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Power engineering companies are looking up to the ambitious Integrated Power Development Scheme (IPDS) scheme announced by the government. "Industry has seen a long dull phase on account of policy paralysis. Even consumption cycle went to the lowest due to the lull in the economy. Now that bold initiatives are being taken to de-bottleneck the system, there is visibility to demand," said Subir Pal of ABB India.
IPDS, announced in the Union Budget this year, aims to strengthen the transmission and last mile connectivity and metering of power entailing an investment of Rs 32,600 crore.
According to Pal, many state electricity boards are now investing in transmission infrastructure and upgrading the grid with better technology. "The focus is now on grid stability so most of the states are inviting high level of investment," said Pal. (UNTANGLING THE WIRE)
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Under IPDS, the Centre would help by way of extending financial assistance to the state to create distribution infrastructure in urban and semi urban areas. Besides the IPDS, regional transmission plans could also push up investment. One such programme, recently approved by the Union Cabinet, was strengthening of the intra-state transmission and distribution system in Arunachal Pradesh and Sikkim at a cost of Rs 4,754.42 crore.
Indian Electrical and Electronics Manufacturers Association (IEEMA) reported a fall in manufacturing for the sector during 2012-13 - the first time in 10 years. Manufacturing of electrical equipment was growing at 11.3 per cent and 13.7 per cent in 2009-10 and 2010-11, respectively, decelerating to 6.9 per cent in 2011-12. The transmission and distribution equipment sector witnessed a negative growth of 7.8 per cent in 2012-13. In 2013-14, there was a minuscule growth of 3.5 per cent in the production.
According to IEEMA, between 2005-06 and 2013-14, India's imports of electrical equipment have increased at a compounded annual growth rate (CAGR) of 19.73 per cent in rupee terms and were at Rs 58,354 crore in 2013-14. Out of this, imports from China touched Rs 22,680 crore in 2013-14, growing at a CAGR of 34.57 per cent in the last eight years.
Power supply in the urban parts suffers from aggregate transmission and commercial losses of 25 per cent. Add to it power theft and it increases to 35 per cent (45 per cent in tier-II and tier-III cities). This, coupled with a lack of cost reflective tariffs, leads to poor financial health of the power distribution companies across the country.
According to Rakesh Sarin of Wartsila India, given the low supply of coal and its mixed quality in the country, there needs to be flexible power plants in the country.
With around 250 such plants across the country, Wartsila is looking at a major demand once the plans for smart power generation are crystallised by the government. ABB, Wartsila and several others in the sector are hoping for a major push in the demand for efficient and next generation technology in the power transmission sector. PowerGrid Corporation of India recently cleared a backlog of around Rs 1-lakh crore by tendering out transmission projects to private companies, awaiting action in the sector.
Sterlite Technologies - 45 per cent of its revenue comes from Powergrid projects - is now looking at an order book of Rs 5,000 crore, up from Rs 2,000 crore six months ago. Executives in the company said that with increased focus on transmission, the country would see important projects on ground by 2017-18.
