domestic segments and moderate cross-subsidy, subsidy dependence of the states may reduce further.

expected that these benefits shall continue and further improve in future and provide a sustainability to the distribution utilities. Gap between Average Cost of Supply (ACS) and Average Revenue Realized (ARR) has reduced in 12 states. At overall level, the gap has reduced from 59 paisa per unit in FY16 to about 46 paisa per unit in FY17.

cial re-engineering of the debt of the distribution companies to eliminate the legacy burden. As stated, Governments of 16 States have taken over of around INR 2.09 lac cr debt of the distribution companies as per terms of UDAY MoU. Such loans were running at interest rates of around 1112% p.a., which shall now be serviced by the States at rates ranging from 7%-8.5%.

Conclusion Though, improvements are seen on the two crucial measures of performance of discoms – in reducing the gap between average cost of electricity supplied and the average revenue realisation and reduction in ‘aggregate technical and commercial’ (AT&C) losses. It helped reducing Discom losses

by INR15,906 cr from FY16 to FY17.

While Gujarat DISCOMs are maintaining positive bottom-lines, Haryana, Chhattisgarh and Himachal Pradesh DISCOMs are on the threshold of turnaround. Rajasthan DISCOMs have reduced their book loss by ~70%.

DISCOMs of Andhra Pradesh, Telangana, Tamilnadu, Maharashtra, and Assam have reduced their book losses.

With increased focus on loss reduction

However, most states have missed operational targets set for the end of FY17. Out of the 31 states who are participating in UDAY, only six states and one Union Territory had met their targets for FY17. Gujarat, Himachal Pradesh, Karnataka, Tripura, Uttarakhand, Goa and Puducherry were the only states able to meet their AT&C loss targets.

The savings accrued to DISCOMs on account of interest benefits due to reduction in interest burden by 3-4%, takeover & restructuring works out to Rs. 15000 crores approximately by March, 2017....

Further a few DISCOMs have also restructured their balance loan portion at reduced rates, which will also reduce the interest burden by at around 3%-4%. The savings accrued to DISCOMs on account of interest benefits due to above, takeover & restructuring works out to INR 15000 crores approximately by March, 2017.

ACS-ARR Gap: The reduction in ACSARR Gap is the combined effect of savings in interest cost, power purchase cost, tariff rationalization, better billing/collection efficiency etc. and it is

and financial discipline, book losses are expected to come down further in coming years.

However, the long-term success of UDAY will come only from “structural changes aimed at bringing down AT&C losses and improvement in billing and collection efficiency. Without Discoms meeting their operational targets it would be hard for them to sustain the reduction of losses going forward. n

Twelve (12) Discoms have reduced subsidy dependence (subsidy booked/ Total revenue) from last year. Till March 2017, major improvements have been noticed from APEPDCL (from 10% to 2%), DVVNL, UP (30% to 17%) and

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

25

Sector FOCUS

EMERGENCY RESTORATION SYSTEM ERS Tower - a solution that helps in reducing the outage time of transmission line...

Column By : Mr. P. Barua - Supreme & Company Limited

A

s a manufacturer of transmission towers and electrical hardware, we have been working for the last three years on developing a product which will make a big impact in the transmission line sector. The most important aspect of transmission line is to provide continuous and reliable power. But, these lines are subjected to several natural disasters like earthquake, flood, landslides and hurricanes.

Power failure due to these scenarios make a severe financial damage to consumers, utilities and the power producing units. It is necessary that these transmission line utilities take precautionary actions to avoid and reduce these disruptions. Further, in order to address the increasing power demand, utilities are uprating their lines by reconductoring. However, this is problematic as the shutdown required for reconductoring cannot be provided as those lines are already invariably overloaded.

We planned on developing a solution which will help in reducing the outage time of transmission line. This led to the development of ERS Tower, an indigenous prodLive line from existing to ERS tower uct of Supreme. It is a temporary structure designed to bypass the existing transmission towers of any voltage in any terrain.

They will be used until the main line is reconductored or restored. The entire structure can then be disassembled and reused. Only a small outage will be required to bypass the main line to ERS. The unique feature of Supreme ERS is that they are made of High Strength Steel. The fully standardized fabrication process of High Strength Steel has made it an economical, functionally reliable and structurally stable option. The savings due to reduced outage time far outweighs the cost of such ERS which is now substantially reduced with the use

26

|

April - May 2018

|

Power Insight

|

of steel. The entire design is made in such a way that the whole structure can be erected in few hours. Sections are made modular in order to ease transportation as the site may be very remote to carry the structure. There is no need for any civil foundation. Erection is made ease with the usage of Gin Pole which obviates the need of heavy machineries. Use of composite insulated cross arm will reduce the crossarm load on the structure and also the clearance required for insulator swing.

The tower is entirely supported using guy wires. Hence it is essential that all the guy wires are properly anchored

ERS with Insulated Crossarm

Live line between two ERS tower

to the soil. In a conference organized by CBIP, TATA Power published a work where they mentioned that they were unable to use a temporary structure for restoring the line because of the marshy soil condition which will not be able to take the mechanical load of the structure. Our team took this as a challenge and developed different kind of anchors that would support the structure in all soil conditions.

Our first project was to bypass an existing 132-kV transmission line in order to facilitate the construction of a nearby flyover. A line length of 1800 circuit metres, which passes through a residential and heavily crowded commer-

www.vision-media.co.in

Sector FOCUS

Flyover and River Crossing

cial area in Sector 2 of Vaishali, was at standstill and lying abandoned after completion of foundation works since January 2017 and waited for a shutdown for a minimum of 10 days, for completion of erection of 2 Nos. Multi-circuit Towers and stringing to follow.

There were several 11kV and 33kV along the line which was the major challenge for us at the time of stringing.

The line was serving a large number of people and hence getting shutdown for bypassing the line was very difficult.

UPPTCL provided the required shutdown, five days after the structure erection. After complete installation, there was a severe hailstorm but the tower withstood the same without any damage to it. The bypass line was in charged state for a month serving the utility’s customers who didn’t have to undergo suspension of service. This new experiment played a significant role in promotion of line uprating by re-conductoring of old lines without necessitating the need for new ROW. The key thing to be noted is that this is the first ever bypass arrangement made by an Indian Manufacturer on a High Voltage Transmission Line.

helped in completing a project which would evacuate 580 MW line where substantial investment was already made on 98% stretch of the line and associated substation would have remained idle for indefinite period.

With the success of our previous projects on our back, we were given a job of restoring an abandoned 400kV Quad

Modular Supports for Anchoring

We were again given an opportunity by UPPTCL to bypass a 132kV line which was an hinderance for the completion Double Circuit line in Eastern India. The double circuit line was transferred to 3 sets of ERS tower with two towers in each set thereby forming a double circuit. There was no road access to the site. Survey and even transportation of materials to site was made using country boats. Rowing the boat with tower materials was difficult as the river current was increasing as the day progress.

Workers traveling on country boats to reach site

of a 400kV line. This project was also quite challenging as the line route was having a flyover, river and a highway crossing. The project was executed in four days with only a line shutdown of 4 hours. We achieved a challenging feat of taking the bypass line and crossing the highway without making any disruption to the highway traffic. This exercise

Secondly, the span across the river was too long and hence it was necessary for us to install a tower in the middle of the river. Fortunately, the site survey made by our team found a sand dune in the middle of the river which was effectively used to install the tower. The real challenge started at the time of installing the anchors. Soil was too soft that it was not suitable for installing any type of anchors. Modular supports were specially designed for this considering the guy angle and ease for transportation.

The long modular steel supports offer the large width that

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

27

Sector FOCUS will be benefited the most by ERS. It is not a disaster management system alone. ERS can be used in places where there is a need for line reconductoring or rerouting of line. Duration of line outage can be reduced substantially with the use of ERS. Apart from power sector, ERS can also be used as a temporary telecommunication tower for big gatherings.

is necessary for both connecting the guy wires and also increasing the stability of the ERS tower.

Our mission is to provide a safe, secure and uninterrupted supply of Electrical Power while observing health, safety, and environmental standard. We have significantly augmented the marketability and customer relevance of this technical innovation by combining it with a suitable business model. Traditionally, vendors for this product, based on Canada and US, were targeting only utilities with large networks who would have large inventory and a dedicated team doing periodic drills to be able to actually use the product once in a while for restoring. This made them out of bounds for a large number of stake holders who have periodic outages due to failure or reconductoring the line.

Thirdly, we need to ensure that the conductor is not immersed in the river as it may add as an extra load on the conductor during stringing. Pulling the conductor while it is subjected to a heavy river current would have severely stressed the tower. In order to avoid such issues, water cans were tied on the conductor so that the conductor floats on the river. Only tension towers in ERS were used in order to reduce the sag and obtain the required vertical clearance across the river. Further, long rod insulators of 160 kN were used for attaching the guy wires to ensure the clearance between the phase and guy wire. Embankment was made using sand bags to prevent the erosion of the bank. As the tower will remain there for next three months, local people saw this as an opportunity and started cultivating crops over Two ERS tower forming a Double Circuit the sand dune.

Line was charged on 10th January, 2018 and will evacuate around 800-1000MW of power for the next three months with the help of ERS. Without ERS, this prolonged outage would have resulted in a serious economic loss to the utility.

Stringing of conductor from existing tower to ERS

So, we adopted an innovative business model where rather than selling structure, we offer complete end to end solution. We take care of transportation, erection, supervision and disassembling of the structure. This saves the O&M, training and storage cost that are incurred by the Transmission line owners and electrical EPC contractors customer in case they own the system. We are proud to inform that our ERS has helped in restoring more than 2000MW of power within the last 8 months. Currently, it is taking 5-6 days to transport our structures to the site and begin the erection works. Hence, we are planning on setting up storage units across India which enable us to start line restoration immediately. We are discussing with major power corporations for Supreme to act as an electrical contractor for providing the ERS solution to them. In ELECRAMA 2018, we will be showcasing a demo model of our ERS which will help the customers to have an idea of what we are doing and what are the benefits that they get from it. We will be providing them with an insight of what we have accomplished so far and what we are planning to achieve in the next upcoming years. n Long Rod Insulators attached with guy wires Crops being cultivated on the sand dune

28

|

April - May 2018

|

Power Insight

|

www.vision-media.co.in

INDIAN PARTNER OF

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

29

Sector FOCUS

SMART METERING INITIATIVE

T

he government’s UDAY scheme endeavours to provide some reprieve to India’s DISCOMs and distribution sector, through financial restructuring. With their capability to cut transmission and distribution losses, and ensure 24X7 power, smart meters have also been made a part of this scheme, which can unlock a cascade of benefits for discoms and consumers. Most importantly, the two-way communication technology underpinning them will enable utilities to facilitate demand response and prediction, and management of peak demand, achieving grid stability.

Key Benefits Smart meters will enable discoms to forecast energy demand cycles in real-time, and swiftly rebalance the grid’s energy sources, achieving renewable-energy infusion. A smart meter records consumption of electric energy in intervals of one hour or less and communicates this data to the utility company. This allows utility companies to introduce price differentiation based on the season and the time of day.

Thus with smart meters recording and anticipating fluctuations throughout the day, discoms can explore ‘Time of Use (ToU) tariffs’ that accurately reflect energy prices. While discoms can shift loads from high-price hours to low-price hours, it will also encourage consumers to change their energy consumption pattern and save on electricity bills by opting for more attractive ToU tariffs.

With real-time communication between DISCOMs and consumers, smart meter data can ensure faster outage detection and restoration of services, and end billing inefficiency via an automated bill meter reading. Additional consumer benefits include access to a prepaid billing model wherein they pay only for the electricity they can afford. They can also consciously adopt energy efficient practices, managing energy costs better.

The benefits of smart meters are clearly profound—and most importantly, easily accessible for consumers, for whom it is a simple one-time installation of a compact appliance. What they get in return is an unparalleled degree of transparency and trust in their DISCOMs, and reliable electricity supply.

Key Initiatives: Understanding these benefits, the government’s Smart Meter National Programme is working to implement one of the world’s fastest ramp-up of smart meter installation, targeting the retrofitting of 25 crore meters.

30

|

April - May 2018

|

Power Insight

|

Though, the benefits of smart meters are immense for both discoms as well as consumers. However, the high upfront cost of smart meters has been one of the key reasons for their slow adoption by discoms with fragile financial health. To overcome this issue, one of the key initiatives being undertaken by the government is the bulk procurement of such meters.

To this end, Energy Efficiency Services Limited (EESL), which is spearheading the initiative, is aggregating the demand of smart meters from various states in order to procure meters in bulk and achieve cost efficiencies. EESL has released two tenders so far based on the international competitive bidding process for the procurement of 10 million smart meters on a pan-Indian basis. The move has received a wide participation from the industry and helped in a significant reduction in smart meter costs.

The Need of the Hour Along with universal and affordable energy access, there is a larger imperative to smart meters as well. As the conduit for end-to-end transfer of energy demand, smart meters are the building blocks of smart grids. Globally, smart grid infrastructure investment in countries like China and the US has risen from approximately $67 billion in 2009, to nearly $200 billion in 2015 – creating a corresponding demand for smart meters. The mandatory nature of these meters in a country with the size and population of India can create bulk demand and facilitate economies of scale in reducing manufacturing costs. Smart meters, thus, not only act as a pathway to resolve DISCOM woes with newfound efficiencies, but can also create an entire domestic smart meter industry where none previously existed.

Way Forward: Smart meters are the first step in the digitisation of energy, paving the way for India’s smart energy revolution.

Powered by cutting-edge technologies like the Internet of Things (IoT), and automation, ‘smart energy’ integrates energy consumption with renewable-energy production, relevant infrastructures, through energy services, active users, and enabling technologies.

Most importantly, the smart meter is a vital technology in India’s power reform, creating the potential to reduce DISCOMs’ current liability to India’s financial infrastructure, estimated to be INR 20,000 crore. With the replacement of 25 crore conventional meters with smart meters, billing efficiency can improve from 80 percent to 100 percent, and they have the potential to increase DISCOM revenues by INR 1.1 lakh crore. n

www.vision-media.co.in

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

31

Industry INSIGHT

Industry Insight

Solar PV Modules

PV Modules Market More than 110 Indian solar cell and module makers are registered with the government, out of which only a handful are expected to survive as orders funnelled through a domestic-content policy have all but dried up, leaving some of India’s biggest solar panels manufacturers on the verge of facing financial collapse, priced out by Chinese competitors as they had been struggling to win contracts.

32

|

April - May 2018

|

Power Insight

|

www.vision-media.co.in

T

he solar power sector in India is on an exponential growth path. A capacity addition of 3,269 MW of solar has been reported in India during the first quarter of calendar year 2018. The cumulative installed solar capacity in India totalled 22.8 GW at the end of March 2018. The major beneficiary of this growth have been the Chinese companies, accounting for around 85 percent of India’s solar module demand and earning around $2 billion, according to industry data.

Going forward, India goes all-out to achieve the bold targets lay out under the National Solar Mission (NSM) which will need an annual run rate of 15-20 GW in solar installations to hit that goal of 100 GW by 2022. Based on current installed capacity there is almost 80 GW more to go that would translate into the total annual

INDUSTRY INSIGHT percent imports from China last year had gone up to 80 per ent this year.

Something has to be done as the domestic sector capacity is not being properly harnessed and more than 50-60 percent of the country’s installed capacity represents idle plants.

making it difficult for Indian firms to compete with Chinese manufacturers.

Further, as the government prioritises cheap solar power over local manufacturing, Indian solar power plant developers—including companies backed by Japan’s Softbank and Goldman Sachs—are quoting ever-lower tariffs in auctions to

Today there are more than 110 Indian solar cell and module makers registered with the government, out of which only a handful are expected to survive, according to solar consultancy firm Bridge to India. This call for a serious attention from the central government which needs to take some concrete steps to accelerate the growth of the solar energy sector by resolving policy-related issues facing the domestic industry, in order to provide necessary boost, before it is too late.

Rising Imports: India has seen a continuous rise in solar imports and China accounts for the largest portion of these imports. In the last quarter (Q4) of FY 2017-18, India imported solar modules and cells worth $1.083 billion registering a steep rise as compared to Q3 of FY 2017-18, where India imported solar modules and cells worth over $799 million.

win big projects, encouraged by steep drop in Chinese solar equipment prices. market opportunity of more than $10 billion over the next few years, going by the government’s capacity targets.

Industry & Market Overview: The domestic manufacturing capacity for solar cells in India is estimated to be more than 3.5 GW and that for solar modules in excess of 10 GW. Indian companies produced an estimated 1.33 GW of modules last year out of the total capacity of 5.29 GW, according to Bridge to India. Total consumption of modules—60 percent of a solar project’s cost—was around 4 GW. Some of the issues faced by domestic manufacturers include - lack of scale, absence of raw material supply chains and rapidly changing technology is

In addition, orders funnelled through a domesticcontent policy have all but dried up after the World Trade Organization last September upheld an earlier ruling that found the move violated global trade norms. It is squeezing out Indian cell and module makers, leaving some of India’s biggest solar panels manufacturers on the verge of facing financial collapse, priced out by Chinese competitors as they had been struggling to win contracts.

In the last quarter Q4 of FY18, India imported solar modules and cells worth $1.083 billion registering a steep rise as compared to Q3 of FY18 - where India imported solar modules & cells worth over $799 million.......

On the other hand, there was a steep decline in solar exports from India as exported modules and cells worth approximately $19.15 million during the Q4 of FY 2017-18 as compared to India’s export of solar modules and cells worth $70.18 million in Q3 of FY18. This is 73 percent more than the $19.15 million worth of solar exports

As the data shows the import for solar sector is on rise, from around 70

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

33

Industry INSIGHT Industry Interaction

ReneSola Mr. Krishan Sharma

Country Manager - ReneSola Jiangsu Ltd

What is your say on the growth witnessed by PV Module market in India in recent years? What opportunities do you foresee in the market over the coming years?

Indian solar market is one of the biggest solar markets in the world and India is well prepared for reaping the benefits from the country’s high insolation level and has set challenging ambitions in regard to solar PV renewable energy.

The stakes are extremely high for India’s prosperity and the renewables industry must not fail to deliver on expectations and it’s indeed a big opportunity for Solar module manufacturers around the world to come and be a part of this market. India has added 4.6GW in Q1 2018.

There are almost 10GW of solar projects in tendering at the moment and this may likely to achieve the tendered capacity of 25 - 30GW in 2018-19 but of course, it’s a policy-driven

As per the data available for the last quarter of FY18; the Chinese companies accounted for nearly 91.5 percent of all solar imports in the country. Industry analysts feels that major policy

Considering safeguard and/ or anti-dumping duty is a tougher call for India as the downstream market is extremely price sensitive and any price shock would detract from the vastly ambitious target of 100 GW by 2022. .... |

April - May 2018

|

Power Insight

Take us through Renesola’s journey in India, so far? Also, tell us about your key product and service offerings in solar space?

ReneSola has started its operations in India in 2012. Since then, we have been supplying Solar PV modules to all the major solar developers in the Indian market. We offer our High-Efficiency Polycrystalline Solar PV modules in the Indian market.

What has been the company’s cumulative supply (MW) of the module in India till date? Also, brief us on the module technology & efficiency that you offer to the Indian market?

changes in China announced recently, imposing installation caps and reduction called for in the feed-in tariff could result in declining module prices and increased imports of Chinese panels into India. However it is interesting to note that not all the modules are imported by developers, a significant portion of the modules are being imported by Indian manufacturers who re-brand the modules for sale.

from India in Q1 2018.

34

market and favorable policy framework is must to achieve the goal in a sustainable way.

|

India is in the

www.vision-media.co.in

midst of its own trade investigations to consider safeguard and/or anti-dumping duty on cells and modules. We feel that the Indian government has a much tougher call as the downstream market is extremely price sensitive and any price shock would detract from the vastly ambitious target of 100 GW by 2022.

Domestic Industry Woes Now a thorny question facing India is how to manage demand for solar panels and other components that are critical to the implementation of projects and growth of the sector. The country has two options, either to import the panels or make them domes-

INDUSTRY INSIGHT ReneSola has supplied more than 1.5GW of Solar PV modules in the Indian market and more than 16 GW globally.

Our modules are performing aptly in Rooftop as well as in ground-mounted projects which help us to get the repeat orders from existing customers. We believe in bringing something new and stable to the market. We started offering the latest technologically advanced products like PERC, Bifacial, Double Glass, and Half Cut Cells Polycrystalline Modules with efficiency range of >17%.

How do you look at the competition in the Indian market? What is your USP and value-added services that you offer to your clients to keep going in this highly competitive market?

Due to bid over bid declining tariffs, Central and state governments are reconsidering their procurement policies leading to the postponement of some tenders. Meanwhile, some DISCOMs, having completed auctions with higher tariffs are giving second thoughts on signing PPA’s. We believe that this short-term hush will lead to fierce competition in 2018 too.

Our USP for this market is nothing but the technically advanced product on fair price backed up with highly trained sales and technical support team. We believe in 100% customer satisfaction and each customer is equally important to us when it comes to support.

Could you throw some light on pricing trends in the module market during the past year? Do you see module prices stabilizing or fluctuating in the market from here on?

Well, solar module prices are declining much more rapidly than expected and now changes in feed-in tariff rates & installation caps for solar power projects in China will nega-

tically. However, due to introduction of extremely competitive reverse auctions in solar sector, India is currently a highly price-sensitive market. Since Chinese PV modules are ~ 15%-20% cheaper than Indian PV modules (notwithstanding any countervailing/dumping duties) charged on import of PV

tively affect the demand for solar power modules in China and may benefit the Indian developers. This is so worth mentioning that modules prices are driven by the supply chain so any problem in the supply chain may be lead to a sudden surge in the prices as we have witnessed in MayAugust, 2017.

How do you look at the growth possibilities in the rooftop segment? What are your plans for tapping the opportunities in rooftop segment over coming years?

The rooftop solar market is the fastest growing segment of Indian Renewable sector with a cumulative installed capacity of approx. 2GW but the potential is still untapped and growth is not as it has to be to achieve the 40GW ambitious target by 2022. I think states need to make more efforts to mandate the Solar in C&I sector and to incentivize the residential sector.

We are offering high rated best quality solar modules with good prices and better delivery schedules those are must in the rooftop market. We are working on some plans to ensure the local availability of solar PV modules state wise to cater the demands of our new and existing customers in a better and sustainable way.

Where do you see Renesola in the Indian market by 2020? What are your future plans?

Recently China government dropped 10GW from their earlier planned capacity while Indian market became stronger than it was expected earlier. ReneSola is well focussed on the Indian market and got some big plans for coming years in terms of Solar Module but again most importantly this segment is driven by government policies and supportive policies will definitely help to achieve the planned capacity in India.

modules, the domestic solar manufacturing had been hit by this cheaper import in earlier years - thus adversely affecting the growth of domestic manufacturing.

caused huge blow to Indian Solar PV module manufacturing. In addition, India’s fascination towards grid parity and low solar tariffs and inconsistent policies, has proved to be another huge disadvantage to India’s solar PV module manufacturing.

Hence, the real long-term option for India is to develop a strong indigenous manufacturing base. Though to support the domestic solar industry, MNRE has initiated a Domestic Content Requirement (DCR) under the National Solar Mission so that a portion of projects offered for bidding was to be built through domestic content. Unfortunately, this was challenged by the American government at the World Trade Organization. Thus, increasing issues related to DCR has

www.vision-media.co.in

Recent Development To support and promote the domestic solar manufacturing industry, the government has been working on several initiatives. Towards the end of 2017 the MNRE released draft schemes for encouraging domestic solar PV manufacturing in terms of earmarking certain projects for domestic content and a capital subsidy scheme (M-SIPS)

|

Power Insight

|

April - May 2018

|

35

Industry INSIGHT Industry Interaction

Sova Solar Mr.Krishnendu Mukherjee COO - Sova Solar Limited

What is your view on the growth witnessed by PV Module market in India in recent years? How do you see the market moving ahead during the current financial year?

The market has grown fabulously. Since the inception of National Solar Mission, the Solar Market in India has observed a slow but steady growth. In 2009-2010 there was a common targetfor all manufacturers of Solar Modules to supply their product to the European market and specially to German and Spanish Market. Now India has set a target to of 100Gw by 2022.

The domestic demand has augmented manifolds. 2016-17 and 2017-18 were the base year to take off, because of some

Regarding the incentives, Union Minister of State (Independent charge) of the ministry of power and new and renewable energy - R.K. Singh stated that the programme is being sup-

Though government has taken some positive in recent times - however, for a strong domestic manufacturing base the country needs continuity of demand so as to give investors confidence to back domestic manufacturing...... |

April - May 2018

|

Power Insight

Though, this is the year of election, but our expectation is on higher side. In their last full phased fiscal budget before the 2019 Lok Sabha Election the Honourable Minister of Finance , Shri Arun Jaitley has taken some initiatives which are well planned to boost up the rural infrastructure and the total Renewable Energy sector as a whole. So, the current year

ported by the Government of India through a Special Incentive Package Scheme (SIPS)/ Modified Special Incentive Package Scheme (M-SIPS). The scheme, provides for 20-25% subsidy for investments in capital expenditure for setting up of the electronic manufacturing facility and reimbursement of Countervailing Duty (CVD)/ Excise Duty (wherever applicable) for capital equipment for the units outside Special Economic Zones (SEZ).

for setting up of the solar manufacturing facility.

36

internal and external issue it could not reach it’s zenith. It can be well remembered that getting orders in Kw level was a mammoth task. Whereas, now negotiation of Mw scale business has become acommon phenomenon. Keeping close monitoring on the market potential we Sova Solar Ltd., has set a target to expand our production capacity to 1GW by 2020.

|

The incentives are available for several categories of electronic products

www.vision-media.co.in

and product components, including poly-silicon, ingots, solar photovoltaic (SPV), cells, modules/panels. Units across the value chain starting from raw materials to assembly, testing, and packaging of these product categories are included.

Way forward The Indian government’s overriding priority in the sector, so far, has been increasing generation capacity and lowering tariffs. That focus has hurt the prospects of domestic manufacturers who are unable to compete with Chinese imports and have now filed a new anti-dumping duty petition. Though, it has been consistently argued that protectionism will not solve the prob-

INDUSTRY INSIGHT growth is expected to be intact.

Briefly tell us aboutyour company and its key offerings in solar space?Also, brief us on the module technology & efficiency features and your manufacturing capabilities?

Sova Solar Ltd., was a venture from such a group which was involved in Steel and Allied Industry. Mr. Subrata Mukherjee, CMD, Sova Solar Ltd., had taken initiative to venture into the Green Energy business where he had passion to make the earth a pollution free domain. Late Sova Mukherjee, was the mother Shri Subrata Mukherjee and company name originated from her first name.

Sova Solar Ltd. Had started its journey in the financial year 2010-11. That time it was commenced with installed production capacity of only 12.5Mw p.a., with technology support from SPIRE Corporation. Now the annual installed capacity of Sova Solar is 200 Mw. Ambition is to grow upto 1Gw. We, Sova Solar have introduced 4BBmodules in India. In the case of 5BB (bus bar) we are the harbinger. Our customers feel comfortable with our modules for Government based projects. We a grateful to all our associates, direct and indirect.

How do you look at the competition in the market? What has been company’s cumulative supply (MW) of module in India till date? What is the USP that helps you to stay ahead inthe market?

There is a tough competition in the market. No company leaves any opportunity to catch a single order. The competitors from foreign origins are throwing more challenges in the market. The challenges are always welcome and that should be reign in, but on the basis of stable quality stan-

dard of product. Minimising the price by compromising the quality is not acceptable.

Till date Sova Solar has supplied more than 200 Mw of Modules cumulatively in the domestic market and 25-30 Mw to the export market. Our customers are happy to use our modules in tariff-based projects where extra generation gives more mileage. Our USP is to “Energise The Future with Right Quality of Module at a Right Price.” Sova Solar is in the approved vendors list of L&T, BHEL, NTPC, BEL, ONGC, etc.

This is an indicative list not the exhaustive one. And all of them are very quality conscious.

How do you look at the growth in the rooftop segment?

What are your plans for tapping the opportunities in rooftop segment over coming years?

The expectation was high but awareness amongst the citizens are less. SECI had taken a very good initiative by the way of tendering for 1.5GW Solar Roof Top projects. But unfortunately, the total initiative went into vain. The roof top projects in India have to be made more popularize and for that more and more awareness programmes have to be introduced. We are mapping out the opportunities of rooftop market and framed a plan to reach every nuke and corner to achieve the maximum share in this segment.

Where do you see Sova Solar in the Indian market by 2020?

Sova Solar has already won the heart of its customers due to its’ good quality and most competitive price. Our target is to energise the future of every Indian roofs with Sova Solar Modules. We want and rather love to serve the country and the universe in a better way through our supreme quality modules.

Solar Power Projects” scheme has also been increased to 40 GW, from 20 GW.

a single country. The entire sector is exposed to the risk of a potential disruption in global supply chain and/or change in international political, trade or economic environment.

lems of Indian manufacturers. But everincreasing share of imports for solar modules is a concern when India plans to meet a significant share of its power requirement from solar and a huge majority of modules are imported from

Fortunately the existing units that have suffered but are now raring to go with new capacities include Tata Power Solar, Adani, Jupiter and Indo Solar, to name just a few. In addition, new investors that have committed large scale financing, such as SoftBank and GCL, are looking for policy clarity and risk mitigation through better demand calibration.

For rapid deployment of a strong domestic manufacturing base the country needs continuity of demand so as to give investors confidence to back domestic manufacturing. Though government has taken some positive steps in this direction; as of December 2017, 23.65 GW had been tendered, out of which letters of intent for 19.34 GW have been issued.

Such weighty backers are likely to head to India with large-scale investments covering the entire value chain from Ingots and wafers to cells and modules, but they badly needed private capital to flow and for banks to show their eagerness to support. n

Around 35 solar parks totalling 20 GW have been approved in 21 states. The target under the country’s “Development of Solar Parks and Ultra-Mega

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

37

Industry INSIGHT

DOMESTIC PV MANUFACTURING

A

ommendations came within a month of submission of the petition by five Indian manufacturers.

ccording to the Ministry of New and Renewable Energy (MNRE) - India’s has installed capacity for producing 3.1 GW of cells and 8.8 GW of modules. Though these numbers appear respectable in the context of India’s solar power generation capacity but the industry is operating at around 50 percent of the nameplate capacity – which is a matter of concern. Thought, the existing Chinese majors have maintained their market share - the new Chinese companies have taken a significant share away from Indian and other international suppliers. Today, 8 out of top 10 module suppliers in the Indian market are from China. The Chinese offerings

However, the standing committee on safeguards under the finance ministry has recently decided that no such duty needs to be imposed that has caused a situation of confusion in the industry.

According to laid down procedure, any recommendation for safeguard duty has to be discussed by the standing committee on safeguards, as well as at a public hearing, after which a report is sent to a panel of secretaries for a final decision.

Since, DG Safeguards and DG Anti-Dumping were merged to form Directorate General of Trade Remedies (DGTR), and has been shifted to the commerce ministry. As per the commerce ministry recent notice - DGTR will hold a public hearing on imposing 70 percent safeguard duty on imported solar equipment on June 26, 2018 in Delhi. However, a meeting of the standing committee on safeguards in May had decided no safeguard duty need be set on solar products.

being way cheaper than Indian PV modules, the domestic solar manufacturing had been adversely affected by the rising presence of Chinese companies in recent years.

New Policy Measures The government plans to boost domestic solar module manufacturing by providing INR 11,000 crore direct financial support along with concessions to cut reliance on imports from China. In a ‘concept note’ for supporting solar manufacture in India, the Ministry speaks that the installed cell and module is not being fully exploited because of obsolete technology. It adds that the existing capacity is mainly of the conventional technology of multi-crystalline Al-BSF (AluminiumBack Surface Field) solar cells, which have efficiency limitations and that

Market Confusion Looking at the continuous rise in imports, Directorate General of Safeguards had recommended imposing provisional safeguard duty of 70 percent on imported solar panels and modules for a period of 200 days - in January 2018 - on the grounds that such imports had increased multiple times in the last few years and were causing ‘serious injury’ to the domestic solar manufacturing industry. The rec-

38

|

April - May 2018

|

Power Insight

|

www.vision-media.co.in

very few players have ventured into the superior PERC (Passivated Emitter Rear Cell) technology that are more efficient and cost-effective. Thus a “direct financial support” and a ‘technology up gradation fund’, for solar manufacturing sector have been proposed.

Apart from providing financial incentives for solar manufacture, the Ministry also proposes to “revive” the ‘domestic content requirement (DCR)’ scheme, which reserved a slice of the market for locally made cells and modules. The government proposes to get central government-owned companies to set up 12,000 MW of projects using local-made products. In addition, Modified-Special Incentive Package Scheme, is available to all electronic goods manufacturers, but there have been few takers for the scheme. However, a few companies have expressed desire to set up manufacturing facilities in India—notably, Trina Solar and Longi, both of China.

Way forward: Going forward, Indian suppliers are expected to maintain a market share of 10-12 percent, broadly proportional to capacity set aside for Domestic Content Requirement (DCR).

However, the Chinese module companies are expected to dominate the market notwithstanding the Indian government’s push for Make in India and the imminent announcement of a new manufacturing policy for the sector. The possibility of other mid-sized Chinese suppliers entering the market with aggressive pricing also cannot be ruled out.

On the other hand, project developers are in a sweet spot as they are in a buyer’s market despite increasing Indian demand. They will be relieved with falling prices, which will serve to grow the appetite of local investors. n

INDUSTRY INSIGHT Authoured Column

Lost decade for Indian Solar PV Manufacturing..

Mr. Kolan Saravanan

General Manager - Centrotherm Photovoltaics India Pvt. Ltd

T

en years is a good time to review the impact of “National Solar Mission” on Solar photovoltaic manufacturing.

The scheme was launched in ‘08 with a target of 20 GW of installations by the year ’22. This installation target was to be met by setting up favorable manufacturing environment and policies to have 5 GW of annual manufacturing capacity of cells and modules and 2 GW of Polysilicon supplying to the Mission. The Government in July 2015 revised the installation target from 20 GW to 100 GW for solar PV installation with a detailed focus on grid connected solar rooftop and medium & large scale grid connected solar PV. The announcement did not have any enhancements on manufacturing goal or further specific policies to support manufacturing.

The revised goals fit nicely into the Paris agreement and the commitment of the country towards that. Thanks to some bold and shrewd policies and a fortuitous fall in PV prices; the country handily achieved the original goal of 20GW in 2017 and is working towards the revised 100GW goal by 2022. Unfortunately that cannot be said of the solar PV manufacturing.

Let us look at the PV manufacturing scene - The solar PV system is made up of the PV module, inverter and balance of system (BOS). The BOS includes cables and frames that are typically sourced locally. The inverter suppliers have started to set up facilities to

to module of up to 5GW and giving them assured offtake for two years is a welcome move. The plan is innovative and hope it is able to attract manufacturing. The only hitch is that the manufacturing facility is expected to come up over a 3 to 4 year time period well after the national goals are to be achieved. None of that will do good for a beleaguered industry that is facing an existential crisis.

manufacture in India as it is more cost effective; once you factor in the import duty for inverters. The module manufacturing involves the assembly of cells and encapsulating them in a glass frame to ensure that a lifetime of 25 years is possible. This is an important stage; but not a high value creation.

The larger value is in conversion of poly to wafer and of wafer to cell, rather than the cell to module. There is no wafer manufacturing capacity in India.

Construction of a poly Silicon plant was started and has stalled even before commencement of operation. MNRE assessment of August 2017 showed an installed capacity of nearly 3 GW cell and >5 GW module manufacturing.

They need immediate relief in the form of safeguard or dumping duty. A provisional duty of 70 percent announced in Jan 18 has been rejected by the committee of secretaries. A detailed review continues to be in progress.

The department of safeguard has announced a public hearing on June 26th and manufacturers hope that it is concluded quickly and fair duty is implemented.

The cell manufacturers; however, are unable to participate in the huge market opportunity due to the onslaught of below cost imports. They lobbied for anti-dumping duty in 2014 and while the assessment was in favor of the provision; it was withdrawn based on upcoming programs to support them and in the interest of seeing a robust solar PV installation. Four years later; they are still struggling to get business and have only 0-10% utilization in the last few months. Another anti-dumping and safeguard petition has been filed.

Recent reports suggest that the national goal of 175GW of renewable energy installation by 2022 will be met ahead of time and the target will be augmented to 227GW. It will be a pity if that is achieved on the graveyard of domestic solar PV manufacturers. A speedy conclusion of pending safeguard for solar PV cells is the last and only chance to recover the lost decade of solar PV manufacturing immediately…. n _______________________________

It is quite clear that without support and a level playing field; solar PV manufacturing is set to bypass India.

SECI has issued an invitation for expression of interest to set up new solar PV manufacturing chain from wafer

www.vision-media.co.in

(The author has spent the last two and half decades in the manufacturing equipment sector and has closely followed the manufacturing cycles for semiconductor and solar PV manufacturing.)

|

Power Insight

|

April - May 2018

|

39

Industry INSIGHT

IMPORTANCE OF MATERIALS IN PV MODULES RISK MITIGATION STRATEGY: RECOMMENDED BEST PRACTICES TO SELECT PV MODULES Technical Column By Mr. Rahul Khatri, Technical Manager, DuPont Photovoltaic Solutions

W

ith the cost of PV modules dropping drastically over the past several years, manufacturers are rapidly deployingtechnology changes and compromising on quality to manage short-term goals. This is leading to a wide variation in PV modules in terms of design, construction and the “bill of materials” which has a direct and significant impact on the performance of the modules.

Figure 1 : Structure of a crystalline silicon PV Module

Existing IEC (International Electro-Technical Commission) standards for PV modules are merely qualification standards which, at best, help to identify manufacturing-related defects; however, they are not designed to test the module’s lifetime and long-term performance, particularly in extreme climatic conditions.

This enables the use of low cost but unproven materials which increases failure risks and negatively impacts investment returns. Specification of materials and properties, therefore, is critical for the project owners to ensure the use of the right materials in the modules for their projects to help minimize performance risks.

Importance of materials in PV modules Figure 1 represents the structure of a crystalline silicon PV module and its different components. The matrix of interconnected solar cells, which converts sunlight into electricity, is encapsulated by a set of materials that fundamentally allows cells to work for 25 years.

Materials protect cells from harsh environmental stresses such as ultraviolet radiation, humidity, temperature, dust, sand, etc., as well as electrically insulate the module, which is critical from a safety point of view. If material degrades, it can have a significant impact on the performance of the cells (in terms of faster power degradation or even catastrophic failures), aswell as safety of the module. The functions and key properties of each of these material layers are explained

40

|

April - May 2018

|

Power Insight

|

in section 2.1. In addition to having optimal balance of properties, the materials should be capable of retaining their properties when exposed to outdoor conditions for long periods of time.

Function and key properties of materials used in PV modules i. Front glass: Front glass provides mechanical strength and structuralrigidity to the module, as well as long-term protectionagainst external factors such as rain and dirt. It shouldbe mechanically strong and highly transparent to allowmaximum light transmission. Front glass comes with an Anti-Reflection Coating (ARC) on the top surface toreduce light reflection.

Typical issues:glass breakage (poor installation,wind loads, insufficient thickness); degradation of ARC coating(sand abrasion and heat-humidity stress).

ii. Encapsulant: The encapsulant is mainly used to laminate glass, cells and backsheet, and has many requirements such as high optical transparency (to allow light transmission);

www.vision-media.co.in

INDUSTRY INSIGHT Figure 2: EVA yellowing aluminumin humid climates.

good electrical insulation; excellent adhesion to glass, cells and backsheet; and resistance to UV radiation. The most commonly usedencapsulant is ethylene vinyl acetate (EVA).

iii. Backsheet: The backsheet is the most critical component from both a module durability and safety standpoint because it is the first line of defense for PV cells and encapsulant from moisture corrosion and it electrically insulates the module.

A typical backsheet for PV modules consists of three layers (see Figure 3)—outer (exposed to air and thus should withstand harsh environmental stresses); middle (critical for moisture barrier, mechanical strengthand electrical

Figure 3: PV backsheet structure

vi. Sealant: The edges of PV modules are potential areas of moisture ingress in the module. To prevent this, the edges are required to be sealed properly with a robust sealing material that has excellent weather-resistance properties, good electrical insulation and sealing performance. In addition to sealing edges, the sealant is used to fix frames and junction boxes; therefore, it must have good adhesive properties. Silicone material is typically used as a sealant in PV in modules.

Risk mitigation strategy—recommended best practices to select PV modules DuPont has been engaged in an extensive field survey program for more than 5 years to help gain an in-depth understanding of what makes a reliable and durable PV module. The studies have found that many materials used in PV modules demonstrate signs of visual changes in less than 2 years of operation and resulted in power loss, safety risk or both. This demonstrates the importance of selecting robust materials—based upon observations and track record in the field in similar environments—to minimize risk of premature failure.

The recommendations outlined here focus specifically on projects involving crystalline silicon modules and have been developed primarily based on material technology, extensive lab testing and field studies. Through provision of these considerations, DuPont seeks to provide “best practice” guidelines that address potential risks associated with module failure in the field.

Know what materials are used insulation properties); and inner layer (promotes adhesion between backsheet and encapsulant).

Although many types of backsheets are currently being used, only polyvinyl fluoride (PVF)-based backsheets are field proven (<0.8% power loss) for >30 years in all climatic conditions. Most of the other backsheets (PVDF, PET, fluorocoating) have 2 to 7 years of field experience and have shown multiple cases of failures, such as cracking, yellowing and delamination.

iv. Junction box: The junction box in a PV module works as an interface between internal circuitry and external cables. It also contains the protective bypass diodes that prevent the occurrence of hot spots in case of cell mismatch or shading.

The outer cover of the junction box should be made of UV and weather-resistant material to avoid degradation. v. Aluminum frames: The module is surrounded by an aluminum frame toseal edges and provide a means to firmly install modulesto the metal structures. The thickness of the frame iscritical for sufficient mechanical stability to withstandwind loads. The aluminum is coated with an oxide coating(anodized aluminum) to prevent corrosion of

We recommend that the bill of materials (BoM) be disclosed by the module manufacturer to assess whether the said materials have a proven track record in the field and areadequately suited to last the specified lifetime for the projectunder consideration. The BoM disclosure should include at least the following items: i. Cell manufacturer ii. Backsheet manufacturer & construction (material layers, thickness) iii. Glass manufacturer, type and construction (with/without ARC, thickness) iv. EVA supplier, Vinyl Acetate (VA) content, thickness & gel content v. Type of edge seal (silicone/tape/glue) and manufacturer vi. Junction box material and manufacturer vii. Frame material and manufacturer The BoM should remain consistent for a specific model of panel. n

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

41

Industry INSIGHT Industry Interaction

Vikram Solar Mr. Ivan Saha

BU Head of Solar Manufacturing & CTO

How do you look at the growth witnessed by PV Module market in India over the past few years? What has been VikramSolar’s cumulative supply (MW) of module in India till date? What targets have you set for the current financial year?

From meagre 10 MW in 2009 to ~21 GW of installed solar capacity in India in Q1 2018 is a tremendous feat. It clearly portrays the initiatives, policies, and encouragement the Government of India has given has taken effect.

In 2017, India (capacity addition ~6 GW) overtook Japan (5.8 GW) and became the third top solar market. And understanding the potential for growth in future, Government of India paved the way for large utility scale solar installations in India by focusing on solar parks (approving Rs 8,100 crore for 50 solar parks), inviting bids of 20 GW (cumulative capacity) projects in 2018, and bringing plans for auctioning 5-10 GW of floating solar power projects in 2018, leading International Solar Alliance and taking other policy reformations to facilitate growth. However, considering that India still has to install nearly 15 GW of solar every year for next 5 years in order to reach its targeted 100 GW by 2022, the efforts need to be increased. Also as a matter of fact, the recent increase in India’s solar PV market has not supported domestic manufacturing growth, which was intended in the Make in India and energy reliance vision.

More than 85% of the solar panels used in the growth were imported, which allowed foreign suppliers a bigger claim in domestic market than Indian manufacturers. More and more importing solar modules has brought the issue of quality, increased forex outflow (more than $3 bn in FY 2017-18 was spent to import solar modules). Only domestic manufacturing in solar will boost the job market in India. So, although, there are opportunities and Government of India is focusing on building solar capacity, the growth needs to be channelled through domestic manufacturing, so that it can improve national socio-economic targets.

42

|

April - May 2018

|

Power Insight

|

We have supplied 1.2 GW module shipped globally till FY 17-18. For FY 18-19, we have plans to focus on rooftop solar growth along with utility solar projects within country and globally. We have already completed more than 190 rooftop solar installations and have a EPC portfolio of more than 750 MW within the country and will work towards contributing to the solar revolution in India.

Tell us about your company’s manufacturing capabilities? Also, brief us on your and key product offerings and its unique features that help you establish a strong foothold in the market?

The company has reached 1 GW mark of annual PV Module production capacity in 2017. In line with the company’s focus on adopting pioneering and innovative technologies, our manufacturing facility has the finest machinery and equipment imported from United States, Switzerland, Germany and Japan. Our products are designed to the highest standards of quality, reliability and performance.

We offer solar PV modules within the range of 10 Wp to 370Wp to our customers. In 2014, we introduced PERC technology-based modules. We focus on manufacturing high-efficiency poly-crystalline and mono-crystalline silicon PV modules. In 2017, we introduced our line of mono-crystalline module with higher energy generation capacity (at least 10% more than poly crystalline modules). It is named

www.vision-media.co.in

Vikram Solar - Product Offerings Polycrystalline modules

Monocrystalline modules

72 Cells

72 Mono Cells

ELDORA Grand

SOMERA GRAND ULTIMA SILVER 1500V SERIES

ELDORA Grand Ultima Silver

SOMERA GRAND 1500V SERIES

60 Cells

60 Mono Cells

ELDORA Ultima Silver

SOMERA ULTIMA SILVER 1500V SERIES

ELDORA Ultima All Black ELDORA Prime

SOMERA ULTIMA ALL BLACK SERIES

INDUSTRY INSIGHT ‘SOMERA’.

Besides providing modules, we offer comprehensive EPC services ranging from conceptualization, execution, commissioning and acquisition of developed sites. We also offer O&M solutions providing preventive and corrective maintenance services for solar plants. We intend to start production of Smart Modules, AC Modules, Bi-facial, and Half cell modules by Q3 FY18-19.

The PV module market has seen a continuous advancement in technology over the recent years to achieve higher efficiency? What has been your contribution in this area, so far?

At first Multi Al BSF (back surface field) modules arrived in the market. Then Mono Al BSF (back surface field) modules in the Indian market accompanied them. However, the need for continuous innovation led the industry toadopt high efficiency technologies like Passivated Emitter and Rear Cell (PERC). In the future, next generation technologies like bifacial, HJT and back contact with higher efficiencies will come to the market.

PERC cell based modules showcased incredible improvement in energy yield.Both multi and mono PERC modules are available in the market, but mono PERC offers less degradation and more energy output and seem set to capture the market in the near future. Currently, MonoPERC modules has high demand in the Indian solar market, but the need for constant improvement of energy yield, better performance, and durability of modules have led the industry leaders to focus on technologies like- Smart Modules, Ac Modules, Bi-facial, and Cut-cell modules.

Being in favour of innovation and understanding its importance to quickly make solar a mainstream energy source, we introduced a Mono-Crystalline module ‘SOMERA’that features PERC technology, has higher energy generation capacity, and lower LCOE. Vikram intends to start production of Smart Modules, Ac Modules, Bi-facial, and Cut-cell modules by Q3 FY18-19.

What is your say on the challenges faced by the domestic industry on account of rising imports? In your view, what corrective measures are needed to save the domestic manufacturing sector that is on the verge of collapsing?

India aggressively invested in solar because solar could power the furthest corners of the country, reduce energy bills, push the country towards its GHG emission reduction targets and its globally growing market would help India to earn profit- satisfying energy and economy of our country.

However, more than 85% of the module demand in the country has been met by imported modules, presenting a bill of $3 bn in 2017. This has been going on for years, and it has cornered the domestic manufacturers allowing foreign playersto dominate the Indian market. This has led to decreased demand for domestic PV productsandlow

capacity utilization rates. Dumping of low quality modules from foreign manufacturers is a growing concern. There should be stricter quality norms for projects auctioned by government authorities and steps must be taken to check adherence to these.

As a domestic manufacturer, we bear the responsibility to offer quality, performance, and innovative technology and help the Indian solar revolution become a success.

However, influx of low quality imported modules at very low prices is hurtingus and other domestic manufacturers.

Like other domestic manufacturers, we had appealed to Government of India for imposing anti-dumping duties of imported modules, for years now. And we are hoping for a resolution in our favour soon.

It is noteworthy in this context, that global markets like USA, Europe, have imposed anti-dumping duties to ensure quality and sustainability of their solar development. India is finally following these footsteps and we have highhope for the future where we can get a level playing field to go toe-to-toe with foreign suppliers.

Where do you see Vikram Solar in the Indian market by 2020? What are your future plans?

Vikram Solar has always been focused on quality, innovation, and performance. Vikram Solar is the first company to gain recognition as Tier 1 Module manufacturing company in India by Bloomberg New Energy Finance. Our modules also featured among the best performing in DNV GL’s Product Quality Program (PQP) in 2017.

Vikram Solar has its state-of-the-art manufacturing facility in Falta, West Bengal with a scope for further expansion in Phases.Within 12 years, Vikram Solar has successfully handled projects of different requirements, capacities, and in various geographical locations with ease.

We have contributed to Indian solar growth by handling utility scale projects (e.g: 130 MW for NTPC at Bhadla, Rajasthan; 80 MW for GIPCL at Charanka, Gujarat; 40 MW for IL&FS at Kachaliya, Madhya Pradesh), rooftop projects (over 190 projects commissioned), innovative projects (India’s first floating solar), and airport installations (Calicut, Kolkata, Kochi).

Currently we have more than 750 MW capacity projects (installed + under execution) EPC portfolio and have commissioned more than 190 rooftop solar projects in India.

Our focus towards innovation, dedication to uphold quality, performance and customer centricity will surely help us lead in the evolving market and allow us to penetrate conservative client circles.

We have elaborate plans to focus on rooftop solar growth along with utility scale solar installations in future. We have also been very successful at satisfying international clients with our best-in-class products. And we are sure that we will claim a larger portion in contribution to the national and global solar sector in 2020 and beyond. n

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

43

Market REVIEW

Market Review

Diesel Generator Sets

On the Road to Recovery D There are multiple drivers for a pick-up in demand for DG sets. However, the bigger demand driver for DG sets is industrial, infrastructure and real estate capex. A revival in these three end markets is critical for a recovery in DG demand.

44

|

April - May 2018

|

Power Insight

|

espite the declining power deficit over the past few years, India is still prone to frequent outages directly affecting the operations of industrial and commercial units.

Diesel Generator (DG) sets are in general used for meeting backup power requirements or in off-grid locations to support critical operations. The relative ease and advantages such as low upfront cost, shorter installation period, higher efficiency, quick start-up time, and fuel flexibility has made DG sets a preferred option for consumers.

However, an argument against them is that power generation is relatively expensive by using DG sets that falls in range of around INR15- 17/unit. It is to be noted here that there will be continuity in demand for DG sets as they are used primarily for backup power and not prime power and the power distribution network is still unreliable in India. Further, India is witnessing growing urbanisation and higher government spending on the infrastructure sector which will lead to an increase in backup power requirements â&#x20AC;&#x201C; indicating a positive outlook for the demand for DG sets and engines over the coming years.

Market Overview DG sets have been a popular power backup solution primarily because of their short installation time, quick start-up and low upfront costs. According to data sourced through industry sources a rise at a rate of around 5,000 megawatts (MW) per annum in diesel power generator

www.vision-media.co.in

Market REVIEW

gensets is estimated to stand at 90,000 MW as on 2016 end, up from 80,000 MW in 2014. sets capacities have been seen in the last couple of years, in the country. Industry experts attribute the rise in DG sets to the largely erratic and uneven power supply in the country. Though the data related to the number of operating DG sets in India is not available as it is not shared by any of the government

kVA rating DG sets are mainly deployed in the hospitality, healthcare, information technology (IT) and IT-enabled services (ITeS), construction, real estate and large industrial segments. While the very high kVA rating DG sets are used to provide emergency backup, critical standby, or base load power to segments such as data centres, health care, manufacturing, government bodies, mining and large commercial units.

In India, different sizes of DG sets ranging from 2 kVA to 7,000 kVA are used, with 15 kVA to 2,000 kVA being the most common. Though the DG sets market can be broadly classified into four segments on the basis of kVA rating: Low (5-75 kVA), Mid Range (75.1-350 kVA), High (350.1-750 kVA) and Very High (750.1â&#x20AC;&#x201C;3,000 kVA).

Low-rating diesel gensets constitute a major share of the market and are used in the telecom sector for backup power in gridconnected areas and as baseload power in offgrid areas. The telecom sector accounts for 55-60 per cent of sales in the segment. Other user segments include small-scale industries, petrol pumps, small commercial establishments, etc.

Low HP segment: Within the Indian DG sets market, the LHP (<160 kva) segment is the most competitive, with the presence of 8-10 organized (primarily Indian) players along with Chinese and local players. The segment has traditionally been dominated by Mahindra, Ashok Leyland and KOEL, new players like Cooper Industries, FG Wilson, JCB India and Cummins India are also looking to make inroads and increase their share.

India is witnessing growing urbanisation and higher government spending on the infrastructure sector which will lead to an increase in backup power requirements â&#x20AC;&#x201C; indicating a positive outlook for the demand for DG sets.... agencies - publicly. However, according to data sourced through private power producer Tata Powerâ&#x20AC;&#x2122;s internal research - states that capacity of diesel

This segment accounts for the highest volumes in the Indian DG market, but profitability is low due to intense competition, resulting in high pricing pressure for the incumbents.

On the other hand the medium to high www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

45

Market REVIEW

Medium HP segment: While KOEL and Cummins are the dominant players in this segment, competition from Mahindra, FG Wilson, Cooper Corporation and Ashok Leyland is increasing.

Mahindra is currently in the <200kva segment, but has bought technology from Navistar and is planning a commercial launch in the 250/320kva range. This will certainly increase the competition for the Cummins & KOEL.

compounded annual rate of 5 percent primarily on account of sharp fall in sales for telecom towers. From a peak of 100,000 DG sets in FY11, demand from the telecom sector declined to 30,000 in FY17. In addition, the country also witnessed a noticeable reduction in power demand from industries.

The DG set market has been in turmoil in recent years. After a subdued market during the period of FY13 to FY17, the sale of DG sets has picked up and has been estimated to reach over INR 63,500 million in FY18.....

High HP Segment (>750kva): This is the most attractive segment in terms of profitability and per unit value is the highest in this segment. Traditionally, Cummins has been the dominant player in this segment, with >55-60 percent market share, followed by Perkins and Caterpillar. New entrants in this range include KOEL and MTU India.

As a result, the sale of DG sets sharply fell from around INR 78,000 million in FY13 to around INR 56,000 million in FY16, registering a decline at a compounded annual rate of 10 percent. In addition the roll-out of the goods and services tax (GST) in July 2017 has also negatively impacted the sales of DG sets. However, since a small percent of around 10-15 percent demand for DG sets is for prime power and around 8590 percent of market demand for DG sets is for backup power â&#x20AC;&#x201C; the market will continue to create demand despite low power deficits.

Market Trends The DG set market has been in turmoil in recent years. After a subdued FY1317, the sale of DG sets has picked up and has been estimated to reach over INR 63,500 million in FY18. According to Motilal Oswal Securities Research report â&#x20AC;&#x201C; during the period of FY1317, industry volumes declined at a

46

|

April - May 2018

|

Power Insight

The report further adds that the industry is expected to grow at a CAGR of 10 per cent over the period of FY17-20 on account of revival seen in key end markets such as Infrastructure sector

|

www.vision-media.co.in

which has seen a record high allocation of INR 3.96 trillion investments in the Union Budget FY18, along with gradual improvement seen in Commercial (IT/ITES, Data Centers, Hotels, Hospitals, Educational Institutions), and Manufacturing sectors (Pharmaceuticals, Automotive).

Growth would be driven by higher volumes in the mid/high horse power (HP) segment; demand for low HP products is likely to remain subdued.

Market REVIEW

Market Drivers There are multiple drivers for a pick-up in demand for DG sets. However,the bigger demand driver for DG sets is industrial, infrastructure and real estate capex. A revival in these three end markets is critical for a recovery in DG demand. The current government is focusing on pump priming the economy through increased infrastructure spending, especially on roads, metro rail and railways.

The government intends to order 25,000 km of roads in FY18, and also take road construction to 41km/day from 22km/day in FY17. In FY17, there was a 40 percent jump in road construction. During road construction, the need for DG sets is felt in remote locations, where availability of power is an issue.

Further, the Indian Railways is looking at installing/replacing the diesel generators used to power air conditioners in trains. Each generator car has two DG sets and the annual industry volumes are 500 units, implying a market size of INR 2-2.5 billion. Key participants are Cummins, KOEL, Volvo

and Greaves Cotton. Another big opportunity for DG sets over the next few years is in metro rail projects, with a new metro rail policy on the anvil and every large city (>1m population; 360 cities) in India looking to construct a metro rail network. Each metro station would need to have DG sets as backup in case of power failure. The typical ratings used in a metro station vary from 500kva to 1,000kva. With 855km of metro rail projects coming up in India over the next few years at an overall capex of around INR 3000 billions, the opportunity in this segment is immense.

unorganised players in the market, thereby benefiting large organised ones. Following the implementation of the CPCB-II norms, the price of DG sets has increased by 15-20 percent, which has affected sales as consumers are taking time to accept the price increase. In addition, growing competition from international and domestic players has led to a significant discount in prices, affecting manufacturersâ&#x20AC;&#x2122; profit margins.However, a revival in infrastructure and industrial growth will yield positive results for the DG set and engine market.

Going forward, investments in the IT/ ITeS (especially data centre capacity), railways, roadways, commercial and real estate segments are expected to provide an impetus to the growth of the DG set market. India diesel gensets market in the country is projected to reach $ 1.24 billion by 2022. Anticipated growth in the market can be attributed to increasing demand for uninterrupted power across commercial as well as residential set-ups coupled with rising number of huge government sponsored projects such as 100 smart cities, AMRUT, freight corridor and national highways projects. n

Way Forward Industry experts believe that the growth of the DG set and engine market has largely decoupled from the traditional power demand-supply gap and quality power supply is the key demand driver. Despite the reduction in power deficit, the demand for DG sets is expected to grow in the short to medium term with T&D constraints continuing to cause interruptions in power supply. Further, the implementation of tax reforms such as GST will gradually reduce the share of smaller

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

47

Communication Features KP Energy to add 1231 MW of wind power in two years

G

ujarat based KP Energy Ltd., has shared with the stock exchange that it will add over 1231 MW within next two years to the existing 205.8 MW. The rapid ramping up of capacity comes soon after a slew of measures, impacting the regulatory framework, announced by the Government in its bid to meet the target of 60 GW of wind energy by 2022.

The government has recently switched over to Auction Driven Tariff Regime from erstwhile Regulator decided Feedin Tariffs. To achieve its target of producing 60GW of wind energy by 2022, it has initiated separate bids under Central Transmission Utility (CTU) network. It has also waived off ISTS (Inter State Transmission System) charges which will help to set up projects in any windy State and sale of power to any far-off State within country without paying any transmission costs.

The industry has also been given a major boost through the 6000MW auction by Solar Energy Corporation of India (SECI) which has brought in all non-windy States on the bee line to purchase power at a very economical rate from SECI. It has also drawn interest of large Corporate Houses, Foreign Banks, Utilities, Institutions, FIIs and corporate bodies to invest in the sector leading to benefits on long term, less risk propositions.

KP Energy provides one roof solutions to entire gamut of services for wind farm development. It also develops wind power projects of utility scale providing end-to-end solutions like wind farm siting, wind site land acquisition, permits, power evacuation facilities like sub-stations, high voltage transmission lines, wind turbine civil foundation works as well as its erection & installation. It facilitates Power Sale Arrangement between investors and Power Utilities as well. KP Energy’s revenue flows in as Balance of Plant

(BoP) activities which is approximately about 20-24% of total Project Cost. This model was first of its kind of package offered by KP Energy in India and it has enjoyed first mover advantage. This also have given a distinction to KP Energy for being one of the highest ROCE, ROI & fastest growing company in India. The Company’s stock is set to migrate to the main boards of stock exchanges for trading. KP Energy Ltd. would add 631.50 MW in 2018-19 and another 630 MW in 2019-20 in its five locations at Gujarat Farukbhai Patel, MD & Co-Promoter, stated in Annual Report of 2015-16 “Remembering Mirza Galib’s words on this grandeur occasion of presenting Annual Report of KP Energy in public forum, I want to openly admit that our dreams, our ambitions and our targets are so high that whatever efforts and hard-work we put in will be less!” “Whatever we will achieve, will turn out to be a miniature and small when compared with final goal! “ Speaking on the topic, Mr. Ashish A Mithani, CEO & Co-Promoter said, “The changes in a regulatory framework is a windfall for our Company. We are at an enviable sweet spot and the future looks very exciting. With multifold growth expected year over year, we would like to assure all our stakeholders that KP Energy will work tirelessly to achieve maximum growth through high service quality and cost control.”

The entire Wind Power sector had a turbulent 2017-18 as a whole lot of tectonic changes occurring due to power tariff, PPAs, restrictive clauses in Wind Power Policy announced last year, etc. resulted in subdued performances of all players.

Toshiba Corporation Welcomes Nobuaki Kurumatani as Chairman and CEO

N

ucts, made Toshiba a source of pride in Japan for nearly 145 years, and also made us a global leader.

obuaki Kurumatani took office as the first Chairman and CEO of Toshiba Corporation to be appointed from outside the company in over 50 years. Commenting on his appointment as Representative Executive Officer and Chairman and CEO, Mr. Kurumatani said, “I am honored to be appointed CEO, and very much aware of the responsibilities I take on. Toshiba is not just any company. Its corporate DNA has realized countless Japan- and world-first technologies and prod-

48

|

April - May 2018

|

Power Insight

“I believe that helping Toshiba back on its feet is my true calling. I am here at Toshiba to support change and transformation, and I see my role as to build on the company’s resilience and to lead its recovery. To secure growth, we must radically improve our earning power and reinforce our finances. We must move out of our comfort zone and promote fundamental reforms.”

Mr. Kurumatani most recently served |

www.vision-media.co.in

as President of CVC Asia Pacific Japan (CVC). Before joining CVC in May 2017, he was Deputy President and a Director of Sumitomo Mitsui Financial Group, one of the largest financial institutions in Japan, where his career was devoted to corporate planning, public relations and internal auditing.

He is a graduate of the University of Tokyo, where he studied Economics.

Satoshi Tsunakawa has taken on a new role in Toshiba as Representative Executive Officer and President, and Chief Operations Officer (COO). Mr. Kurumatani and Mr. Tsunakawa will together execute the management of Toshiba Group.

Communication Features Tata Power Solar becomes the first solar company to win prestigious IMC Ramkrishna Bajaj National Quality Award

T

ata Power Solar, India’s largest integrated solar company bags the coveted IMC Ramkrishna Bajaj National Quality Award NQA award 2017 for achieving business excellence in the manufacturing category. It is one of the most respected awards for Quality and Performance Excellence in India. It is the first ever solar company to win the award that is akin to Malcolm Baldrige award criteria of USA. The award was handed over in the glittering ceremony held at IMC Building, Church gate, Mumbai in the presence of dignitaries from across the industries with Dr. K Radhakrishnan, Former Chairman ISRO as the Chief Guest.

The annual IMC RBNQA process has recognition levels. They are chosen from

number of participating organizations of repute, through a stringent assessment process by a panel of independent and trained assessors and judges against stipulated comprehensive criteria. Tata Power Solar was adjudged winner on the basis of rigorous assessment on the various paDr. K Radhakrishnan, Former Chairman, ISRO presents the IMC Ramkrishna Bajaj National Quality Award to Tata Power Solar rameters of management like Leadership, in this prestigious national Dr. Ranjan Saxena and Dr. Strategy, Quality, assessment and it is Gustad D Daver.

Customer, People, Technolheartening to see that after ogy, Operations, Processes Speaking on the occasion, the due evaluation and and Business results.

Mr. Ashish Khanna, MD validation process, RBNQA and CEO of Tata Power The evaluation process has selected us as a national Solar says, “We have been involved multi-level enwinner. This reinforces in the solar business from gagement with experts and the trust of our customers last 28 years and have the senior examiners from variand epitomise a core Tata reputation of providing the ous industries. Tata Power Group’s value of striving for best quality products and Solar was selected as the excellence in standards of services to our customers winner by an independent our work and in quality of globally. This is the first time jury consisting of Dr. Anil our products and services.” that we have participated Kakodkar, Mr. Keki Mistry,

Delta Electronics India launches Electric Vehicle charging solutions to support the Government’s 2030 EV vision

I

n support of the government’s electric mobility drive, Delta Electronics India Pvt. Ltd., a leading Power and Energy management company, launched its complete range of energy efficient electric vehicle (EV) charging solutions in India.

The advanced EV charging solution offerings from Delta will enable the ecosystem to keep pace with the growing demands for a robust electric automobile infrastructure.

Exhibiting at Elecrama 2018, Delta showcased its diverse portfolio of EV solutions with DC Quick, AC Chargers and Site Management System. These chargers can be conveniently installed

in multiple applications such as parking spaces, highway service, as well as residential and commercial buildings.

to be a strong catalyst and partner in India’s growth story, we are also announcing our fourth manufacturing plant in the country today. This is testimony to our commitment to the “Make In India” initiative. Delta’s goal is to develop sustainable and energy efficient integrated solution offerings in India, for India, that will offer immense employment opportunities across the geography.” Delta Electronics (Thailand) PCL. is the parent company of Delta Electronics India.

Hsieh Shen-Yen, President of Delta Electronics (Thailand) PCL. said, “The business climate in India offers Delta exciting opportunities to partner with the government to power India’s growing economy. In line with our vision

The manufacturing plant in Krishnagiri, Tamil Nadu, will be operational in 2019. Along with its state-of-the-art R&D Centre in Bengaluru, Delta is looking at investments of over a US$150 million in India.

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

49

Events Diary Up-Coming Events

50

|

Solar South 2018 14 June 2018 - 16 June 2018 Chennai Trade Centre, Chennai, India

ELECXPO - ELECTRONICS, ELECTRICAL & POWER 2018 14 June 2018 - 16 June 2018 Chennai Trade Centre, Chennai, India

Aluminium China 2018 11 July 2018 - 13 July 2018 Shanghai New International Expo Centre (SNIEC), Shanghai, China

INDUS-tech industrial expo 2018 25 July 2018 - 27 July 2018 ARC CONVENTION CENTRE, Rudrapur, India

WRETC 2018 21 August 2018 - 23 August 2018 Convention Centre -NDCC Parliament Street , New Delhi, India

BOGOTA INTERNATIONAL TRADE SHOW 2018 24 September 2018 - 28 September 2018 BOGOTA, COLOMBIA, BOGOTA, COLOMBIA.

Renewable Energy India Expo 2018 18 September 2018 - 20 September 2018 India Expo Centre, Greater Noida, India

Future Energy Expo 2018 20 October 2018 - 22 October 2018 Labh Ganga Exhibition Centre, Indore, India

PTC Asia - Power Transmission & Control 06 November 2018 - 09 November 2018 Shanghai New International Expo Center, Shanghai, China

BV Tech Expo 2018 22 November 2018 - 24 November 2018 NSIC Ground, New Delhi, India

LED EXPO New Delhi 2018 06 December 2018 - 08 December 2018 India Exposition Mart Ltd., Greater Noida, India

Intersolar India 2018 11 December 2018 - 13 December 2018 BEC - Bombay Exhibition Centre, Mumbai, India

April - May 2018

|

Power Insight

|

www.vision-media.co.in

www.vision-media.co.in

|

Power Insight

|

April - May 2018

|

51

52

|

April - May 2018

|

Power Insight

|

www.vision-media.co.in