CoverStory

Domestic Power Sector Scenario The government has pulled out all the stops to
attract investment in the electrical sector and has
As India is emerging as an important global
supplier of goods and services, uninterrupted and taken various steps to make the sector attractive
quality power supply gains immense significance. for investors. The Electricity Bill 2003 has provided
Likewise, the availability of good quality and reliable impetus to the power sector. It has also catalyzed the
electric equipment is imperative. much needed reform in the Electricity Boards(EBs)
At present, India has an installed generating with many of them turning profitable after unbundling
capacity of over 150,000 MW, however the peak into independent entities like gencos, transcos,
demand gap is at about 15%. Capacity addition of discoms and managed as Strategic Business Units.
about 85,000 MW is required to meet the objective Central Electricity Regulatory Commission (CERC)
of ‘Electricity For All’ by 2012. This also necessitates and State Electricity Regulatory Commissions
enhancement of the transmission and distribution (SERC)too are playing an important role in regulating
(T&D) infrastructure to evacuate additional power
the sector. Public Private Partnerships (PPP) are on
across the country.
the increase in the generation segment. EBs are
Infrastructure is another important thrust area, opting for more and more turnkey solutions.
targeted in the Eleventh Five Year Plan. Massive
investments from the private and public sector The Government had also initiated the Accelerated
are expected to drive the growth in infrastructure Power Development and Reform Programme (APDRP
segment. This includes modernization of crucial 1-2) in order to minimize aggregate technical and
economic and social infrastructure, such as new commercial (AT&C) losses at the distribution level,
hospitals, commercial complexes, railways, roadways with the objective of improving the financial health
and schools. All this requires huge investments. of state electricity boards (SEBs).

24 May 2009
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Switchgear & Controlgear - Industry status 2008-09 Slowdown in demand is primarily noticed in the
last two quarters, which could be due to higher
The size of the Indian switchgear industry, not
interest rates, lower availability of capital and lack of
including domestic switches, in 2007-08 was about orders across almost all ranges of switchgear. APDRP-
6500 Crores. The Indian switchgear industry has 2 programme, Rural Electrification programmes
shown an overall growth in volume ( estimated) by like RGGVY etc, although gathering steam, are not
2.5% in the fiscal 2008-09 in comparison to 2007-08. generating adequate demand which could be due to
insufficient planning and delay in finalizing tenders.
Equipment prices are under pressure due to the
sharp decline in raw material prices. Another factor
contributing to pressure on prices is fierce competition
between the suppliers, creating growth opportunities
for suppliers having wide product range and who are
capable of reducing their costs and prices faster or
provide better and more value added solution.
The Primary demand drivers for power equipment
include:
l The GOI driven augmentation in Generation,
Transmission and Distribution under the Eleventh
and Twelfth Plan periods
l R-APDRP and RGGVY programmes
l Up gradation and Enhancement of Power plants
and T & D networks.
l Expansion of Infrastructure sector, both Public
and Private
l Realty sector
l Alternative/Renewable power sector etc.
l Exports
The switchgear and controlgear industry can
be broadly categorized under as LV, MV and HV.
Recent additions like EHV and UHV have also gained
importance due to increasing 765KV and 800KV
HVDC lines. 1200KV transmission systems are also
likely to be in place in near future.

Export Value in Rs Crore

2005-06 2006-07 2007-08 2008-09 (up to Feb)
HT Switchgears 295.9 405.6 394.5 378.9
LT Switchgears 791.5 1024.4 1416.5 1312.5
Custom built products 169.3 403.9 671.0 903.4
Total 6325.9 10996.2 13882.1 16096.7
Import Value in Rs Crore
2005-06 2006-07 2007-08 2008-09 (up to Feb)
HT Switchgears 211.3 229.7 197.0 431.9
LT Switchgears 1310.9 1856.4 1857.1 2540.0
Custom built products 401.5 578.2 792.7 1009.2
Total 10539.6 13245.1 15002.4 18048.3

Source: Select ports data

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other switchgear segments; High Voltage Switchgear

Per capita consumption of energy being has posted a growth of about 5%. The demand is
relatively low, the growth potential for slated to continue with the spending on HV-EHV
this industry in medium and long term Transmission systems on the increase.
is high.
The Switchgear Industry - Strengths
The Indian electrical equipment industry comprising
Low Voltage
of multinationals, large, medium and small players is
The LV switchgear industry has posted a growth quite capable of producing, supplying and exporting
of -Ve 7%, as compared to the previous fiscal. This a wide variety of electrical equipment including switch
is due to slow down in major users like realty and gear and control gear items needed by the expanding
industrial sectors. In the residential construction industrial and power sector.
sector, the market slowed down in 2008 with
l India’s Switchgear industry is fully developed and
year-on-year unit growth decreasing to 10.8 percent
mature.
as compared to 24.0 percent in 2007.
l This industry sector manufactures the entire voltage
The slowdown was primarily because of increased range from 240 V to 800 KV. The technology level
interest rates which made home loans more costly. is Contemporary.
Nevertheless, the market is expected to continue l The major technological factors in the market are
growing above 10.0 percent during the forecast period, safety, maximization of efficiency and reliability.
especially with the recent reforms to curb inflation. l Quality of the switchgear gives a market edge for
Continued growth of the residential sector is likely to most of the suppliers. Dedicated commitment to
drive the MCBs, ELCBs and MCCBs market. the overall quality of the switchgear, prompt after
Intense competition has however pushed prices sales service and support has been determined
down in the last two quarters. High level of competition as a mandatory strategy for success.
in the LV switchgear market is expected, as major l The industry has tried to reduce the adverse
market participants focus on maintaining their current impact of internal factors by cost cutting,
market shares. This will be made difficult with the improving productivity and keeping up to date in
emergence of low-cost domestic players who market new technologies.
products of similar quality. l The industry is competitive in the field of design
and engineering, as the skill sets available in the
An increase in process automation levels is country are relatively less expensive.
expected to support push-buttons, contactors and
l Per capita consumption of energy being relatively
switching relays, as well as the protection relays
low, the growth potential for this industry in
market, which finds application extensively for medium and long term is high.
motor control.
l The ‘Made in India’ brand is gaining more
currency/trust in the global markets.
Medium Voltage
Medium voltage switchgear industry seems to New Developments/Trends in the
have stagnated at about 4% growth as compared to Switchgear Industry
last fiscal. The MV switchgear segment has reported The domestic switchgear industry continues
OBP of about 4- 6 months. The demand for MV to innovate and upgrade its products to meet the
switchgear is expected to sustain for at least next evolving/future needs of its customers with the
three to five years. Similar to LV the numbers of following products/trends:
players has increased substantially, again pushing
down prices .Investment in new infrastructural setup Low Voltage
is set to increase the market for ISGs, RMUs and l Increased acceptance of electronic releases in
C&Rs. circuit breakers
l Embedded Intelligence and communication
High Voltage / Extra High Voltage enabled
The extra high voltage switchgear segment has l Improved materials for cost saving, environmental
shown relatively better growth at 12% compared to reasons and ROHS

28 May 2009
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l Movement from motor starters to submersible l Expansion of Infrastructure like telecom, railways,
pump controllers airports, ports, roads, hospitals etc.
l Soft Starters l Replacement and retrofitting programmes
l Increased use of modular device in building
electricals
Threats
l Vacuum contactors for higher ratings Some of the threats faced by the Indian Switchgear
Industry are:
Medium Voltage
l Underutilization of installed capacity
l More use of magnetic actuators l Lack of HV switchgear test facilities in the
l Field for Life-Maintenance free (IEC- M2 duty - country
10000 Operations) l Increasing competition from unorganized sector
l Shift from Electromagnetic to Numerical relays in low end/low tech items/imports in LV segment
l Shift from Electrical sensors- CT/PT to electronic and project imports
sensors. l One sided contracts by the user industries/ Price
l Ring Main Units Variation contracts not accepted by many users
l Improper procurement planning/bunching of
High Voltage / Extra High Voltage
orders
l Compact GIS l Increasing customization even for few items
l Compact AIS l Entry of unproven contractors/ sub-contractors
l Compact switchgear with minimal technical knowledge
l Controlled switching
l Solid State switchgear Conclusion
l Intelligent switchgear Although the electrical industry is currently facing
l VCBs with higher ratings a slow down, the demand for electricity is ever
increasing. The government following the industrys’
Weaknesses
requests provided various stimulus measures like
l Switchgear industry has to majorly depend on the reduction in excise, service tax, interest rates, more
financially weak EBs for its sales. liquidity etc. These measures may help improve the
l Uncertainty and slow pace of reforms general sentiment, leading to recovery.
l Increasing competition from unorganized sector
The APDRP is now in its second avatar and is
and imports
slated to bring additional demand. Demand from
l Macroeconomic challenges which constrain public
Rural Electrification Programme and expansion of
and private funding
generation, transmission & distribution networks too
l Low investments in R&D,
is expected.
l Integration/Assimilation of new technologies
into development of new products in the sector Ultra mega power projects, nuclear power
needs improvement programme, number of JVs by public and Private
sector for manufacture of plant equipment including
Opportunities super critical 800 MW turbines and boilers etc too
l Generation capacity is expected to be agumented are under progress to help debottleneck the power
by around 78,577 MW under Eleventh Five generation programme.
Year Plan (2007-2012). More then 60,000 MW
Renewable/Alternative
under construction.
energy initiatives like
l The T & D network expansion
wind, solar, biomass,
l The Government is focusing on increasing the
mini/micro hydel etc are
penetration of power supply in villages. Schemes
gathering steam.
like APDRP and RGGVY are providing an excellent
opportunity for the LV and MV under, “Electricity All this offers a huge
for All” initiative opportunity for the power
Anil Nagrani
l Expansion of key industry sector like cement, sector in short and
IEEMA, Mumbai
steel, petrochemicals, telecom and others medium term.

30 May 2009