The new rise

On May 10, 2015

Government’s ‘Make-In-India’ campaign catching huge attention across the globe, it is clear that India’s power demand is set to witness sharp rise in the near future. ENGINEERING REVIEW has taken views from industry players to evaluate the latest trend & possible remedies to enhance the position of the industry to shine in the global arena.

Mr.Vijay Karia – Chairman & Managing Director, Ravin Group

Q. What Trend will drive Power industry in near future?
The power industry is basically driven by thermal generation, most of which is coal based. The high costs of coal as well as better technologies have driven our sector towards renewable energy which will be an ever-growing demand.

The government has set up a very ambitious target for generation of 1,00,000 MWs of Solar Energy by 2022. Even if we fulfil a sizeable quantum of this, we see that :

There will be high emphasis on localized generation, distribution and consumption
Smart grids will come more into play
The trend will be towards smaller grids like micro and mini-grids and hence may be for such areas dependence on transmission will reduce
Advent of smart cities will drive a coexistence of power with fibre
There will be more synergy and more usage of electronics in electrical industry

Q. What is the impact of Union Budget on the Industry?
The Union budget has not really changed the fortunes of the power sector, and in that way it has been a little bit negative. There is no visibility on de-stressing the utilities nor is there any commitment of funds in the future. There is news of banks committing some amounts, which media reports say to be around 5 lakh crores for the renewable segment. However, those reports need to see some substantive backing in terms of commitments by banks, and a lot bigger adherence to commitments by the Government to show their intent to convert this into reality. At the current moment the industry requires a far bigger push than what has been given in the budget and therefore unfortunately though the plan exists to increase the power infrastructure of India, there is no real budgetary confirmation to this effect, which can give a comfort to the industry that the Government is serious about the infrastructure. There is no doubt that the intent is there.

Q. What remedies do you suggest to improve the positioning of the Industry you are into?
To improve the position of the industry, some big ticket measures need to be taken.

Improve the availability of funds to the industry, for working capital,
Increase the central and state government spend on the power sector
Drastically improve the overall distribution network especially in the large cities of the country, so that T&D losses are reduced.
Encourage huge outlay into R&D and make the whole process of R&D a lot simpler and user-friendly to encourage local companies to innovate
Improve the ease of doing business in India and develop a thrust for exports by making the administrative costs a lot lower and simplifying licence rules.
Create a connect between the plans and the results by a monitoring mechanism at the PMO level.For E.g. Currently solar generation is only about 2 to 3 GWs and if we want to do 22 to 23 GWs per year for the next 5 to 7 years, then we have to be prepared for a huge change in the current style of operations, backed by complementary and cohesive policies. Centre and states would have to work in collaboration, which we do not see happening at the moment.
Bring renewable energy under the sole ambit of the Central Government with Central allocations of capacities to states rather than giving policies to the state government. Telecom would not have succeeded if every state had a different telecom policy.
Make the tariff barriers favourable to local industry, considering the higher local costs.

Mr. Ramesh Chandak, Director, KEC International Ltd.

Q . How do your percieve the forthcoming technology trends of power industry ?
The Indian power sector having come a long way is now migrating to higher voltages with enhanced focus on clean and green power. As far as trends are concerned, the power sector is highly technology intensive and there is a need to understand that old school technologies are gradually changing and advancing towards newer levels which are cost effective, sustainable and environmentally friendly. Adoption of newer technologies will also help in resolving the peripheral issues related to generation, transmission and distribution to some extent. Hence the future focus of the industry has to be on evolving and adopting cutting edge technologies. With the Indian government emphasizing of Make in India, the Indian manufactures need to invest in R&D as new and innovative technologies will pave the future of this industry.

Q.How did UNION budget impacted power industry ?
Overall, the union budget was progressive and decoded some positives for the entire infrastructure industry. Increased fund allocation, emphasis on PPP mode, revisiting and revitalizing of PPP mode, establishment of National Investment and Infrastructure Fund (NIIF), awarding of UMPPs on plug and play model wherein all sanctions will be in place before the projects start are some of the good aspects highlighted in the budget.

Q. According to you what are the scope of improvement?
For improving the positioning of this industry, the bottlenecks faced by players in this industry will have to addressed on a priority basis. Specific to the T&D sector, there are bottlenecks like Land acquisition, Right of Way, funding constraints, and procedural delays etc. Remedies like the plug and play model of awarding projects where approvals are taken in advance before the project is awarded, creating an SPV which will seek all the approvals etc. are some of the remedies which I suggest. Although the government is taking steps, the need is to address these issues more expeditiously. For the rapid development of this sector, a holistic view and action plan is required. All stakeholders have to proactively collaborate and take concentrated and coordinated efforts and action so that the industry can further accelerate its growth process.

Mr. Chandmal Goliya, Director, Kusam Electrical Industries Ltd.

Q. What is the future technology drift of power sector ?
The Power Industry will move to establish smart cities. The smart cities will be designed for smart environment with pollution free power generation. For this, the government is laying lot of emphasis for electric generation by solar PV installations.

Q. How did budget influenced the industry ?
The Union budget has not provided substantial relief in taxes & regulations for the power industry. To make the dream of the honorable Prime Minister “MADE IN INDIA” successful, the laws in the country must be simplified so that the ordinary citizens can understand the laws & there by harness their energies for more productive work.
Once the laws are simplified & human energy is not wasted in merely complying with laws, the result can be fantastic. The government must have a business friendly attitude rather than looking at business people with a suspicious attitude.