Power and Distribution Transformer Market in India 2014 and 2020

The Energy & Natural Resources Market Reports has been published today. It provides updated in 2018 year analysis of energy & natural resources industries.

Aggregate Technical & Commercial (AT&C) losses has been a drag on the overall power in India and despite several reforms, little success has been achieved in reducing the loss levels across the country. Unbundling of state electricity boards into separate generation, transmission and distribution companies was done to promoting greater efficiency by streamlining operations of distribution, transmission, generation and trading, while also promoting transparency and accountability. However, 10 years since unbundling exercises was initiated, no state can claim that it has achieved the overall objective that was to be achieved through restructuring of SEBs. Accelerate Power Development & Reforms Programme (APDRP) that was launched in 2001 to reduce the loss levels to 15% by 2007, failed miserably due to several reasons and there is not even one state that can claim to have reduced the loss levels to 15%. The Restructured- Accelerated Power Development and Reforms Programme (RAPDRP), the most recent power distribution sector reforms seems to be step in right direction but one is not sure whether it will be able to achieve the objective of getting AT&C loss levels across India to 15%.

So, what exactly is required to stem these high AT&C losses, the answer is simple strengthening the power distribution / supply infrastructure & 100% metering across the 4 echelons of power distribution i.e. substation, feeders, distribution transformer and consumer. In an earlier edition of the report on Transformer Market in India had estimated that over 400 GVA of transformer capacity out of the total installed capacity of 1040 GVA would require repair / retrofit / replacement (as of 2012) and the number is slated to increase to 1548 GVA by 2020 out of estimated installed base of 1548 GVA. Overall a major revamp in the power evacuation infrastructure is the need of the hour and this will drive the transformer industry in India over and above the new opportunity that will be required to support the increasing power generation capacity addition.

The electrical T&D equipment market in India has been through prolonged spell of slow down and green shoots has started emerging. Industry believes that with change in guard at the central government, next wave of investment in power sector will kick in which will drive the demand. The future looks very promising for the Transformer Industry as the country’s installed generation capacity is set to double from the levels of 228 GW to over 700 GW by 2030 and if a simple thumb rule of 1.5 MVA transformation capacity is required to support 1 MW capacity addition is considered, new demand for transformer industry is likely to be over 700 GVA alone. With an objective to achieve most optimal loss levels of sub 15% in the entire power sector, Transmission sector has to play a greater role, which is why under PGCIL, Transmission sector is moving quite rapidly towards UHV from EHV, this in turn is likely to increase demand for 765kV and 1200 kV Power Transformer. No surprises hence that despite excess capacity, some of the world’s largest transformer manufacturers from countries like China (TBEA & TWBB) and South Korea has set up shop in India. While on other hand some of the traditional players that have existed in India’s electrical equipment market are now looking to exit as they seem to have outsmarted by influx of overseas player that are able to provide top notch technology at a competitive price.