Electricals Today February 2013 Issue

An ITP Publishing India Publication

Total number of pages 52Volume 1 | Issue 1 | February 2013 | `50

ETELECTRICALS TODAYMORE POWER TO THE INDUSTRY

FACEOFFTATA POWER SOLAR CEO AJAY GOEL EMERGES FROM THE SHADOWS

AND TAKES THE CHALLENGES PLAGUING THE SECTOR, HEAD ON

POLYCAB VICE-CHAIRMAN TO REINVENTCOMPANY

T&D LOSSES:POLITICALAPATHYTO BLAME?

CENTRAL GOVT LIFELINE FOR STATE DISCOMS

FOCUS

PLUS

3

CONTENTS

FEBRUARY 2013 | Electricals Today

SpreadingSpreading

12

38 24

18 Cover storySolar PV manufacturing needs government support to survive, says Ajay Goel, CEO, Tata Power Solar

24 Straight talkWith stronger systems, smoother processes and better controls, R Ramakrishnan, vice-chairman, Polycab Wires, promises to reinvent the company

38 InterviewSrikanth Chandrasekaran, senior regional programme manager, Standards, IEEE-SA, on training professionals in global standards development

12 T&DLack of political will is making it diffi cult to stop electricity theft, resulting in huge T&D losses

30 DiscomsWill the debt restructuring announced by the Centre for seven cash-strapped state distribution companies be enough to turn them around?

42 Energy efficiencyIs LED technology, often touted as the future of eco-efficient lighting, the key to sustainability?

6 News, people & eventsIndustry round-up, including new appointments and the latest developments

46 Market dataWe look at key statistics and fi gures, and analyse emerging trends

50 Ten things about...Solar grid tied system and the benefi ts of using it

PEOPLE

REPORTS

REGULARS

Ajay Goel

3

“If we have to become a world-class solar cell manufacturer, we would need support from the government.”

18

Electricals Today | february 2013 4

CommEnT

ITP Publishing India Pvt LtdNotan Plaza, 3rd floor, 898, Turner Road

Bandra (West), Mumbai - 400050

T +91 22 6154 6000

Deputy managing director S Saikumar

Publishing director Bibhor Srivastava

Group editor Shafquat Ali

Editorial teamNiranjan Mudholkar, Imran Mirza, Nirmal Menon

Shiv Joshi & Syed Ameen Kader

AdvertisingBusiness head Hafeez Shaikh

T +91 98331 03611 [email protected]

StudioHead of design Milind Patil

Designer Reshma Jhunjhunwala

ProductionDeputy production manager Ramesh Kumar

[email protected]

CirculationDistribution manager James D’Souza

T +91 22 6154 6032 [email protected]

Cover Image Arkodeb Mukherjee

DisclaimerThe publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publica-tion are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication, which is provided for general use and may not be appropriate for the readers’ particular circumstances.

The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted

in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review.

Printed and Published by Sai Kumar Shanmugam, Flat no 903, Building 47, NRI Colony, Phase – 2, Part -1, Sector 54, 56, 58, Nerul, Navi Mumbai 400706, on behalf of ITP Publishing India Private Limited, printed at Repro India Limited, Marathe Udyog

Bhavan, 2nd Floor, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400 025, India and published at Notan Plaza, 3rd floor, 898,

Turner Road, Bandra (West), Mumbai - 400050

Editor Shafquat Ali

Published by and © 2013 ITP Publishing India Pvt Ltd

Volume 1 | Issue 1 | February 2013

ETElEctricals todayMore power to the industry

If things don’t exactly go the way Tata Power Solar CEO Ajay Goel wants, there is a good chance that the lights will go out at the company’s manufacturing plants.

And the irony, if that happens, is that it will not mark an eclipse for the sector. Far from it. In a candid interview with ET, Goel says the sunset in the country will only coincide with the sunrise in China as Tata may then take its investments to the land of the dragon.

But the question is: why is Goel contem-plating such a drastic move? More so as the CEO admits, in much the same breath, that he is “bullish” about the Indian market.

“We don’t have enough support from the government,” he scoffs. “The solar manufacturing sector in India is in dol-drums and the government is not deliver-ing on its promises. Since the Chinese government is willing to offer support, why shouldn’t we go there?”

By all accounts, the Indian government started out with the right intentions and launched the ambitious Jawaharlal Nehru National Solar Mission (JNNSM) to promote solar power and encourage local manufacturing in 2010. But less than three years later this, like other such missions, is proving to be one more hollow promise.

Unlike the Chinese government, which is happy to pump in billions of yuans to keep its local solar manufacturing industry afloat, the Indian government is still plug-ging holes in Phase-I of the JNNSM. And while the powers that be are at it, it will be a pity if India’s largest solar manufac-turer decides to say tata (goodbye) to the country’s sunshine sector and set sail for Chinese shores.

Dark side of the sun

Shafquat ali,Group editor, itp [email protected]

04_ET_Feb13_Ed letter.indd 4 09-02-2013 13:23:01

Electricals Today | FEBRUARY 2013 6

NEWS

NEWS & PEoPlE

transmission sector falls short of its target

OTC COnTraCTs fOr deC, wiTness dOwnfall

Suzlon to reStructure $1.8 billion debt

The transmission sector has thrown up a dismal performance during the month of December 2012. The sector managed to achieve just 54 per cent of the envisaged target for transmission lines to be strung during the month.

For the month of December, a total 1,957 ckm (1,638 ckm of 400 kV, 241 ckm of 765 kV and 78 ckm of 220kV) of transmission lines were laid out, as against the targeted 3,604 ckm (2,385 ckm of 400 kV, 243 ckm of 765 kV and 976 ckm of 220 kV).

Further, the last month of the year saw installation of 400 kV sub-stations worth 515 MVA and 220 kV sub-stations worth 1,240 MVA as against a target of 1,260 MVA and 2,030 MVA, respectively.

As on December 31, 2012, a total of 9,432 Ckm of 500 kV HVDC transmission cables have been laid, along with 6,459 Ckm of

765 kV lines, 1,13,184 Ckm of 400 kV lines and 1,39,205 Ckm of 220 kV lines.

Alongside, 11,000 MVA worth of 500 kV HVDC converter sub-stations, 765 kV sub-stations

worth 45,000 MVA, 400 kV sub-stations worth 1,60,752 MVA and 220 kV sub-sta-

tions worth 2,35,959 MVA have been installed, thus far.

During December 2012, nine transmission lines of 1,957 ckm length and 10 sub-stations of 1,755 MVA capacity

were commissioned in the country.

The month of December 2012 witnessed a significant downfall in short term Over the Counter (OTC) contracts compared to November 2012. There was a 42 per cent decline from 3,699.79 MUs in Novem-ber 2012, to just 2,142.96 MUs for the contracted volume in December 2012. Although the number of traders increased from six to eight within those two months, the number of contracts decreased from 154 in November 2012 to 150 in December 2012.

Wind energy major Suzlon has said its lenders, comprising 19 banks, led by the State Bank of India (SBI), have approved proposal to rejig Rs9,500 crore of domestic debt. “The empowered group of Corporate Debt Restructuring (CDR) cell comprising 19 lenders formally approved our CDR proposal to recast Rs9,500 crore of domestic debt. The package is effec-tive from October 1, 2012, and does not include our foreign currency debt,” Suzlon said in a statement.

The Tulsi Tanti-promoted company said the CDR proposal involves a 10-year door-to-door back-ended repayment plan with a reduced inter-est rate, which effectively means a 3 per cent savings on interest.

9

Shortfall in target for transmission

lines

46%

Dismal: only 54% of the target for transmissionlines to be strung during Dec. 2012 was met.

6-11_ET_Feb13_News.indd 6 08-02-2013 17:58:45

7FEBRUARY 2013 | Electricals Today

NEWS

EWS & PEOPLE>>>TATA POWER LOOKING FOR MORE HYDRO PROJECTS

JSPL BAGS RS500 CRORE ORDER

Tata Power is actively looking at oppor-tunities to develop hydro projects as part of its efforts to boost its renewable energy portfolio which is expected to make up about one fourth of its overall generation capacity by 2020. The coun-try’s largest private power producer is already developing hydro projects in India, Nepal and Bhutan.

“The company is also looking at other opportunities (in hydro power) to bid in the near future,” Tata Power MD Anil Sardana said. Tata Power and Norway-based SN Power’s joint venture is developing an 880 MW hydro project in Tamakoshy, Nepal.

Jindal Steel and Power (JSPL) has bagged a Rs500 crore order from Power Grid Corporation of India Ltd (PGCIL) for supply of 80,000 tonnes of steel which will be used in setting up two transmission towers in south India. “We are happy to bag the PGCIL order for setting up transmission towers. The order will be executed from February onwards,” a company spokesperson said. The Naveen Jindal-led steelmaker will be sup-plying rolled back angle sections for tower packages associated with 765 KV d/c current Vamagiri-Kham-mam-Hyderabad transmission line and 765 KV d/c Nagapattinam-Salem-Madhugiri transmission line.

11

The country is currently importing 80 per cent of its crude oil requirements.

This may increase to 90 per cent by 2030 and will impact the growth of the country.”

Increasing energy requirements coupled with a slower-than-expected

increase in domestic crude oil and natural gas production has led to a strong reliance on imports.”

India’s investment cycle is inextricably linked to the

power cycle as 30 per cent of our capex is determined by the

power sector.”

Measures to scale up renewable energy and

expedite the exploration and production of oil, gas and coal

to enhance domestic production need to be put in place.”

Jyotiraditya Scindia, Union minister of state for power

Veerappa Moily, Union minister for petroleum and natural gas

Salman Khurshid, Union minister for external affairs


NEWS

WiND eNergy CApACiTy ADDiTiON TO Dip DUriNg Fy 2013The double whammy of high interest rates prevailing in Fy 2013, coupled with a rollback of incentives, will see india witnessing its weakest wind energy capacity addition in seven years, sector players and experts said. The country may be able to add only 1,500 MW of new wind energy capacity in the Fy 2013, missing the target of 2,500 MW set at the beginning of the year.

According to data from Central electricity Authority (CeA), india has added about 1,068 MW of new wind energy capacity till December 2013. “in the last few years, the wind energy sector exceeded targets with private investments driving its growth. Last year alone, india added 3,000 MW and we could have continued the momentum. However, without incentives, a lot of projects have become unviable and we may be able to add only 1,500 MW this year," said ramesh Kymal, chairman of indian Wind Turbine Manufac-turers Association.

>> > aT a glaNcEgMR’s Kamalanga thermal power plant synchronisedThe first unit of GMR Group’s 3X350 MW coal-based power project at Kamalanga, near Dhenkanal in Odisha, was successfully synchronised with the grid on January 27. This is GMR’s second coal-based power plant to be synchronised. Work on commissioning the second and third unit is in progress. The project has been implemented on multiple packages concept and is the first IPP in Odisha under MoU to have synchronised with the grid. The project will cater to the power needs of various states of India including Odisha.

SEIl inaugurates new thermal power plantSteel Exchange India Limited (SEIL), inaugurated a 60 MW thermal power plant with a capital investment of Rs315 crore under Simhadri Power Limited (SPL), a special purpose vehicle (SPV) promoted by the company at Sreerampuram village in Andhra Pradesh. The plant will cater to SEIL’s power need to a large extent. SPL will supply 51 per cent, of the power generated for captive consumption by the units of the company and the balance will be exported through merchant sale. Managing Director of SEIL B Satish Kumar said, “We are extremely pleased to launch the captive power plant. With this the company will have substantial savings in costs apart from assured supply of power.”

WPI of ‘Fuel and Power’ increases by 0.1 per centThe Wholesale Price Index (WPI) of major group, ‘Fuel and Power’ rose by 0.1 per cent for the month of December, 2012. WPI rose from 188.8 (Provisional) in November to 188.9 (Provisional) in December due to the higher price of bitumen (17 per cent). However, the price of furnace oil and aviation declined by 2 per cent and 1 per cent respectively. The annual rate of inflation, based on monthly WPI, stood at 7.18 per cent (Provisional) for the month of December, 2012 (over December, 2011) as compared to 7.24 per cent (Provisional) for the previous month and 7.74 per cent during the corresponding month of the previous year. Build-up inflation in the financial year so far was 4.72 per cent compared to a build-up of 5.22 per cent in the corresponding period of the previous year.

Merchant prices to rise during FY 2012-13: Fitch ratingsThe shortage of domestic coal coupled with the increasing demand for importing coal in India, will coax the merchants to increase their prices during FY 2012 -13. According to rat-ing agency Fitch, “The agency’s expectation is also supported by the continued high energy and peak deficits, increasing percentage of imported coal in overall coal supply and low PLFs for available capacities due to the ongoing coal crisis.” Fitch expects the prices to increase by Rs4/kWh – Rs4.35/kWh due to the improvement in the liquidity profile of the State Power Utilities (SPUs) post the tariff hikes, debt restructuring package and higher fuel prices.

Discoms are now in the driver's seatAs per the Electricity Act, all 1 MW consumers are deemed as open access consumers and the state regulator has no jurisdiction over fixing charges for them. The Forum of Regulators (FOR) states that the Electricity Act is now being misused by various players and that discoms can now dictate terms and charge a higher price to the consumers. Also, with the introduction of the open access, the existing power purchase may get affected. The power ministry is now aiming to seek some clarity on the open access and will make a few modifications in the Act to ensure that the customers do not bear the burden towards such power purchase.

PFc bEgINS ShoRTlISTINg TSPS FoR SubSTaTIoN aT PaTRaNThe scope of work will include establishment, operation and main-tenance of the project. This will also contain surveys, formulation reports, clearance and permits, land compensation, engineering, construction, testing and commissioning. interested Transmission service Providers (TsPs) should submit their response to PfC's rfQ by March 11, 2013.

REc To ShoRTlIST TSPS FoR a NEW TRaNSMISSIoN SYSTEM scope of work will include establishment, operation and mainte-nance of the project on the build, detailed project report formula-tion, arranging finance, project management, necessary consents, clearances and permits, equipment, material, construction, erection, testing and commissioning. interested companies should submit their response to reC's rfQ before february 26, 2013.

No head winds: the 2,500-MW target is likely to be missed

6-11_ET_Feb13_News.indd 8 08-02-2013 17:58:52


NEWS

NTPC AND JSEB To gET BACk DEAlloCATED CoAl BloCkS

TECPro SySTEMS wIN rS139.8-CrorE orDEr

OPTCL aPPLIes fOr TransmIssIOn LICenCe

Power producer nTPC and Jharkhand state electricity Board (JseB) will soon get back the coal blocks that were deallocated by the central government, but they will have to develop the fields within two years. “soon the coal blocks of nTPC and JseB, which were taken back by us last year, would be given back to them. But the firms will have to develop these blocks within two years else we would take them back again,” Coal Minister sriprakash Jaiswal said. The decision was taken by a committee, chaired by additional secre-tary (ministry of coal) Zohra Chatterji in a meeting held recently, the minister added. The coal ministry had cancelled allotment of 14 coal blocks and one lignite block to both public and private firms in May last year for not developing the fields within the stipulated time. The five coal blocks of nTPC which were taken back include Chatti Bariatu, Chatti Bariatu (s), Kerandari, Brahmani and Chichiro Patsimal.

Tecpro systems limited, a leading engineering, Procurement and Con-struction (ePC) player, has announced that it has received an order worth rs139.8 crore from the west Bengal Power development Corporation (wBPdCl), a government of west Bengal enterprise, for supply of ash-handling plant turnkey package for sagardighi thermal power extension project, Phase-ii, units 3 & 4 (2x500 Mw) along with erection, civil and other related services. Commenting on the development, amul Gabrani, vice-chairman and managing director, Tecpro systems said, “This order from the west Bengal Power development Corporation ltd reiterates our strong coal handling and ash-handling capa-bilities, and further strengthens our commitment to offer comprehensive coal handling and ash-handling solu-tions for the power sector.”

Odisha power Transmission Corporation Limited (OpTCL), in collaboration with pOWergriD, has applied for a transmission license to develop intra-state transmission projects in the state. The Kalinga Bidyut prasaran Nigan Limited (KBpNpL) proposes to form a 50-50 joint venture in order to set up transmission infrastructure. Approximately 48,000 MW thermal generation capacity is expected to come up in the state by the end of the 12th power plan. Also the state demand is set to increase from 3,500 MW to 6,300 MW dur-ing the peak season. Due to this, additional transmission will be required to enable evacuation of power from upcoming generating units. The estimated cost is around rs10,000 crore for this additional transmission capacity.

MaaDhav DIgRaSKaR MD & cEo, cIIwith more than 30 years experience in the power industry, Maadhav digraskar has been appointed as the managing director and CeO of Cable Corporation of india (CCi). He is a firm believer in transpar-ency, system-oriented work environment. digraskar is known for encouraging a learning environment and at the same time enjoys nurturing young talent. Having proved his mettle over the years by serving the industry in various capacities, Maadhav has held various posts: chairman, MV & HV switchgear division, ieeMa; chairman, Cii, nashik Zone; head of manufacturing panel, Cii, western zone; and vice-president, lsi, niMa; member, executive council, ieeMa. in addition, he has worked as chief executive at KeC international ltd in the power systems divisions and was also a member of the management committee. at KeC international, he was globally responsible for substation, electricity distribution and cabling work related project businesses.

RaJEN guPTa, K. RaMalINgaM, MahESh Shah, R. KRIShNaMooRThY & aJaY KuMaR MITTalboard of directors, PgcIThe Power Grid Corporation of india ltd (PGCil) has informed the Bse that it has appointed five part-time, non-official directors to the board of the company. This appointment took place on January 16, 2013 and it will be for a period of three years or until further notice. The directors are: rajen Gupta, a member of the indian society of applied Behavioural sciences (isaBs) and professor of Human Behaviour & Organisa-tion development at the Mdi, Gurgaon, K ramalingam, executive director, airports authority of india, and Mahesh shah, former president of the institute of Company secretaries of india. in addition, PGCil has also appointed r. Krishnamoorthy, a former member of Central electricity regulatory Commission, and ajay Kumar Mittal, Ca.

Rajen Gupta

K Ramalingam

6-11_ET_Feb13_News.indd 9 08-02-2013 17:58:52


ENERgY EFFIcIENcY oPTIMISaTIoN SuMMITVenue: Sheraton, New DelhiDate: February 20-21The real challenge in the power sector in india lies in managing the upgrading of complex transmission, distribution and meter-ing methods efficiently. This summit is aimed at letting the par-ticipants gain extensive networking opportunities at the region’s largest combined conference boasting a guaranteed audience from the power and utility industry.

SavE PoWER ShoWVenue: Le Meridien, CochinDate: March 2-4The show is an excellent networking and knowledge-sharing platform for the stakeholders in the renewable energy sector. save Power show will showcase renewable energy and energy-efficient products and solutions under one roof, enabling visi-tors to acquire knowledge and information about the latest technology and the best solutions for their energy requirement.

INDIaN SolaR SuMMIT 2013Venue: Mahatma Mandir Convention Centre, Gandhinagar, GujaratDate: April 18-19with the aim to accelerate the number of solar installations in the country to reach a target capacity of 20 Gw by 2022, india has established itself as one of the most attractive renewable invest-ment markets in the world. in order to make this target a reality, india’s premier solar show – The indian solar summit and exhibi-tion – is back this year. learn about the latest technologies and development opportunities which are shaping the indian solar market.

RENEWablE ENERgY WoRlD INDIa 2013Venue: Bombay Exhibition Centre, Goregaon, MumbaiDate: May 6-8renewable energy world india 2013 shifts from new delhi to india’s financial hub, Mumbai, where the event was last held in 2010. with this move, the high-level conference and exhibition aims to expand its coverage from the northern part of india, which has been its main focus, to include the west and south. Under the theme, indian Power – Time to deliver, the event brings together decision-makers and professionals from leading companies involved in renewable energy generation, transmission and distri-bution within india and around the world.

PoWER-gEN INDIa & cENTRal aSIa 2013Venue: Pragati Maidan, New DelhiDate: May 9-11Power-Gen india & Central asia 2013 aims to showcase the latest technologies and solutions in the power and energy sector as well as gather industry leaders and professionals together on a single platform. The show will provide immense opportunities for com-panies and industry experts to network, develop business rela-tions and establish future business prospects. Keep up-to-date with the latest developments in the industry.

EvENTS

Balanceof power

DIaRY

6-11_ET_Feb13_News.indd 10 08-02-2013 17:58:53


DIARY

ThE bIg pIcTuRE

This is no tightrope walker. There are no prizes waiting at the end of the job for the young lad captured in the picture. And yes, there is no crowd to cheer him on. In fact, it is just another day in the life of a power line maintenance worker. But what we often forget is: this is no ordinary job. It takes a lot to perform maintenance work on electrical cables – and people like him often put everything on the line, pardon the pun, to ensure power reaches our homes.

6-11_ET_Feb13_News.indd 11 08-02-2013 17:59:12

LINEwhose


12-17_ET_Feb13_T&D.indd 12 08-02-2013 18:22:48

LINEis it anyway?

Power transmission and distribution (T&D) losses are common across the world. However, the problem is graver in India as T&D losses account for 24 per cent of its total output whereas developed countries like US (6 per cent), UK (7 per cent), China (5 per cent) and Australia (7 per cent) have managed to keep their electricity losses well below 10 per cent. Not surprising then that countering T&D losses — especially commercial losses — is proving to be a Herculean task. To make matters worse, there seems to be little or no political will to address this issue.

Lack of political will is making it increasingly difficult to stop electricity theft, resulting in huge T&D lossesBY SYED AMEEN KADER

13february 2013 | Electricals Today

Transmission & DisTribuTion

12-17_ET_Feb13_T&D.indd 13 08-02-2013 18:22:48

According to the government’s own estimate, India’s Aggre-gate Technical and Commercial (AT&C) losses are anywhere between Rs50,000 crore to Rs80,000 crore in a year. Power thefts and illegal hooking, which is rampant in India, accounts for much of the losses. If a market study conducted by Deloitte in 2010 is to be believed, an estimated one-third of all powers in India is hijacked, costing private utilities – Reliance Power and Tata Power – Rs27,500 crore a year.

Says Alok Gupta, former member, Central Electricity Author-ity (CEA), “The highest priority needs to be given to 100 per cent metering. Without that we won’t even know how much electricity is going into un-metered segment and how much is being simply stolen. The fact that agricultural supply is largely unmetered and charged on an HP basis, and not on the basis of units consumed, is used by everyone to push the thefts under the umbrella of agricultural supply.”

Internationally, 80 per cent of theft cases are reported in the residential sector in comparison to 20 per cent that is found in the commercial and industrial sector. But in India the commer-cial and industrial sectors account for 80 per cent of the total revenue loss from electricity theft.

POLITICS OF POWERElectricity has always been an electoral issue in India. Often, electoral manifestoes come with the promise of free power. Though the government’s offer is for free power to people liv-ing below the poverty line, the dole is never confi ned to them alone.

Also, a large number of industries, most of it in the unorgan-ised sector, continue to enjoy free power thanks to political patronage. Even if they are caught and punished, they get away with a light rap on the knuckle.

For power distribution companies, the challenge is not to identify the offenders or source of thefts but to be able to stop them from committing the offence. Under the Electricity Act 2003, electricity theft is a criminal offence but there is little will to prosecute the real offenders – industrial and commercial

users who choose to reduce their bills by stealing power from the grid.

According to a research report titled ‘Theft and Loss of Electricity in an Indian State’

by International Growth Centre, power theft is important eco-

nomically as well as politi-cally. “It occurs more often around election

time when well-off farm-ers are allowed to exceed their

allotted usage for private tube wells, and this proves electorally advantageous

to the incumbent member of the legislative assembly,” the report says. The London-based centre,

which works towards providing demand-led policy advice based on frontier research, used data from Uttar Pradesh. Its analysis shows that power theft is deliberate political strategy


SPOTLIGHT

Estimated loss per annum to private utilities due to power theft

Rs crore27,500 For power distribution companies, the challenge is not to identify the offenders or source of thefts but to be able to stop them from committing the offence.

The highest priority needs to be given to 100-percent metering. Without that we won’t even know how much electricity is going into un-metered segment and how much is being simply stolen.”

It (power theft) occurs more often around election time when well-off farmers are allowed to exceed their allotted usage for private tube wells, and this proves electorally advantageous to the incumbent member of the legislative assembly.”

After restructuring, we made it compulsory for every field officer to deal with thefts in their area. Now we are doing anti-theft drives for a week every month.”

aLok guPTaFormer member, CEA

Research by London-based International Growth Centre

ram DoTonDEspokesperson for Mahavitaran, the discom in Maharashtra



12-17_ET_Feb13_T&D.indd 15 08-02-2013 18:22:50

Under the Electricity Act 2003, electricity theft is a criminal offence but there is little will to prosecute the real offenders – industrial and commercial users who choose to reduce their bills by stealing power from the grid.

and not a by-product of weak institutions. The report suggests three policy changes: power company officials need to be

sheltered from political interference; the state govern-ment needs to adopt a policy of metering agricultural

energy use; and the latter should occur in the context of a general policy study of the

overall costs and benefits of the current electricity pricing scheme, which

subsidises agricultural users.While the first may be little diffi-

cult to achieve, with proactive regulatory commissions such as the ones in Delhi, Maha-

rashtra and Gujarat, incidence of theft is coming down dramatically.

On the other side of the spectrum, 17 states still report T&D losses in the region of 20-40 per cent. The new restructuring plan announced by the finance ministry for the sector directly

links reduction losses with availing central government finance for reducing distribution company losses.

After unbundling in 2005, Mahavitaran took the route of putting more bodies on street to curb theft. Says Dotonde, “Before the restructuring, we used to have only 36 flying squads for detecting thefts and losses. Their job was to go around and check the installations. But after the restructuring, we increased that number to 150 flying squads.”

He adds: “We also educated our field staff and engineers. Ear-lier, it was not their duty to go after the thieves. After restructur-ing, we made it compulsory for every field officer to deal with thefts in their area. Now we are doing anti-theft drives for a week every month. We have also introduced photo-meter bill-ing where we take out the photograph of the actual meter and print it on the bill so that consumer does not have complain about bill amount. Mahavitaran also set up dedicated police stations to deal with cases of power theft.”


sPoTLighT

T&D losses in India24%

12-17_ET_Feb13_T&D.indd 16 08-02-2013 18:22:51

bhiWanDi: a suCCEss sToryIn order to improve power distribution in Bhiwandi, a tiny textile town on

the outskirts of Mumbai, state utility firm Maharashtra State Electricity

Distribution Company Ltd (MSEDCL) had entered into India’s first

distribution franchisee agreement with Torrent Power in 2007.

That’s the time when Bhiwandi used to pay only 40 per

cent of total electricity it was consuming. Today, Bhiwandi

is seen as a success story for public-private partnership

in power distribution.

In just four-year time, the company was able to

do 99 percent metering and bring down loss below

20 per cent.

The model adopted was input-based franchisee, with

Torrent agreeing to purchase power from MSEDCL at

yearwise fixed input energy rate for a period of 10 years.

The company was given mandate to execute

distribution with other responsibilities including metering,

billing, revenue collection, repair and O&M cost of network.

The model really worked here and power-loom operators now

get 20 hours of power supply compared with 12 hours that they used

to get until 2007.

roLE oF TEChnoLogySome part of the solution may come from modern technolo-gies. India needs to use technology that can not only detect power theft but should be equipped to disconnect/re-connect power supply remotely in such cases.

Points out Gupta, “Unless we start using modern technolo-gies, the rate at which we are going it will take us another 10 years to reach 20-percent loss mark. Though we are going in the right direction, we are going very slowly.”

The government has taken a few initiatives of late to reduce T&D losses through modernisation. But those steps have been able to bring down the technical losses by mere 1 per cent in the inter-state and inter-region transmission networks. How-ever, the smart grid system, which is being implemented on a pilot basis in many states, will help bring greater efficiency into the sector.

Power Grid Corporation of India Ltd has started imple-

menting several smart grid pilot projects in the transmission sector. A pilot project in the northern region involving wide area measurement system using phasor measurement units and associated hardware and software at the control centre has already been implemented. A similar project covering all states and the inter-state transmission system network has been taken up for regulatory approval of the Central Electricity Regulatory Commission (CERC).

In distribution, PowerGrid has taken up implementation of a smart grid pilot project at Puducherry, involving installa-tion of Advanced Metering Infrastructure (AMI) with a central data control. This solution will not only help the electricity department monitor energy usage patterns online but also detect any meter tampering and power theft. What’s more, the system will benefit the consumers as they will be able to track their usage, thanks to real-time accurate billing. The system will also have a remote disconnect/reconnect facility.



12-17_ET_Feb13_T&D.indd 17 08-02-2013 18:22:51

to reflecttIMeSolar PV manufacturing needs government support to survive, says Ajay Goel, CEO, Tata Power Solar BY IMRAN MIRZA

Seven months ago when Ajay Goel took over as the chief executive of Tata Power Solar, things were far from rosy. And much to Goel's chagrin, things haven't improved since then as the industry continues to be eclipsed both by global challenges

— excess supply, Chinese dumping, etc. — and local issues — policy paralysis, inadequate government support and more.

To make matters worse, problems are far from over for India’s largest solar company. The Indian government had launched the ambitious Jawaharlal Nehru National Solar Mission (JNNSM) in 2010 to promote solar power and develop a strong domestic solar manufacturing industry. However, two years down the line, the government is in a dilemma: should it support the local manufacturers and risk delaying grid parity or should it allow imports of modules to lower the cost of solar power?

Goel has the answer. India’s solar manufacturing industry is in the doldrums, he argues, and to survive it needs govern-ment support.

A Centre for Science and Environment (CSE) report states that currently, 80 per cent of Indian manufacturing capacity is in a state of forced closure and debt restructuring with no orders coming to them. But Goel is far from pessimistic. On the contrary, he is surprisingly upbeat. “The market is in a pretty exciting stage,” he says. “India as a country needs solar energy. We see the market in India growing in all the three dimensions i.e. larger projects, corporate institutions setting up rooftop projects and rural off-grid projects. We are quite bullish about the Indian market.”


covEr STory

18-23_ET_Feb13_Cover story_ solar.indd 18 09-02-2013 09:40:46

to reflect

“If we have to become a

world-class solar cell manufacturer,

we would need reasonable level of

support from the government. If not, why

wouldn’t I set up the next manufacturing unit in China instead of India, because the

Chinese government is willing to offer that support? Why

shouldn’t we go there?

PHOT

OGRA

PH: A

RKOD

EB M

UKHE

RJEE


Off-grid


Our Chinese competitors are more than happy to price their products where they are losing money on every sale, on a cash cost basis. They are motivated by the volume of exports and not profitability.”

grOWTH driVErSThere are two things that would drive the growth. One is Renewable Purchase Obligations (RPOs) wherein corporations are expected to either generate some amount of renewable power or buy Renewable Energy Certificates (RECS). The other, more compelling, one is: lack of power.

“People who do not have continuous availability of power find it much more economical to shift to solar energy than to use diesel generators for more than six hours in a day,” quips Goel. Diesel-based power costs almost twice as much as solar power on a per unit basis in India.

He continues: “India is a subsidy-driven market. The Indian government has always maintained it wants to encourage local solar manufacturers under the Jawaharlal Nehru Solar Mission (JNNSM). There were, of course, some loopholes, which it is now trying to fix in Phase-II i.e., moving to thin-film, allow-ing imports, etc. And that is not because they like thin film better, but because of cheaper financing that they get from outside India.”

Cheaper financing is a twin-edged sword for the solar sector. A CSE report last year states that the US Ex-Im bank and

Overseas Private Investment Corporation (OPIC) have been offering interest rates as low as 3 per cent

and longer repayment schedules of up to 18 years to solar project develop-

ers in India under the climate change fund. Indian

banks currently are offering rates of

nearly 14 per cent. “At the end of the day, it’s a

business investment – people will gravitate towards lower interest rates.

But the lower interest rates must not be tied to products that are built outside India. It just happens to

be a very convenient route. Tomorrow, if the import loophole for thin film is fixed, there will be other ways to bring low-cost capital into India to fund these projects,” explains Goel.

SOLAr ECLiPSE drAgONGoel, like the rest of his peers, believes that the dumping of Chinese panels is killing the solar market. “Right now, China is to solar what Saudi Arabia was to oil. The Saudi Arabian cartel controlled the oil prices in the 70s and 80s, which is what China is doing to the solar PV market currently.”

He insists that although the government is investigating and is mulling over imposing anti-dumping duties, the Chinese onslaught is real. “There is an oversupply of PV modules glob-ally,” Goel elucidates. “It is largely driven by the fact that the Chinese government gave immense subsidies and incentives to their manufacturers, who ramped up their capacity levels too fast, leading to the problem of oversupply.”

But is it only a case of dumping? Or are Indian manufacturers unable to match the costs of their Chinese competitors? Goel explains why he’s convinced that dumping is indeed happen-ing. “Our costs are already fairly competitive to the Chinese. That’s one fallacy that we have a cost problem, when it comes


COVEr STOry

Estimated Indian solar manufacturing capacity lying idle t

80%


to manufacturing. The issue is not a cost issue, it’s a pricing issue. We are not willing to price our products, where we lose money on every sale. Our Chinese competitors are more than happy to price their products where they are losing money on every sale, on a cash cost basis. They are motivated by the volume of exports and not profitability.”

Further substantiating his conviction, Goel continues, “We have also spoken to some Chinese manufacturers to look for partnerships and their cost structure. We’ve found that their costs are no better than ours – they are equally costly.”

By all accounts, in China the badge of honour is how much you export. The question then is: If you are one of the few com-panies who have excess capacity, how will you survive?

Goel’s take on the Chinese predicament is straightforward: “Survival depends on the government not calling in its loan. The loan will not get called in as long as you can show export orders, no matter what price they are at. Some Chinese manufacturers, especially the bigger ones, have debt anywhere between 10

to 30 times their revenue. They aren’t even looking at servicing their debt. They are aiming for survival, not for profitability. We can match their costs, not their pricing.”

TOWArdS grid PAriTyThings, however, are not as simple as they appear. In fact, the government has a tough choice. It can either protect solar manufacturers by imposing anti-dumping duty or reduce the cost of power and achieve grid parity for solar energy by allow-ing cheap imports.

The government, for its part, is dragging its feet. Goel says that not taking any action will make solar energy uncompetitive.

Current solar technology is running out of steam in terms of cost reductions. What will lead us to the next phase of cost reduction and grid parity is the next phase of new technologies for manufacturing solar modules. But obviously not much head-way has been made in this direction. The reason for this, says Goel, is that no one is willing to take the risk to invest in R&D


Off-grid

Thrust areas for promotion of solar manufacturing capability during Phase-II • DevelopmentofcompletevaluechainforbothPVandthermalinIndia

• Off-gridspecialproductsforruralapplications

• Manufacturingofsolargrademirrors andglasses

• DevelopingcapacitytodevelopcomponentsandmaterialslikeHeatTransferFluid(HTF)

• Thermalstoragesystems

• Solarconcentratedglasses • Inverters

• Permanentmagnetandothermotors forsolarpumps

CHECK-LIST


due to cheap Chinese imports and dumping. Thin films, for exam-ple, were being pushed as an alternative to reduce the amount of polysilicone that goes into making a panel. “Unfortunately or fortunately, the prices of polysilicone itself have reduced drasti-cally, making the value proposition of thin films versus crystalline panels very weak,” says Goel. Today, the cost difference between a crystalline module and thin film is negligible.

Goel elaborates, “In the next phase of solar innovations, we will see a combination of different technologies – thin

film, crystalline, epitaxial wafers, Copper Indium Gallium Selenid (CIGS), etc. A lot of innovating

companies are struggling to get these innovations funded from pilot to

production. They come to us for implementing these new technolo-

gies. But we haven’t been able to make the most of the current investments, so we

cannot make any more at the moment. This is how the dumping of modules is slowing down the momen-

tum towards achieving grid parity.”

COMiNg OUT Of THE CLOUdSThe next few years would be critical for the solar sector. It would also be interesting to see how the larger solar companies work out their strategies. There won’t be any consolidation – smaller companies would choose to shut down rather than run idle for months at stretch. There won’t be any mergers or takeovers as

the larger solar manufacturers themselves have nearly 70 per cent excess capacity.

Goel feels that the current situation will correct by itself. Reposing faith in the government, he says, “Policies take a couple of iterations to get it right. It’s hard to predict how the market evolves. But what’s more important is that the intention is there. The government will probably fix the current loopholes in the Phase of JNNSM.”

The government is trying to clamp down on dumping of modules by Chinese manufacturers in India similar to what’s hap-pening in US and Europe. However, Goel feels that more needs to be done if the government wants to support local manufacturers. “We have made some investments in solar manufacturing which


COVEr STOry

Cumulative target for Phase-III

(2017-2022)

2 gW

COVEr STOry

WHATNSMENVISAGESInstallationofaround10GWutilityscaleand1GWoff-gridsolarpowerprojectsbytheendofPhase-II.

Capacityadditionof10GWofgridconnectedsolarpowerforthe12thFive-YearPlan(2012-17).

Outofthe10GWtarget,4GWwouldbedevelopedundercentralschemeand6GWundervariousstate-specificschemes.

Manufacturing capacity component capacity

Ingots and wafers 15 MW

Solar cells 848 MW

Solar modules 1932 MW

AmanwithasolarcookerinZanskar,Ladakh:Around 20,000 villages, hamlets and settlements would be covered through ‘Energy Access’ scheme during Phase-II of JNNSM through off-grid electricity generation projects


is currently severely under-utilised. So we run red ink because we have made investments, built factories, bought plants and are now sitting idle. So, tomorrow, if the government comes up with more incentives to buy equipment and enhance capacity, there would be no takers until the demand side problem is fixed, including Chinese imports and other policy issues.”

But what if the government fails to address these issues in the right way? “If we don’t get support from the Indian government, we would have no choice but to phase-out our cell manufac-turing unit,” he confesses. “We have invested crores of rupees in increasing our capacity, 10 years ago for exports and then recently about five years ago for the JNNSM. These capacities are now sitting idle. Around 50 per cent of our total cell manufactur-ing capacity is in an idle state – it would take only a few months to get it up and running. The remaining 50 per cent is running at about 25 per cent utilisation,” he reveals.

“For our projects, we end up using imported cells instead of Indian cells simply because it’s cheaper to import these cells. We can buy cells at a cost which is below our cash cost of building them. It’s like installing an expensive cooking range at home and then ordering in food everyday because the restaurant is selling food cheaper than cost of materials,” Goel points out.

The VC funding has also dried up – last year was the worst for solar funding as there were hardly any investment announce-ments. “This is the right inflection point for solar manufacturing in India – the government must act now,” says Goel. “As a part of Tata group, we are committed to investing in the next genera-tion of manufacturing technologies. For projects, for example, rooftops, etc. we are world class in terms of our cost structure. We

are working on a number of innovative technologies, particularly in balance of system, better inverters, better structures and more productive installations.

“The projects business will grow faster and the product busi-ness will grow eventually. But whether we will invest in our India manufacturing is somewhat debatable. As a group, nearly 60 per cent of our revenues are coming from outside India. If we have to become a world-class solar cell manufacturer, we would need reasonable level of support from the government. If not, why wouldn’t I set up the next manufacturing unit in China instead of India, because the Chinese government is willing to offer that support? Here, we have to borrow money at 10-12 per cent inter-est, whereas the Chinese government will offer free loan, free land, reliable power, why shouldn’t we go there?” asks Goel.

The writing on the wall is clear. If the government does not take concrete and immediate steps to save the solar manu-facturing sector, it would fail to achieve a critical goal of the JNNSM. Difficult as it may be, large players like Tata Power Solar and a few others, who are also active in the EPC space, may have the muscle to shine through the dark clouds. But, for smaller manufacturers, inaction on part of the government would mean a total eclipse.

As a part of Tata group, we are committed to investing in the next generation of manufacturing technologies. But whether we will invest in our India manufacturing is somewhat debatable."

Off-grid solar applications

Solar collectors

1,100 MW

200 MW 1,000 MW 2,000 MW

7 million sq. m

15 million sq. m

20 million sq. m

4,000-10,000 MW

20,000MW

Segment Target for Phase-I (2010-13)

Cumulative target for Phase-II (2013-17)

Cumulative target for Phase-III (2017-22)

Utility grid power including rooftop

PHOT

OGRA

PH: A

RKOD

EB M

UKHE

RJEE


OFF-GRID


STraighT Talk

Our growth rate of around 25% over the last one year has only encouraged

us further. We are looking at becoming a Rs10,000-crore company in the next five years.”

PHOT

OGRA

PHS:

ARK

ODEB

MUK

HERJ

EE

24-28-ET_Feb13_Polycab.indd 24 08-02-2013 18:28:27


TranSmiSSion & DiSTribuTion

BY NIRANJAN MUDHOLKAR

cable guytheWith stronger systems, smoother processes and better controls, R Ramakrishnan, vice-chairman, joint MD and group CEO of Polycab Wires, promises to reinvent the company

r Ramakrishnan, vice-chairman, joint MD and group CEO of Polycab Wires, took charge of his job less than a year ago. And he is raring to go. Among other things, Ramakrishnan aims to reinvent the company and, what’s more, promises to change the face of the

industry.However, the one thing that strikes you most about this young

man is his ability to mix business with pleasure. He has an uncanny knack of extracting business lessons from arts and sports. Take, for example, his love for photography and golf.

With a handicap of 30, he has won many corporate tournaments but more than his standing in the game, Ramakrishnan enjoys drawing parallels between golf and his professional life.

“Golf teaches you integrity and the spirit of giving your best irrespective of the surroundings,” he quips. “Like in business, in golf you are always aware of your strengths and weaknesses. You know exactly what set of assets you have and what’s your current standing.”

He goes on to add: “Unlike in most other games, the ball in golf is always at a standstill position before you hit it. Importantly, in both the situations, the goal is known to you. And it is up to you to reach it as quickly as possible.”

In a candid interview, Ramakrishnan talks about himself, his new position and what he plans to do for the company and the wire and cable industry. Excerpts:

What is your analysis of the indian wire and cable industry?The wire and cable market is growing at a steady pace, thanks to the government’s heavy investments in infrastructure develop-ment. Increase in capacity of existing power plants and commis-sioning of the new ones has resulted in higher demand for electric wires and cables. The need for electric wires and cables is likely to increase in the future.

The growth drivers also include huge investments made by various private companies in the power sector as well as increasing budget allocation by the government for the power sector. Inci-dentally, the government is the largest consumer of cables in India. Government impetus in refineries, power and fertilisers will also offer a boost as almost all manufacturing companies that need cables. Robust industrialisation is the other important driver.

Additionally, growth will be fuelled by rapid urbanisation that consumes cables and wires on a large scale. The market currently has some significant national players, however, if we were to look back, a number of leading players that were dominant to some extent have been superseded by new entrants.

There now seems to be a change in the

Polycab’s share in the Indian wires and cables market

22%



STraighT Talk

Indian cable sector, with a sharp increase in overseas investment and technology transfer in some sectors, notably high and extra-high voltage power cable. There is also an increased demand from the industrial sector which does not have to rely only on government projects. Apart from Polycab, other key players include Havells, Finolex, VGuard, Standard, Luminous and RR Kabel.

What is your market share? About 60 per cent of the cables and wires market in India is dominated by the organised sector while the remaining is with the unorganised sector. Polycab is the clear market leader with a total market share of 22 per cent. In fact, we are the top-of-mind recalled brand in the west with a dominating share of 55 per cent.

What was Polycab’s turnover for 2011-12 and how much are you expecting for the ongoing financial year? Our turnover was Rs3,500 crore in 2010-2011 and we have achieved Rs4,000 crore in the year 2011-2012. Currently we are expecting a growth of Rs5,001 crore in the current fiscal (2012-13). Our growth rate of around 25 per cent over the last one year has only encouraged us further. We are looking at Polycab becoming a Rs10,000-crore company in the next five years.

Our CAGR figure was 19 per cent over the last three years. In order to minimise market and currency risk and volatility in prices, Polycab is doing 100 per cent back-to-back hedging to avoid any risk and to protect its operating profit margin.

Do you see alignment between your targets and the current economic situation?We already have a market share of about 22 per cent and that gives us a lot of headroom. If the government does a few things like quick and correct decision-making, infrastructure investments and creating an environment that supports investments, we will reach a GDP growth of 7.5 per cent. If India is able to reach that kind of growth again, for a company like Polycab to maintain a CAGR of about 21 per cent is easily achievable considering the fact that we have clocked a CAGR of 29 per cent over the last one decade.

Currently, how many manufacturing plants do you operate? any expansion plans? Polycab currently has 10 state-of-the-art manufacturing units at Daman and six at Halol. These plants are spread across 250 acres.

The manufacturing set up is outsourced from world-renowned machinery and technology suppliers with constant

upgradation and expansion. We plan to expand our facilities in Halol by setting up an ultra-mod-

ern state-of-art plant across an area of 4.5 lakh sq ft. The group is also

looking at setting up three more plants

in Vadodara and its vicinity

in 2013-14.

Tell us about your forays into the international markets.

Polycab’s expected turnover for 2012-2013

5,001crorers



TranSmiSSion & DiSTribuTion

We intend to move into adjacent businesses. Initially, we are looking

at the switches segment and then we will look at switchgears, MCBs, lighting and other consumer appliances."

Our forays in the international markets are poised to grow each year by 40 to 50 per cent. Although Polycab exports to about 30 countries, the key focus area is in the MENA (Middle East and North Africa) region, which has a tremendous potential for growth. Due to the complexity of the cables required and also with quality of cables being of prime importance, it is the ideal platform for Poly-cab to capture the international oil and gas markets.

What are the key challenges faced by your sector?The challenges faced by the sector include increasing price, rise and competition from Chinese manufacturer. As the price of cop-per continues to increase, profit margins get squeezed and the product becomes uncompetitive in the international market.

how important is the role of r&D?R&D plays a major role in our industry, especially while considering the introduction of new and advanced technologies to strengthen the cable and wire sector. The adoption and absorption of new technologies in a phased manner, is essential for the balanced growth of this sector. Indigenous R&D base is also important to understand the various global innovations and applying the same to the Indian environment. Collaborative research, in a phased manner, is needed to bridge the gap between knowledge and technology (with rapidly changing technology).

There is need to form a proactive and collaborative R&D policy to develop innovative solutions to strengthen our industry through networking with research organisations, academic institutions and the industry. We recognise its role and responsibility in promoting sustainability and our strong corporate culture continues to give us a headstart. Our quest is to continue to introduce new and better products through improvement in environmental designs.

are you happy with Polycab’s progress so far? Where do you plan to take it?Polycab started as a small shop in the Lohar chawl area of Mumbai as Sindh Electricals. Today, it has become a powerhouse in the elec-trical industry in India. I would like to give credit to our CMD Inder Jaisinghani and his brothers for bringing the company where it is today. When Polycab entered this business there were several com-panies in this field. Over a period of time, many of those companies have either disappeared or are clocking turnovers in the region of Rs300-Rs500 crore. Polycab, in the meanwhile, has raced ahead beyond Rs4,000 crore today.

So, it has been on the bedrock of a very strong entrepreneurial base. On top of that, it has built a robust pan-India distribution network, has a tremendous amount of influencer relationship and also has a great deal of goodwill among builders, architects and consultants. All this augurs extremely well for the company, which has developed a powerful brand equity.

Today, we are at an interesting stage of evolution. Building on

RamakRishnan with the coffee-table book compiling photogRaphs shot by him duRing an afRica tRip:He has a knack of extracting business lessons from arts and sports.



STraighT Talk

WhaT ailS ThE PoWEr SECTor

“The industry has been obviously affected by the gov-ernment’s lack of decision-making. Also, thanks to the overall environment, infrastructure development has taken a backseat. Naturally, there is a reluctance to invest in the power sector. Secondly, distribution related reforms have not really kept pace.

“Government needs to do more to open up the distri-bution segment to the private sector. These things, plus reduction in interest cost, slightly better availability of credit and some level of pro-activeness in terms of land acquisition for industrialisation will result in a positive growth for the power sector.

“Also, from a macro economic perspective, if the Goods and Services Tax (GST) is given more priority, things could be much better. Every state – in fact every district – has different set of taxation. GST will bring in some kind of uniformity on this front.”

We are looking at the switches segment now. That’s a very natu-ral and logical extension. At a later point in time, we will be looking at switchgears and MCBs. We will also be looking at lighting. After that, we will look at other consumer-related items like fans and other appliances. The idea is to envelope our distribution channel and our dealer network with a wide range of product offerings.

any timeframe for the diversification?Probably over the next one-and-half years you will see a lot of these diversifications happening. You will see a lot action in this regard and it will all be properly phased out.

What is your formula for making profit?Profit is a consequence of getting five things right – your rev-enue growth, your margin improvements, your working capital, your fixed cost and, finally, the brand. Apart from that, if you have the right level of innovation while nurturing the right kind of people to support this kind of ambition, then a company can do very well.

What I am going to do is take the entrepreneurial zeal, vision and the risk-taking ability that Inder Jaisinghani has incorporated into this organisation and blend it with the right professional talent from an execution perspective. Strong vision with excellent execution is going to be our mantra for success. We will ensure much better customercare by providing the solutions required by our customers and, thereby, winning their trust.

the legacy of four decades, I would actually like to reinvent this company for tomorrow. I want to build stronger systems, smoother processes and better controls. While increasing the width and depth of our franchisee network as well as increasing our market share in the existing business, if we come up with more products in the electrical business and surround the customer with a wider product portfolio, we will become a much more profitable and much stronger company. Accordingly, we intend to move into adjacent businesses. Our wires are coming into people’s homes, so we would like to extend our reach there.

Distribution-related reforms have not really kept pace. The

government needs to do more to open up the distribution segment to the private sector.”



discoms

Another lifeline

30-36-ET_Feb13_Discom.indd 30 08-02-2013 18:29:40


discoms

The central government has announced a new debt-restructuring scheme for seven cash-strapped state distribution companies. But will this plan be enough to turn them around?

In principle, the restructuring should allow state discoms to upgrade infrastructure, curtail inefficiencies and improve their operating performance and credit profiled.”

Conceptually, debt restructuring plans for the discoms are appreciated. It will reduce one of the main risks slowing down investments in the power sector.”

This is a good framework to start with. This also makes the states realise that they are required to take responsibility. All the time, the Centre cannot act as a saviour.”

RaTing agEncy FiTch

hEmanT Joshi senior VP, corporate finance and treasury, CLP India

gopi KRishna pAVP, Project Advisory and Structured Finance, SBI Capital

BY LIZA V

it was the result of sheer persuasion and pressure. Persuasion from state distribu-tion companies (discoms) that didn’t have any other source to turn to and pressure from generators who have not

been paid for months compelled the centre to offer a lifeline to the sector that looked grim with each passing month.

Just the accumulated losses of the state discoms were estimated to be about Rs1.9 lakh crore as on March 31, 2011, and Rs2.46

lakh crore as on March 31, 2012. The current financial health of the discoms is in turn posing

a threat to the banking system as lenders are too close to their sectoral lending ceilings for comfort.

That there is a requirement for some drastic measures and a need for the state governments to stop treating the discoms as cash cows is brought out very clearly in the Cabinet Note on the plan: “Any turnaround has to be based on the principle that the gap between the ARR and the ACS is eliminated as early as possible, liability to be taken over by the state/equity infusion by the state government, subsidy not to be funded by the banks but provided by the state government in full as per the Electricity Act...The scheme contains immediate/short-term measures to be taken by the state governments and the discoms in a time-bound manner. These measures include financial restructuring, tariff setting, revenue realisation, subsidy, metering, audit and accounts and monitoring.



discoms

Mer

ItS o

F THe

life

line

The benefit, of course, will depend on the manner and the structure in which the scheme is being implemented by the state governments adhering to the stricter norms put forth by the Centre. in short, if the entire criterion in the debt-restructur-ing document is followed, it is expected that the state discoms could turn around to a healthy fi-nancial situation within the next five years.

The formula also enables banks to lend more to power companies. According to the rating agency fitch, “in principle, the restructuring should allow the state discoms to upgrade their infrastructure, curtail inefficiencies and improve their operating performance and credit profile – particularly for the utilities of the seven states which accounts for bulk of the problem.” fitch, in the same note, con-tinued that “We expect the banks to benefit, too, because of their exposure at every level of power sector value chain.”

The sector experts are of the opinion that the repowering formula announced by the centre government is a very viable one. However, they all united in emphasizing the need for following the guideline specified in the document.

“This is a good frame-work to start with. This also makes the states realise that they are required to take responsibility. All the time, the Centre cannot act as a saviour,” said Gopi Krishna P, AVP, Project Advisory and Structured finance, SBi Capital. He continued that this emphasis the requisite for a regular tariff revision.


discoms



discoms

of power purchase in the total cost of supply has gone up from 39 per cent to 70 per cent in the same period.

ThE pLanCurrent debt restructuring envisages the state governments absorbing 50 per cent of the debt in the form of special securities issued in favour of the lenders and banks restructuring the other 50 per cent, backed by the state government’s guarantee. There is also a transitional financing mechanism funded by the centre linked to additional loss reduction.

The announced scheme, with the aim of improving the health

Phasing of special securities to be issued by the state government to Discoms (Rs crore)

Source : inter-ministerial note on debt restructuring

Tamil Nadu

884

2526

2880

328350 % STL

95732012 -13

2013 -14

2014 -15

2015 -16

2016 -17

Andra Pradesh

2211

94050 % STL

31512012 -13

2013 -14

2014 -15

2015 -16

2016 -17

Uttar Pradesh

1919

2245

2559

2918

332650 % STL

129672012 -13

2013 -14

2014 -15

2015 -16

2016 -17

2518

2496

284550 % STL

78592012 -13

2013 -14

2014 -15

2015 -16

2016 -17

Madhya Pradesh

72 51350 % STL

5852012 -13

2013 -14

2014 -15

2015 -16

2016 -17

Rajasthan

Haryana

2649

3496

3986

4544

518050 % STL

198552012 -13

2013 -14

2014 -15

2015 -16

2016 -17

Punjab

881

1004

1145

1305

144850 % STL

58232012 -13

2013 -14

2014 -15

2015 -16

2016 -17

The note goes on to warn that “Unless these measures are taken and the states assume full responsibility of running the utility on sound commercial principles any turnaround of the state utilities may not be possible.”

Factors that have led to such mammoth losses include gaps between the average cost and the average revenue per unit of electricity, followed by higher Aggregate Technical and Commercial (AT&C) losses. A Planning Commission report points out that the overall unit cost of supply has increased by 21 per cent between 2007-08 and 2011-12. While interest payments have risen by 65 per cent, power purchase has gone up by 21 per cent. The share of cost

Tamil nadu hike in April 2012

Kerala hike in July 2012

andhra pradesh hike in April 2012

Jharkhand hike in August 2012

himachal pradesh hike in April 2012

West Bengal hike in March 2012

madhya pradesh hike in March 2012

Uttarakhand hike in April 2012

chhattisgarh hike in April 2012maharashtra hike in August 2012haryana hike in March 2012

Rajasthan hike in August 2012Uttar pradesh hike in October 2012

Bihar hike in March 2012punjab hike in July 2012

Phasing of special securities to be issued by the state government to Discoms (Rs crore)

Source : inter-ministerial note on debt restructuring

Tamil Nadu

884

2526

2880

328350 % STL

95732012 -13

2013 -14

2014 -15

2015 -16

2016 -17

Andra Pradesh

2211

94050 % STL

31512012 -13

2013 -14

2014 -15

2015 -16

2016 -17

Uttar Pradesh

1919

2245

2559

2918

332650 % STL

129672012 -13

2013 -14

2014 -15

2015 -16

2016 -17

2518

2496

284550 % STL

78592012 -13

2013 -14

2014 -15

2015 -16

2016 -17

Madhya Pradesh

72 51350 % STL

5852012 -13

2013 -14

2014 -15

2015 -16

2016 -17

Rajasthan

Haryana

2649

3496

3986

4544

518050 % STL

198552012 -13

2013 -14

2014 -15

2015 -16

2016 -17

Punjab88

1

1004

1145

1305

144850 % STL

58232012 -13

2013 -14

2014 -15

2015 -16

2016 -17

phasing oF spEciaL sEcURiTiEs To BE issUEd By sTaTE govTs (Rs cRoRE)



discoms

All IndIA electrIcIty dIStrIbutIon utIlItIeS bAlAnce Sheet (In rS crore)

Particulars As at31-03-2010

As at31-03-2010

As at31-03-2005

As at31-03-2005

Sources of funds

1. Own funds:(including share capital, reserve & surplus)

58,502 25,024

2. loan funds:from: state governmentfrom: others

24,0791,60,662

15,19955,560

3. Current liabilities:(including creditors, deposits & provisions)

1,53,356 51,624

3,96,586 1,47,406

Application of funds

1. fixed assets:2. investments:3. Current assets & loans & advances:Cash & bank balancesStockSundry debtorsloans & advancesOther current assets

9,6226,948

55,8375,325

77,413

1,28,3506,164

1,55,146

5,1723,464

30,2091,448

20,166

66,8771,341

60,459

4. Miscellaneous expenditures:(including profit & loss account) 1,06,926 18,731

3,96,586 1,47,406

long-terM loAn IncludeS AMount In rS croreS

Rec 17,046

Pfc 4,639

lic 413

Consumer contribution 8,933

Govt. Grant 4,330

Apdrp/pmgy 372

State govt loans 8,900

long term loans 44,633

Own funds 33,400

Total 78,033

loAn FroM otherS yeAr

2005 2010 increased by

Banks 8,190 72,185 63,995

Public bonds 5,740 6,100 360

R.e.C. 13,390 30,436 17,046

P.f.C. 5,686 10,325 4,639

lic 2,203 2,616 413

Consumer contribution 8,479 17,412 8,933

Govt grants 3,370 7,700 4,330

Apdrp/pmgy 665 1,037 372

Other fls 3,855 12,839 8,984

Total 51,578 1,60,650 1,09,072

FInAncIng oF loSSeS AMount In croreS

financial losses (-) 82,000

(i) current assets - current liabilities) 94,700(-) 1,01,700 (+) 700

(ii) long term loans + own funds(-) Creation of fixed assets

78,000(-) 61,500 (+16,500)

Balance outstanding (-) 58,500

(iii) bank’s loan (+) 58,500

SourceS

increase in own funds 33,400

increase in loan from state govt 8,900

increase in loan (others) 1,05,000

increase in current liabilities 1,01,700

Total 2,49,000

uSeS

Creation of capital assets 61,500

investments 4,800

increase in current assets 94,700

losses including misc. expenses 88,000

Total 2,49,000

(AMount In rS crore)

increase in own funds 33,400

Major contribution by states

Uttar Pradesh 12,200 36%

Tamil nadu 3,500 11%

Maharashtra 3,200 10%

Madhya Pradesh 3,600 11%

Karnataka 1,700 5%

Andhra Pradesh 2,400 7%

Total 26,600 80%

increase in other current assets 57,000

Major contribution by states:

Uttar Pradesh 28,500 50%

Rajasthan 13,700 24%

Andhra Pradesh 9,800 17%

Haryana 4,700 8%

Total 56,700 99%

of the state discoms, has outlined the measures to be taken by the state, the state discoms and the central government. The thrust in the plan is to overcome the short-term liabilities of the state utilities in a planned way. Put simply, the scheme aims to make the discoms turnaround financially with the support of both the state and the central government in a very structured and phase manner.

Here’s what the debt-restructuring plan has to offer:a) Fifty per cent of the short-term liabilities (STL) of the discoms as

on 31 March, 2012, to be taken over by the state government. This liability will be converted to bonds backed by the state government guarantee. This will be in a phased manner over the next two to five years.

b) The balance 50 percent liability will be rescheduled by the

lenders with a moratorium of three years on the principal and interest fully secured by the state government.

c) The central government will be providing a grant equal to 25 per cent of the principal liability.The current restructuring plan is mainly for Andhra Pradesh,

Haryana, Madhya Pradesh, Punjab, Rajasthan, Tamil Nadu, and Uttar Pradesh. The states have been selected on the basis of outstanding debts owed by the discoms. Out of the entire liabilities of the state discoms these seven states alone account for Rs1.2 lakh crore.

WhaT WEnT WRongWhen the Electricity Act 2003 was introduced, it was with the intention of delinking generation, transmission and distribution. According to one of the study papers published by Crisil Research,



discoms

the basic aim of the act was more or less achieved in June, 2010, barring Bihar, Jharkhand, Kerala, and in those states where electric-ity supply has not been corporatised. In the past decade, though the government intended to delink electricity from vote bank politics, they achieved little.

With the introduction of independent electricity regulatory commissions at the state level and an appellate body at the centre, it was expected the sector would work in an independent way with less liabilities to the central government. But electricity remains a political issue. The last bailout was a much easier task as the dues were pending with the unbundled entity, said Gopi Krishna. “But now the losses are with the discoms.”

The underlying problem is the pricing of electricity. The problem would not have been magnified to this level had the states revised tariffs periodically. Some of the states in the selected seven states did not increase tariff for as long as seven years. Take, for instance, Rajasthan: its debt is as large as a state like Tamil Nadu. But the economy is not even half the siz eof of Tamil Nadu.

AT&c LossEsCountrywide AT&C losses stand close to 30 per cent which, accord-ing to experts and the regulators, is extremely high. In some of the states it is as high as 39 per cent. And if one goes regionwise, in the south it is 20 per cent and in the north it is 36 per cent. Globally, the accepted standard is below 10 per cent. For India, the comfort level of AT&C losses have pegged at anything below 15 per cent.

“Conceptually the debt restructuring plans for the discoms are much appreciated. It will reduce one of the main risks slowing down investments in the sector,” said Hemant Joshi, senior VP, cor-porate finance and treasury, CLP India. Other than the tariff issue, high AT&C losses continue to play a critical role in the deteriorating health of the discoms, he added.

The losses under the AT&C category are mainly due to the non-recovery of fees from the consumers at various segments. However, it is true that some of the states were success-ful in bringing down the AT&C losses. The notable difference has happened in the distribution area where privatisation has been put in place. The best example is the Bhiwandi area in Mumbai where the losses have been brought down drasti-cally after the franchise model of distribution was introduced in the area. Curtailing theft, better alignment of the transmission lines, and better grid, could drastically cut down the losses.

To bring down AT&C losses, the central government had introduced two schemes. For urban areas, there was the Restructured-Accelerated Power Development and Reform Programme (RAPDRP) with Power Finance Corporation Ltd as the nodal agency. (Under this category it covers 1,400 towns which

The consumers shouldn’t look at the negatives of tariff hike alone, but should accept the positives of getting electricity supply for longer hours.”Veerapa Moily, Union petroleum and natural gas minister

Estimated time for state discoms could turn around

after debt-restructuring

5years



discoms

account for more than 40 per cent of the energy consumed.) And, for rural electrification, there was the Rajiv Gandhi Gramin Vidhyutkaran Yogana (RGGVY) which was monitored by the Rural Electrification Corporation Ltd. But the success or failure of the abovementioned schemes are yet to be decided.

cURRENT siTUATioNThough the restructuring was announced in last September with a three-month deadline set as December 31, 2012, none of the seven states listed by the government was interested in opting for

the same. The said proposal involved Rs1.2 lakh crore for the seven states. The power ministry was forced to extend

the deadline by another three months, March 31, 2013, to implement this formula. The

scheme requires a cabinet approval from the respective states to roll

out. It is observed that the approval/ involvement of the state govern-

ments are indispensible as the scheme requires a certain

amount of financial commitment at the state level.

“State governments are taking a longer time to decide owing to the financial commitment

involved. The second reason could be the scale of short-term loans in the states. In majority of the cases, the short-term loans are much higher than the long-term loans of the discoms in the said seven states,” pointed out Gopi Krishna. However, sector experts are of the opinion that the states will eventually have to opt for the announced package as the government has already ruled out the 100 per cent bailout package for the discoms.

THE HURdLEsThough the country is reeling under severe power shortage, increase in tariff doesn’t go well with the political parties. As we are inching towards another election, it will be a tough task for the state governments to implement the package with the conditions put forth in the package. In the recent past, majority of the states have increased the tariffs. However, Gopi Krishna feels that the hike is not substantial enough to cover the losses in a big way. He said, “If the requirement of increase in tariff in a particular state is 20 per cent, we have seen only 10-12 per cent. This is not enough.”

According to Fitch, “The recent tariff hikes across states have done little to ease the woes of the debt-ridden distribution sector.” Though credit-rating agency believes that such tariff hikes are positive, the current hikes solve the problem only partially on two accounts. “Firstly, the tariff hikes have not been sufficient to cover the current revenue gap reported by discoms and, secondly, the hikes will not result in recovery of regulatory assets. The comfort would only come from slowing down of the pace of regulatory asset creation thus partly mitigating the stress on the liquidity profile,” Fitch said.

Over the past year, a number of state electricity regulators have allowed tariff hikes to the discoms. In some states, tariff hikes have been steep while in others it has been moderate to low. Most dis-coms had not revised tariffs for years and, hence, have taken steep tariff hikes in the past year. Of all the states, Tamil Nadu has seen the maximum hike at 37 per cent, while Kerala and Delhi have followed suit with 30 per cent and 26 per cent, respectively.

The message is clear to both the state governments and the consumers. Electricity, as a commodity like any other goods, comes at a price. As former power minister Veerapa Moily said, “The consumers shouldn’t look at the negatives of tariff hike alone, but should accept the positives of getting electricity sup-ply for longer hours.”

Estimated accumulated losses of state discoms as on

March 31, 2012

lakh crore2.46Rs

Factors that have led to mammoth losses for discoms

include gaps between the average cost and the average revenue per unit of electricity, followed by higher Aggregate

Technical and Commercial losses


DS_ADVT.indd 2 2/8/2013 2:28:33 PM


INTERVIEW

Srikanth Chandrasekaran, senior regional programme

manager, standards, IEEE-SA, on training

professionals in global standards development and

how it will bene�t the industry

Spreading

INTERVIEWED BY IMRAN MIRZA

Spreading


TRANSMISSION & DISTRIBUTION

With smart grid being a relatively new concept, there is growing need to educate the various stakehold-ers involved of the concept and the importance of standards. And one of the key people to have taken the lead in doing so is Srikanth Chandrasek-

aran, senior regional programme manager, standards, IEEE-SA for India. Chandrasekaran, who is responsible for increasing the involvement of India’s professional and technical community in global standards development, talks about IEEE-SA’s achievements and how the smart grid can help the country reach its goal for power for all. Excerpts from an interview:

According to you, the lack of power infrastructure is an advantage for India in the transition towards smart grids. Can you explain?Power infrastructure in India is primitive compared to some of the developed nations. However, this is also turning out to be an advantage for us. In the US, for example, the cost to upgrade exist-ing infrastructure will be humungous. On the contrary, in India, we don't have that problem. The US has advanced infrastructure already in place, which is quite expensive to replace. For us, we do not have the infrastructure to begin with, so we have to start every-thing fresh and new. Of course, we would need new investment, but we do not have to bear the cost of replacing equipment that’s not fully depreciated.

When will smart grid become a reality in India?If you look at the state of affairs in India, currently nearly 30 per cent of the population does not have access to power. We cannot cater to this 30 per cent simply by adding new capacity. So what we are looking at is renewable energy. There’s a standard called IEEE 1547, which dictates how the distributor of a micro grid connects to the electric power supply.

Once we have smart grid, it will be possible to recover some of the losses in T&D. This will help bridge the gap between demand and supply. We are emphasising a lot on solar in India. The govern-ment wants to increase solar power to 20 GW by 2022. It also has a vision of power for all by 2020. While we might not achieve it by that time, we are moving in the right direction and have all the ingredients to get there. Smart grids will help the government to meet this target by reducing the dependency on the main grid and conventional sources of energy.

How effective will the smart grid be in reducing T&D losses?In most developed countries, the losses are in single digits. Techno-logically advanced countries such as Singapore and Korea hardly have any losses. There are reasons beyond technology that result in power theft. One of the biggest challenges in India is that we are unable to differentiate between subsidy (free power) and theft.

We currently have T&D losses anywhere between 27 and 30 per cent. The target for the next Five-Year Plan is to bring down the losses to 15-17 percent, and in some areas, reduce it to less than 10 per cent. These savings will help cater to areas with power shortage through the smart grid.

It will also help utility companies become more profi table by monitoring and minimising power theft. With a smart grid, it would be possible to pinpoint the exact location of power theft and take necessary actions. It would also help prevent rigging of meters as it would be possible to easily check the power supplied, consumed and billed to the customers.

It’s not possible to completely eliminate theft, but we can defi-nitely bring it down to a very low level.

What are the key standards for smart grid?We have one key standard for Smart Grid called IEEE 2030, i.e. , the IEEE Guide for Smart Grid Interoperability of Energy Technology and Information Technology Operation with the Electric Power System (EPS), End-Use Applications and Loads.

IEEE 2030 establishes a globally relevant smart grid interoper-ability reference model and knowledge base that can be used by utilities who are developing their infrastructure roadmaps, by manufacturers who are planning smart grid systems and applica-tions, by scientists who are conducting research, by governments who are crafting regulations and by standards-development organisations (SDOs) who are writing additional standards for the smart grid.

It is the fi rst standard where we had three technical societies — Communication, Information Technology (IT) and Power & Energy — participate in the standard development activity.

What is IEEE is doing in India?In India, we have started 14 different pilot projects for smart grid testing and implementation. This is driven through India Smart Grid Forum (ISGF). One of the key elements of almost all the proposals

In the past, standards were developed, then we adopted the standards and then we modified them

to suit Indian needs. Now we are encouraging people to participate, even before the standards are formed, so that when the standards come out, they cater to Indian requirements as well"


INTERVIEW

dard; we want to capture the requirements from India as well. In the past, standards were developed, then we adopted the standards and then we modified them to suit Indian needs. Now we are trying to encouraging people to participate, even before the standards are formed, so that when the stan-dards come out, they cater to Indian requirements as well.

Which parameters are usually different in India? The voltage system is different from the rest of the world. The power quality is different in India. The power frequency and parameters are also different. These are some of the things that we have to work on.

One of the things that most foreign companies have noticed in the recent past is that when they use or install any equipment in India, it almost always fails or malfunctions because it’s not designed or certified for Indian condi-tions. These are the types of problems that we are trying to address.

As the country is trying to focus on cutting down T&D losses, smart meters are now in focus. But with smart metering, one of the challenges is the huge costs involved in replacing the current meters. We want to ensure that standards are adhered to and along with that some of the indigenous materials and capabilities are included to keep the costs low, otherwise people will never switch to smart metering.

ENABLING CONSUMER CONNECTIVITY

Most foreign companies have noticed that when they use or install any equipment in India,

it almost always fails or malfunctions because it’s not designed or certified for Indian conditions. These are the problems that we are trying to address."

is smart metering. IEEE is an associate member of the ISGF. We are trying to promote standards for the community. We do a monthly webinar with experts of standards to provide details of the particular standards to the Indian audience. There are some standards that have already been published while some are being worked upon. What we want the Indian engineers to do is to join the working group and actually develop the standards along with the global community.

Indian parameters are vastly different from the rest of the world, especially when it comes to power and energy. We want to ensure that when we are creating a truly global stan-


TRANSMISSION & DISTRIBUTION

IEEE-SA PILOT PROJECTS WITH FOCUS AREAS

Location: Panipat City Subdivision, HaryanaBenefits:

distributionlosses

Location:

of KeralaBenefits:

due to manual error, tampers,

Savings on employee and travel

Location:

Benefits:

losses

Location: Additional City Area Division, Mysore, KarnatakaBenefits:

lossesShifting of load in

hours

Location: Industrialtown of KalaAmb,

Benefits:Shifting peak load

Location: Siltara – Urla

ChhattisgarhBenefits:

shifting of peak-load demand to a non-peak time thereby saving

Location: Baramati

Benefits:

requirement of

unforeseen outagesImprovement in reliability parameters like

Location: Industrial

Amritsar, PunjabBenefits:

outage restoration time

transformer outage restoration time

Location: West BengalBenefits:

AMI and peak load management with

Location: VKIA Jaipur,

Benefits:

Location:Benefits:

losses

billing

Location:is an industrial and residential area and Deesa of Palanpur

Benefits:

Location: Jeedimetla Industrial Area, Andhra PradeshBenefits:

Location: Guwahati distribution region, AssamBenefits:

available energy during peak time

through Power Quality

to deferred Capital Investment in sub-transmission networks

Improved management of power

UHBVN,Haryana

CESC,Karnataka

KSEB,Kerala

HPSEB, Himachal Pradesh

TSECL,Tripura

ElectricityDepartment,Government

of Puducherry (PED)

UGVCL,Gujarat

AP CPDCL, Andhra Pradesh

APDCL,Assam

MSEDCL,Maharashtra

CSPDCL,Chhattisgarh

PSPCL,Punjab

WBSEDCL,West Bengal

VKIA Jaipur,

JVVNL,Rajasthan


Focus

Is LED technology the key to sustainable lighting?

sustainability has been a trend in the market for a long time, and LED technology is often touted as the future of eco-efficient lighting. Yet has LED technol-ogy truly revolutionised the industry?

“The world is going through a steep change which is driven by a significant shift in technology, from incandescent fluorescent lighting to LED lighting,” says Maryrose Sylvester, president and chief executive officer, General Electric (GE) Light-ing. “This is really opening up a new world of possibilities in lighting which is one of the big technology shifts.”

Sylvester believes that the rise of LED technology has revolu-tionised lighting. “Businesses and customers around the world are more concerned than ever about energy efficiency as well as sustainability,” she adds.

Scott Coombes, principal, AESG, agrees that lighting technol-ogy is indeed “shifting from the use of incandescent fluorescent technology to LED technology.”

Coombes continues: “Efficient lighting is needed for sustain-able architecture. In 2009, a typical 13-watt LED lamp emitted 450 to 650 lumens, which is equivalent to a standard 40-watt incandescent bulb.


42-45-ET_Feb13_LED technology.indd 42 08-02-2013 17:38:12


EnErgy EfficiEncy

Is LED technology the key to sustainable lighting?

“In 2011, LEDs have become more efficient, so that a 6-watt LED can easily achieve the same results. A standard 40-watt incandescent bulb has an expected lifespan of 1,000 hours, whereas an LED can operate with reduced efficiency for more than 50,000 hours, 50 times longer than the incandescent bulb,” he continues.

Coombes adds that LED lighting is sustainable as it uses less energy than most other types of lamps, has a longer lifespan, which causes less frequent replacement and reduces the amount of waste. In addition it is mercury-free and can be housed in special luminaries designed for easier disassembling and recycling.

Another benefit is the ability to be dimmed, which opens up tremen-dous opportunities for additional energy savings through the use of controls and motion sensors.

Globally, the fear of increasing carbon footprint has pushed the case in the favour of LED lighting. Reports point out that LED lighting uptake has risen sharply in 2012 and is expected to reach 25 per cent by 2014. According to Digitimes Research report, a leading high-tech media outlet, growing concerns about energy and emissions are driving a revolution in the lighting sector.

Sylvester adds that, with the advancement in LED usage, companies have to take more responsibility with their decision making.


42-45-ET_Feb13_LED technology.indd 43 08-02-2013 17:38:38


FOCUS

“Companies now need to make more complicated decisions as old technologies are going away and new ones are coming into place,” she states.

For Coombes, LED technology has infi nite possibilities. “The uses of LED lighting are limitless,” he says. “LED lights can be used for entertainment and architectural lighting and also as part of a sophisticated and state-of-the-art interior design.”

Despite all the benefi ts and advantages of LEDs, Coombes SAYS that there are, however, some concerns with the overall technology. He adds: “Some of the issues raised may be colour balance, water damage and UV sensitivity.

“LEDs can shift colour due to age and temperature. Two dif-ferent white LEDs will have two different colour characteristics which can affect how the light is perceived.”

Moving on to concerns in hotter climes like the Middle East, it is hard to tell whether the region East has embraced this revolution of LED technology. “The region is rich in oil, but then again, this is why new technologies need to be adopted in order to actually save on the carbon footprint generated here and also make sure that you have an effi cient lighting system,” states George Bou Mitri, general manager - Middle East, Africa & Turkey, GE Lighting.

He describes the Middle East as a “multi-speed region” but con-cludes that the lighting organisation in the region is growing.

Coombes adds: “Most of the countries in the GCC have started to reduce their carbon footprint. Hence they started

encouraging the sustainability regulations and energy effi-ciency equipments to reduce electricity consumption.”

He continues: “As part of that, some of the Middle East coun-tries have announced their Green Building regulations and some of them have made it mandatory to achieve this. Green rating systems are also encouraged in many countries.”

Coombes states, however, that there are “no government regulations being made to drive LED lighting, but they do have regulations to meet the mandatory energy reduction by performing whole building energy simulation. This will incor-porate lighting as well. In some of the government regulations, they recommend to use LED lighting.”

He adds: “Most of the sustainability consultants prefer to pro-pose LED lighting for budgetary projects which reduce lighting demand from the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) requirements.”

Coombes also brings up the extreme heat and humidity in the Middle East and how this may affect the employment of LED technology in the region.

“Generally, the Middle East climate is determined as a very hot and humid place. LED performance is temperature depen-dent. LEDs used outdoors, such as outdoor signaling or in-pavement signal lights, in maintenance zones that are utilised in hot climates, could result in low signal intensities or even failure. It is recommended not to be used in caution zones to avoid accidents,” he says.

Penetration rate set by

Japan to achieve LED

lighting by 2015

50%


ENERGY EFFICIENCY

Not everybody is at the same speed. Some have actually taken

steps such as projects and proof points, wanting to learn about the technology better while others have been completely convinced.”

Businesses and customers around the world are more concerned than ever about energy efficiency as well as sustainability.”

The uses of LED lighting are limitless. LED lights can be used

for entertainment and architectural lighting and also as part of a sophisticated and state-of-the-art interior design.”

SCOTT COOMBESPrincipal, AESG

MARYROSE SYLVESTER.President and CEO, General Electric Lighting

GEORGE BOU MITRIGM, Middle East, Africa & Turkey, GE Lighting

When asked the same question, Bou Mitri compares the climate in the Middle East to Las Vegas, where GE has recently installed an entire LED roadway.

According to Bou Mitri and Sylvester, GE installed 40,000 of its newest ERS outdoor fi xtures, removing 1,200 metric tonnes of carbon dioxide by replacing these HID lights with LED systems.

Sylvester informs that 2,300 cars were taken off the road annually. The 20 million KW hour reduction and energy usage has saved the city $1.7 million, in addition to the maintenance and energy savings.

Therefore, in terms of the climate in the Middle East, Bou Mitri says: “We look at some of the products like ERS outdoor fi xtures and think of the heat level here. That’s where we’re customis-ing but we have very well positioned products that work in the region so we’re taking all these specifi cs into account. To make sure that the products we use are compatible with the region, we consider the temperature risings, the heat level as well as the operating rhythm and maintenance rhythm that is used.”

Whether this is the reason for the slow movement towards LEDs in the Middle East is an uncertainty. Bou Mitri states: “Not everybody is at the same speed. Some have actually taken steps such as projects and proof points, wanting to learn about the technology better while others have been completely convinced.

“It is defi nitely becoming more and more accepted,” he concludes.


markET daTa

Power prices jumped in the new year as January 2013 recorded a high of Rs5 a unit on falling generation and rising industrial demand. PLFS remained up, despite the coal and gas shortages. Targets on transmission lines and substations remained way behind

Prices jumP

Power

Generation

PricE jumPs as GEnEraTion falls

Power prices fell below Rs2.60 on Republic Day and rose to Rs5 a unit on 12 January, 2013, on IEX on account of generation shortfalls. Typically, prices stayed above Rs3.5 a unit in the first half and fell lower in the second half on account of falling demand. Volumes stayed true to seasonal trends.

nE bEaTs ThE sTrEETDuring December 2012, generation fell short of target by around 3 per cent on account of various factors, mainly the continuing gas and coal shortages. Only the North Eastern region beat the street, delivering 107 per cent of traget. Plant Load Factors (PLFs) remained high. PLFs stood at 72.41 per cent for thermal, beating the target marginally, in December 12. Nuclear, however, fell below target and managed only 74.43 against a target of 78.23 per cent.

sectorwise generation for DeceMber 2012

summArY - reGiONWise

GeNerATiON (GWH)

Dec. 2012 APriL-Dec. 2012

PrOGrAmmes AcTuAL AcTuAL

nortHern region 21,662.00 21,438.68 201,761.69

western region 27,127.00 26,127.61 224,084.49

SOuTHerN reGION 17,313.00 16,381.78 140,491.40

eaSTerN reGION 12,981.00 12,456.27 106,596.76

nortH eastern region 582.00 624.36 6,747.77

aLL-inDia region

THermAL 68,767.00 67,814.44 562,391.38

NucLeAr 3,306.00 2,647.01 24,664.41

HYDrO 7,592.00 6,567.25 92,626.32

BHuTAN imP 239.00 88.65 4,662.43

TOTaL 79,904.00 77,117.35 684,344.54

PLant LoaD factor

summArY - reGiONWise

PLANT LOAD FAcTOr (per cent)

Dec. 2012 APriL- Dec. 2012

PrOGrAmmes AcTuAL AcTuAL sAme mONTH

2011 - 12

PrOGrAmmes AcTuAL AcTuAL sAme PeriOD 2011

- 12

THermAL 70.53 72.41 76.15 69.51 69.33 71.94

NucLeAr 78.23 74.43 73.89 76.74 78.18 75.48

Source: CEA

2000

2600

3200

3800

4400

5000UN MCP

Prices IEX INR / MWhDaily prices are simple average of non-zero prices in (24*4)

no of 15 minutes time block of respective day.

0

20,000

40,000

60,000

80,000

1,00,000Buy

01 Ja

n 13

02 Ja

n 13

03 Ja

n 13

04 Ja

n 13

05 Ja

n 13

06 Ja

n 13

07 Ja

n 13

08 Ja

n 13

09 Ja

n 13

10 Ja

n 13

11 Ja

n 13

12 Ja

n 13

13 Ja

n 13

14 Ja

n 13

15 Ja

n 13

16 Ja

n 13

17 Ja

n 13

18 Ja

n 13

19 Ja

n 13

20 Ja

n 13

21 Ja

n 13

22 Ja

n 13

23 Ja

n 13

24 Ja

n 13

25 Ja

n 13

26 Ja

n 13

27 Ja

n 13

28 Ja

n 13

29 Ja

n 13

30 Ja

n 13

31 Ja

n 13

46-49_ET_Feb2013_Market Data.indd 46 08-02-2013 17:39:45

Our footprint in India

MARKET DATA J&K | RESEARCH HOLIDAY IQ | EVENT THE HIFI CONFERENCE | GM’S DIARY RANGANATHAN BUDUMOORU


Registered with Registrar of Newspapers under RNI No. MAHENG/2009/34648, Postal Registration No. MH/MR/N/98/MBI/12-14Published on 7th of every month., Posted at Patrika Channel Sorting Office, Mumbai-400001, Posting date: 8th & 9th of every month

Volume 5|Issue 2|February 2013|`50

Total number of pages 84

JOSE DOMINIC REDEFINES THE PARAMETERS OF LUXURY AT CGH EARTHSOUTHERN COMFORT

PEOPLELAUCALA ISLAND’S KURT WACHTVEITL

TECHNOLOGYSOUND SYSTEMS

DESIGNAMBIENT LIGHTING FOR DIFFERENT AREAS

SPOTLIGHT10 THINGS YOU DIDN’T KNOW ABOUT

THE LEELA PALACE UDAIPUR

THE CONCEPTOF PROCUREMENT

CONSULTANTCY

NEW FORMATS IN DINING

EXPERIENCE

01_HI_Feb13_Coverfinal.indd 1 01-02-2013 20:19:00

Embracing modern thinkingAn ITP Publishing India publication

HEART HEART

BRIG. JOE CURIAN ONTHE SEVENHILLS CONTROVERSY

Total number of pages 52Registered with Registrar of Newspapers under RNI No. MAHENG/2012/46040, Postal Registration No. MH/MR/N/242/MBI/12-14, Published on 27th of every previous month. Posted at Patrika Channel Sorting Office, Mumbai-400001, Posting date: 30th & 31st of every previous month

REPORTIRIA 2013:CAPTURED

ON CAMERA

BALANCE SCORE CARD IN A HEALTHCARE

SETTING

ILEAL TRANSPOSITION WITH SLEEVE

GASTRECTOMY

TROUBLESHOOTERSIN SMALL HOSPITALS

FOCUS

ABMH’S EXCITING JOURNEY TO JCI ACCREDITATION

CASE STUDY

HEART HEARTHEART DR MUKESH HARIAWALA

SPEAKS OUT ON HIS PIONEERING TRIPLE

HEART THERAPY

FEBRUARY 2013 | VOLUME 2 | ISSUE 2 |`50RIGHT FROM THE HEART OF THE INDUSTRY

An ITP Publishing India publication

Retail TodayTotal number of pages 54

ERFECTICTURE

MILAN SAINI, COUNTRY HEAD AND MD, CINEPOLIS

Debate

What it takes to design retail outlets

PERSPECTIVEAiming for an inclusive workforce

INNOVATIONShop powered by solar energy

Peeking into stores of the future

Online business:a bubble waitingto burst?

TRENDS

INDIA, IS READY TO REEL IN BIG BUSINESS


Total number of pages 52Volume 1 | Issue 1 | January 2013 | `50

ETELECTRICALS TODAYMORE POWER TO THE INDUSTRY

ARE ENERGY-EFFICIENTPRODUCTS REALLYEFFICIENT?

SMART GRID IS NOLONGER A CONCEPT,IT’S A NECESSITY

Even though Jyotiraditya Scindia

describes his current charge as

‘daunting’, the young power

minister is ready to take on the

challenge. But can he deliver?

ARUN MAIRA,MEMBER, PLANNING

COMMISSION, ON WHAT AILSTHE INDUSTRY

VIEWPOINT

IN ASSOCIATION WITH

AN ITP PUBLISHING INDIA PUBLICATION

Registered with Registrar of Newspapers under RNI No. MAHENG/2008/33387, Postal Registration No. . MH/MR/N/146/MBI/13-15Published on 30th of every previous month. Posted at Patrika Channel Sorting Office, Mumbai-400001, Posting date: 3rd & 4th of every month


WWW.CONSTRUCTIONWEEKONLINE.IN

`

FOR GROWTHGEARED

AN ITP PUBLISHING INDIA PUBLICATION

ROADS & HIGHWAYS

HVAC SPECIALINDIA GETS READY

FOR HCFC PHASE OUT

POLICYDHANENDRA KUMAR ON

SPEEDY PROJECT APPROVALS

PMV FOCUSTALLER & SAFER TOWER CRANES

MARKETING SOCIAL MEDIA TIPSFOR REALTORS

VIBRANT GUJARAT HOUSING SECTOR

STEALS THE SHOWSUSTAINABLE PAVING TECHNOLOGIES


ManufacturingYOUR DECISIVE TOOL

FOR MANUFACTURING EXCELLENCE

Total number of pages 68Registered with Registrar of Newspapers under RNI No. MAHENG/2011/37959, Postal Registration No. MH/MR/N/154/MBI/2013, Published on 5th of every month. Posted at Patrika Channel Sorting Office, Mumbai-400001, Posting date: 7th & 8th of every month

WHY IT MAKES SENSE EVEN IN SLOWDOWN

MAHARASHTRA’S NEW INDUSTRIAL POLICY

SETTING NEW GROWTH RECORDS

ROLE OF R&D

FRESH START

STEEL SECTOR

AEROSPACE UPDATES

PLUS

Volume 3 | Issue 1

February 2013 | `50

IMTEX 2013 REVIEW

AnniversarySpecial2nd

TEN ON TEN!JORG GROSSMANN IS DEFYING RECESSIONARY TRENDS TO EXPAND

FREUDENBERG GROUP’S BUSINESSES ACROSS TEN SECTORS IN INDIA


YES, HE

CAN!

An ITP Publishing India Publication Vol. 5 | Issue 2 | February 2013 | ̀ 50

Registered with Registrar of Newspapers under RNI No. MAHENG/2009/33418, Postal Registration No. MH/MR/N/99/MBI/12-14, Published on 3rd of every month. Posted at Patrika Channel Sorting Office, Mumbai-400001, Posting date: 5th & 6th of every month

FOCUS

HEADS UP

ON 4K

SOUND GRASPBEFORE YOU CUT A 5.1 MIX

ANTE UP

EDITING SUITES

THRILLS IN STILLS

SHEMAROO’S HIREN GADA TURNS HIS HUGE REPOSITORY OF FILM REELS INTO A MONEY-SPINNING PLATFORM

BESEXPO2013WRAP UP



Ideas, inspiration and insight for architects and interior designers Volume 4 | Issue 11 | February 2013 | `50

VENEERS &

OF DESIGNERS

URBAN LEGENDURBAN LEGENDURBAN LEGENDAT 84, FUMIHIKO MAKI IS STILL A KEY PLAYER IN THE WORLD OF ARCHITECTURE

SPOTLIGHTFACADESCASE STUDYKNS ARCHITECTS

For subscriptions, please contact: James Dsouza

Tel: 022-61546032Email:[email protected]


markET daTa

Peak demand & SupplyPEak dEmand rEmainS unmET by ovEr 9%

All-India peak demand was at 1281689 MW while peak met was at 116394 MW, a deficit of 9.6 per cent. Maximum deficit was in the southern region of around 17 per cent, higher than the year-to-date figure of 15.3 per cent, followed by the northern region which saw a deficit of 8.2 per cent, down from the year-to-date level of 8.2 per cent.

Peak DemanD anD Peak met (Provisional)

Figures in MU net

State December, 2012 April,2012 to December, 2012

System Peak Demand Peak Met Surplus / Deficit (-) Peak Demand Peak Met Surplus / Deficit (-)

Region ( MW ) ( MW ) ( MW ) ( % ) ( MW ) ( MW ) ( MW ) ( % )

Chandigarh 216 216 0 0.0 340 340 0 0.0

Delhi 3,746 3,643 -103 -2.7 5,942 5,642 -300 -5.0

Haryana 6,738 5,574 -1,164 -17.3 7,432 6,725 -707 -9.5

Himachal Pradesh 1,453 1,360 -93 -6.4 2,116 1,672 -444 -21.0

Jammu & Kashmir 1,937 1,837 -100 -5.2 2,346 1,837 -509 -21.7

Punjab 5,336 5,336 0 0.0 11,520 8,751 -2,769 -24.0

Rajasthan 8,511 8,255 -256 -3.0 8,511 8,255 -256 -3.0

Uttar Pradesh 10,720 9,242 -1,478 -13.8 13,940 12,048 -1,892 -13.6

Uttarakhand 1,742 1,487 -255 -14.6 1,757 1,646 -111 -6.3

northern region 37,831 34,744 -3,087 -8.2 45,860 41,790 -4,070 -8.9

Chhattisgarh 2,825 2,610 -215 -7.6 3,271 3,134 -137 -4.2

Gujarat 11,002 10,922 -80 -0.7 11,999 11,960 -39 -0.3

Madhya Pradesh 9,913 8,621 -1,292 -13.0 10,077 9,462 -615 -6.1

Maharashtra 17,129 16,407 -722 -4.2 17,934 16,765 -1,169 -6.5

Daman & Diu 292 267 -25 -8.6 311 286 -25 -8.0

Dadra & Nagar Haveli 625 625 0 0.0 629 629 0 0.0

Goa 480 434 -46 -9.6 480 452 -28 -5.8

Western region 39,476 37,247 -2,229 -5.6 40,075 39,486 -589 -1.5

Andhra Pradesh 12,559 10,551 -2,008 -16.0 13,974 11,335 -2,639 -18.9

Karnataka 9,087 7,959 -1,128 -12.4 10,124 8,264 -1,860 -18.4

Kerala 3,319 2,999 -320 -9.6 3,578 3,262 -316 -8.8

Tamil Nadu 12,410 9,409 -3,001 -24.2 12,606 11,053 -1,553 -12.3

Puducherry 300 299 -1 -0.3 348 320 -28 -8.0

Lakshadweep # 8 8 0 0 8 8 0 0

southern region 35,132 29,012 -6,120 -17.4 36,934 31,287 -5,647 -15.3

Bihar 2,124 1,625 -499 -23.5 2,298 1,784 -511 -22.3

DVC 2,466 2,349 -117 -4.7 2,573 2,469 -104 -4.0

Jharkhand 1,119 976 -143 -12.8 1,119 1,033 -86 -7.7

Odisha 3,236 3,210 -26 -0.8 3,968 3,694 -274 -6.9

West Bengal 6,422 6,381 -41 -0.6 7,322 7,249 -73 -1.0

Sikkim 80 80 0 0.0 95 95 0 0.0

Andaman- Nicobar # 40 32 -8 -20 48 48 0 0

eastern region 14,302 13,538 -764 -5.3 16,655 15,415 -1,240 -7.4

Arunachal Pradesh 110 109 -1 -0.9 116 114 -2 -1.7

Assam 1,147 1,148 1 0.1 1,197 1,148 -49 -4.1

Manipur 122 120 -2 -1.6 122 120 -2 -1.6

Meghalaya 306 301 -5 -1.6 306 301 -5 -1.6

Mizoram 75 73 -2 -2.7 75 73 -2 -2.7

Nagaland 109 105 -4 -3.7 110 109 -1 -0.9

Tripura 213 205 -8 -3.8 229 228 -1 -0.4

north-eastern region 1,948 1,853 -95 -4.9 1,998 1,864 -134 -6.7

all india 1281689 116,394 -12,295 -9.6 135,453 123,294 -12,159 -9.0



markET daTa

Substations

lagging bEhind

In the substations seg-ment, a total capacity of 1,755MVA was commis-sioned against a target of 3,290 MVA. In the 400 kV segment, the states man-aged 315 MVA while the CTU managed 200 MVA. In the 220 MVA category, the states managed 780 MVA while the CTU pitched in with 460 MVA, adding up to 1,240 MVA.

ckt km of transmission lines have been added till date in FY13

10,799

sUB-stations (ProGramme & aCHievement) DeCemBer 2012

(Fig. in MVA)

VOLTAGE PROGRAMME Dec. 2012 April-Dec. 2012

LEVEL/SECTOR 2012-13 PROGRAMME ACHIEVEMENT PROGRAMME ACHIEVEMENT

+/- 500 kV HVDC

Central Sector 0 0 0 0 0

State Sector 0 0 0 0 0

total 0 0 0 0 0

765 kV

Central Sector 8,500 0 0 3,000 20,000

State Sector 1,000 0 0 0 0

total 9,500 0 0 3,000 20,000

400 kV

Central Sector 2,330 0 200 1,315 4,920

State Sector 6,040 1,260 315 5,205 4,805

JV/Private Sector 0 0 0 0 0

total 8,370 1,260 515 6,520 9,725

220 kV


State Sector 13,419 2030 780 11,120 11,495


total 13,799 2,030 1,240 11,500 12,185

Grand total 31,669 3,290 1,755 21,020 43,160

linesSTaTES managE only 78 ckT kmS of 200 kv linESTransmission line-laying continues behind target, with year-to-date achievement at 10,799 ckt kms against a target of 15,032 ckt kms. Of this, much of the work has been done in the 200 and 400 kV seg-ments with the states achieving a mere 78 Ckt kms during the month in the 200 kV segment. The year to date achievement lags behind too by around 15,00 ckt kms. The central sector clocked 1,175 ckt kms against a target of 1,315 ckt kms during the month in the 400 kV segment.

transmission lines (ProGramme & aCHievement) DeCemBer 2012

(Fig. in ckt kms)

VOLTAGE PROGRAMME April-Dec. 2012

LEVEL /SECTOR 2012-13 PROGRAMME ACHIEVEMENT PROGRAMME ACHIEVEMENT

+/- 800 kV HVDC



total 0 0 0 0 0

+/- 500 kV HVDC



total 0 0 0 0 0

765 kV

Central Sector 1,913 243 241 1,052 1,209


total 1,913 243 241 1,052 1,209

400 Kv

Central Sector 4,977 1,315 1,175 3,498 3,285

State Sector 3,641 1,070 463 3,745 1,249

JV/Private Sector 1,398 0 0 1,398 1,831

total 10,016 2,385 1,638 8,641 6,365

220kV


State Sector 5,054 976 78 4,933 2,977


total 5,497 976 78 5,339 3,225

Grand total 17,426 3,604 1,957 15,032 10,799



10 THINGS ABOUT...

Grid-tied system is synchronised with existing systems, based on frequency and voltage with solar getting priority

It is tied up for a lifetime. Once installed, it lasts for at least

The system is designed based on the connected load, area available and south side open for the Northern hemisphere

System configuration will be in the Detailed Project Report, based on the requirement and site conditions

You get to save money too. Accelerated depreciation benefit – 80 per cent in the first year and 10 per cent in the second year, as per the Income Tax Act

MNRE offers a subsidy on equipment costs. Channel partners appointed by MNRE ensure that the subsidy is received by the retailers is

Minimum lead time is case specific, but the subsidy recovery from completion of project will be

The only permission needed is from the Ministry of New and Renewable Energy (MNRE)

Solar grid-tied systems

on the connected load, area available and south side open for the Northern hemisphere

Plenty of benefits of using a solar grid-tied system, as long as it’s a sunny day! If you are wondering how much it will cut down on the electricity bill: it can certainly help drop the bill by as much as a 50 per cent depending on usage and the vagaries of weather. But it will not drop down to zero because most utilities will charge a minimum payment for staying connected to the grid.

BY SACHIN RELE

The author is MD & CEO, Autonic Energy Systems

Return on investment depends on local electricity tariffs and load shedding. For a city like Mumbai, typical ROI is about three and a half to four years

Typically, one can generate 1 KWH power from just

110-120sq. ft space

25years

months3

30%

DS_ADVT.indd 2 1/29/2013 6:05:51 PM

DS_ADVT.indd 2 2/8/2013 2:33:06 PM

Documents

Electricals Today February 2013 Issue