We are better prepared to face current market conditions

Written by Subhash Narayan | Updated: Jan 2 2014, 02:36am hrs
Alstom T&D India is eying a big slice of the R14,500-crore worth of tenders being floated by Power Grid Corporation in the 12th plan for strengthening its grid, which collapsed in July resulting in blackout in several parts of India. In conversation with Subhash Narayan, company managing director Rathin Basu says the company is better prepared to face the current market conditions armed with a strong order book of over R6,000 crore. Edited excerpts:

How has been the global scenario for transmission firms, especially for Alstom Grid

Globally, Alstom Grid has been making continuous progress in terms of technology and improving business in different geographies. With sales of around 4 billion euros, Alstom grid is among the top-3 global players with a 10% market share. We have made significant gains in some of the leading technologies, particularly towards the super grid domain where one of the latest wins was the DolWin 3 project to supply a grid connection to the DolWin offshore wind farm in the North Sea followed by another large win in India for a 800 kV/3,000 MW HVDC bipole and several others in different regions of the world.

How has been the performance of Alstom T&D India, keeping in mind the slowdown both in terms of economy and sector movement

Thanks to our early decision on increasing our local manufacturing capabilities during 2007-2009 in India, we were relatively better equipped to face the negative storm that the industry faced 2011 onwards. Last year, our turnover was R3,100 plus crore. We continue to lead the market in India, for the fifth year in a row. With a strong order book of R6,000 plus crore, almost 20 to 22 months of backlog, we are relatively better prepared to face the current uncertain market conditions. Interestingly, India has been the largest contributor to Alstom Grid orders in 2012-13, around 15% of global orders.

What do you think of the India growth story and T&D market it would unravel

Indias economic growth was quite strong until around 2010, with a GDP growth rate of above 8%. The electricity sector, including the power and T&D, played a strong role in enabling this growth. The equipment manufacturers increased their capacities; local manufacturing capabilities were developed for UMPPs, while in T&D sector manufacturing capabilities were developed up to 765kV EHV. Unfortunately post 2011, India witnessed a drastic slowdown with issues like fuel supply, land availability, environmental clearances. The next negative wave was that of the huge accumulated losses in the SEBs/discoms that crippled the power sector. The industry, for the first time since 2003, went through negative growth. We are still not sure if the worst is behind us, as India has a long way to go to raise its per capita electricity consumption from 900 kwh to the world average of 3000 kwh, over the next 20 years.

Do you feel that after the grid failure last year, the situation has improved What can be done to improve the situation

Post blackout, national authorities have taken steps to further strengthen the grid. India will build extra large capacities to manage the power flow, in AC & DC technologies, from the generating stations to the load centers. In addition Indian grid is set to add several systems and imbibe new technologies to make the grid more robust and stable... In addition, post-blackout episode, India is enhancing the transmission grid security via two specific projects to be installed in the grid in the next four years. We, at our end, are committed to make Indian grid smarter.

You are a big player in smart grid technology. Where does India stand in terms imbibing this technology

The smart grid movement is picking up at a very rapid pace. We have several demonstration projects around the world and are very active in this field with technologies that enables the optimization of power flow from the source right down to the smart city. Here in India, we have designed and built Indias 1st digital substation at Gujarat for GETCO. The emerging green corridor of 40 GW Renewable, an initiative led by Power Grid, is expected to accelerate the development of smart grid in India. For India to be truly smart grid, it also needs to do the similar application of technology in the distribution domain.

What are the issues plaguing the sector What does the future look like

There is a mismatch in the transmission capabilities coming at the central and the state level. So while the national backbone goes up to 765 kV, the states backbone is yet to move to this level. We also have the other phenomenon of so many significant amount of power being stranded. As you know the SEBs had huge accumulated losses of over R1,90,000 crore. This was one of the prime reasons of lack of investment in the T&D domain in the states. Thanks to the Financial Restructuring Plan being adopted by some of the states, supported by the financial institutions, the SEBs would be able to find the money for investment.