The Indian energy sector is a sunrise sector
The proposed investment of Rs 102 lack crore in infrastructure and rapid rise in adoption of electric vehicle has the potential to push demand for energy manifold.
The proposed investment of Rs 102 lack crore in infrastructure and rapid rise in adoption of electric vehicle has the potential to push demand for energy manifold. However, rising imports could prove to be a dampener for the growth of Indian electrical and electronics industry. In this interview, Anil Saboo, Chairman of the just concluded ELECRAMA 2020, shares his thoughts on impact of imports on the domestic industry and tips to boost exports from India.
What is the current status of electrical and electronics industry in India?
While Indian electrical and electronics equipment industry foresee growth, one of the major deterrents in realising the same could be imports. Though total imports increased significantly from Rs 55,608 crores in 2017-18 to Rs 71,570 crores in 2018-19, the rise in imports can be majorly attributed to ‘Project Imports’ which constitute about 11 per cent of total imports in 2018- 19. On the strength of Rs 102 lack crore being proposed to be spent on infrastructure and the planned reforms in power segment by the Government for 2020 to 2025, we expect to witness robust growth in coming years.
India, now, has a golden opportunity to shape its energy mix. Social and economic growth are at the top of the government’s agenda, and new energy sources to serve this demand are increasingly coming from renewable energy. A number of factors have contributed to this. The government policy has been supportive, and more recently, a wider set of actions - incentives, infrastructure and investment promotions were taken up. Technology development, larger-scale projects and the learning effect has allowed the use of efficient designs and have pushed down costs. This makes renewable energy attractive to power utilities that are contracting new long-term capacity, and in addition, this avoids them the burden of take-or-pay contracts and fuel risk.
An investor with a given capital can fund more projects across regions or asset-classes to diversify resource-based risks. The lower cost structure also means that an investor who is early or better prepared gains from better returns. At this stage, many challenges remain which are still being worked upon, viz grid integration, curtailment, counterparty risk, cost of finance, imbalance costs, etc. Market creation has not been easy but regulators are acting on this with tighter compliance standards.
How will rise in demand for electric vehicles aid growth of electrical and electronics industry?
The overall electricity demand from large-scale adoption of electric vehicles (EVs) in India is projected to touch 69.6 terawatt hours by 2030, helping power utilities earn additional revenue of $ 11 billion. The mass adoption of electric mobility is expected to help the power and utilities sector realise net cost and revenue benefits from both demand and supply side. There is rapid transformation underway in the country's power and utilities sector via reducing the dependence on imported coal, rising energy independence with renewables, reducing plant load factors and national grid integration.
Industries are witnessing disruptive technologies like Smart Factories, Internet of Things (IoT), Big Data, Advanced Robotics, etc. How is Indian electrical & electronics (E&E) industry responding to these disruptions?
In future, power generation and distribution firms will be forced to embrace this transition by shareholders and customers, and even by employees in the war for talented digital-native college graduates. But either way, there will clearly be a new digital platform on which power generation and other companies will be compelled to operate their businesses. There are many names for this new landscape - Industry 4.0, IIoT, Smart Manufacturing, Digital Factory, and others - but the common thread is digital, the main factor driving the valuation point of the top companies.
How can we boost exports from India?
The Indian energy sector is a sunrise sector across the entire developing world, and there exists a significant export potential for Indian companies.
To increase the export of electrical equipment and boost the Indian economy I suggest our exhibitors, visitors, and all other industrialists to adopt three things; cluster approach, adopt new technology & trends and engage 50 per cent of women at the workplace.
We have to focus on “Create in India” and “Design in India” also as we are good in start-up & innovation. We should invest in R&D and can utilise each other’s strength for a common goal & upgrade ourselves to global standards.