‘India needs a new policy framework with global standards to enhance electrical safety’: Rajesh Kumar, Eaton

New technologies and changes in the electrical equipment policy framework can solve India’s problems related to the distribution of power to the last mile.

   
Rajesh-Kumar-eaton

India is witnessing rapid growth of the power sector because of rabid urbanization and supportive government initiatives such as PM KUSUM, smart meters etc. In addition, Government allocated Rs. 22,000 crore for the power and renewable sector in Budget 2020. The growth of the power sector is also driving the growth of the country’s electrical equipment market, which is expected to hit $100 billion by 2022, up from $27.3 billion in 2017-18.

“India is surplus in power on paper and still there are pockets which are not getting the quality power, mostly due to distribution misalignment in the network. And, technology is one of the factors affecting the network”

Rajesh Kumar, director – marketing, electrical sector, Eaton, which is an American power management company.

In a conversation with SMEFutures.com, he talks about the state of power in India and how Eaton is innovating new technologies with a focus to move deeper into capital cities and industrial towns.

Excerpts:

Electrical equipment sector is growing at a continuous pace. How has this segment contributed to Eaton Group?

Electrical industry in India is huge. But in my opinion, India is surplus in power on paper and still there are pockets which are not getting the quality power – the power which is required by any citizen of India 24×7. Barring major urban cities, there is still scarcity of power in rural regions. I am not saying we do not have power, but there are roadblocks due to which people are still deprived of electricity.

The biggest reason is distribution misalignment in the network due to which we are not able to transmit or distribute power to the right pockets. And the factors affecting the network are – technology, the maintenance issue and some of the challenges on the policies that exist.

While, dealing with all those issues, Eaton is constantly innovating and producing global products. We have come up with several smart switch gears in the last two-three years. Going forward, the focus is to bring retention switch gear to the country from our global portfolio. Provide the smart solutions to the utilities and use them. At the same time, we have some of the unique solutions, which are changing the paradigm of electrical components sector.

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One of them is a non SF6, an environment-friendly switch gear. The product has been one of the biggest hits in ELECRAMA 2020. Till now, more than 100 thousand units have been sold across the world. With our unique products, we are exploring the Indian utility scenario. Our products can cut down the maintenance cost and solves issues related to the distribution of power to the last mile.

Please give us more insights on how Eaton is innovating. What is the USP of your offerings?

Innovation can have multiple meanings. For us, innovation means India is looking forward for innovative buildings or smart buildings. When we talk about smart buildings, we also require smart equipments to support the facility.

Smart doesn’t only mean to communicate, but at the same time, smart solutions should have some qualities such as compactness. It should look elegant aesthetically as well. On the other hand, the solution should be capable of communicating through predictive and preventive analytics. This will give enough responding slot to the utilities and the user to take command or take decisions before acting. Our solutions can be used in multiple facilities such as hospitals, IT buildings, hi-tech dairies and at the public places like metros, railway stations, where human safety is prioritized.

Now, coming to our portfolio, I already mentioned about environment-friendly non SF6 switch gear. The second innovative product is for homes. We call it fault detection device Arc Fault Detection Device (AFDD). As far as I know, there is no other product which works on preventing fire or short circuits incidents by blocking the electric arc. Electrical arcs or arc faults are often responsible for electrical fires in commercial setups and residential complexes. Eaton is the first to introduce such solution in the market.

In addition to its AFDD capabilities, the new device incorporates a residual current device (RCD), short-circuit and overload protection to provide an all-in-one solution that is easy to install. In Indian terminology, RCD is called Earth-leakage circuit breaker (ELCB).

We also have various miniature circuit breakers (MCBs) which are used in residential, commercial and industrial applications. Our other offerings include a product, called Digital RCD, that enables operator to get predictive and preventive analytics data for the step by step current leakage. We can digitally control it, so that the 30 per cent or the 50 per cent of the leakage moves up. It can be remotely controlled, monitored and reduces the wastage of the inventory. At the same time with this solution power tripping can be avoided to prevent losses. Another new product, which no one has launched yet, is the compact 33 kV switch gear.

The main USP of our solutions is that we are selling the global products in India. The products being manufactured at our Pondicherry hub, are all certified via global systems. They are similar to what is made in Europe or other Asian regions. I can say, we are at par with those products.

We are also manufacturing fuses for electric vehicle segment. Eaton produces converters, power distribution units, hybrid and battery-electric transmissions and high-voltage fuses. The company has over 15,000 hybrid and plug-in hybrid vehicle systems on the road globally through Eaton’s electrical and traditional vehicle arms. Most luxurious car brand also uses Eaton fuses. So, the most important factor for us is that we sell global standard products in India.

Eaton primarily started with the power quality equipment business, and it is now leader in UPS systems. How has the overall Indian market evolved for you?

The latest research report by Market Research Future reveals that the global power quality equipment market is set to register a steady CAGR of 5.5 per cent during the forecast period of 2017 to 2023. The ever-increasing requirement of power and the various trends in other industries are the major influencers of growth for the global market.

Likewise, in India too, power quality business will continue to provide opportunities for couple of decades more. This is the sector, where India is still short of quality power. So, UPS products would continue to be a requirement as we still deal with lot of gaps in power distribution. This factor will also result in steady growth of the UPS business with growing technology, including lithium ion, battery management, modular and scalable UPS.

Beside the power quality business, we are also world leaders in the electric fuse manufacturing. With all the innovations and new technologies, we would continue to improve whether it is electric vehicle or photovoltaic cells. When it comes to the switch gear solutions, more concentration is on the medium voltage because that is the future.

India is dealing with issues on power distribution, and Eaton is confident to bring more products in the distribution segment.

What are the other factors that challenge the country’s power management?

As per the World Bank report revealed that demand for electricity in India will almost triple between 2018 and 2040. But despite progress, many challenges remain. One of the many roadblocks is the challenge to meet the power demand especially in the rural areas. This has been prevailing due to the under investment in transmission, underpriced electricity, and high losses of distribution utilities. Besides that, there are challenges associated with the policy framework and prices and quality issues.

To mitigate the challenges, we must put forth some stringent standards. These measures should help eradicate challenge of low-grade products, which are being sold in the market. This will safeguard interest of the users and we can easily protect the assets and lives of people from mishaps.

The policy framework should include the global standards that should include rules for certifications – such as without the certification, no product can be rolled out in the market. Most of the consumers lose faith in Made in India products as they are not as per the requirement and standards, therefore there must be some check criteria around the product manufacturing.

These are some of the areas we need to work on as an industry.

The tier-3 and tier-4 cities are under transformation phase in terms of digital products, and still uses conventional products for electricity consumption. Do you see it as a challenge?

First of all, the government has to think about the policy change. We talk of a mandate on earth leakage circuit breaker to be installed in every home for preventing electrical fire accidents. But along with this, policy should introduce some checking mechanism under which we can check the quality and working conditions of those circuit breakers.

Secondly, there should be ban on spurious and second grade materials which are being used in Indian homes. When the real situation occurs, those ‘cheaper’ products don’t work, leading to life costing incidents. For this, we have to work on various roadmaps to create awareness on safety standards. Also, operating in rural areas becomes challenging as equipments are not up to the mark, even though electrification has reached across the country.

Thus, electricity safety can only become better if the government will push stringent standards and create a strong ecosystem to look after.

Demand for electrical equipment is increasing steadily. How important is tier-3 and tier-4 cities from Eaton’s investment standpoint? How important is India, and what are the initiatives that the company is taking?

Eaton understands that business is moving out of the metro cities. Slowly it is going towards the tier 2, 3 and 4 cities – mainly to the industrial towns and the capital cities of the state. So, we are very much encouraged in investing in those markets. As per our go to market strategies, we work differently each year.

For instance: in 2018, we initiated a programme, called ‘Blueprint for Safety’, which involved India’s associations such as CREDAI, consultants, builders, decision makers, electrical inspectors and the customers. We joined hands with them to promote safety culture across the country. In 2019, we initiated a program, called ‘Switch to Future’, to take forward the innovation and new products. Those products were focused mainly for tier-2 and tier-3 cities that include capital cities and industrial towns. This year in 2020, we are again very much confident to move more deeper into those cities and belts where we can educate and enhance the knowledge of the user base.

From the distribution business, we are pretty much into expanding the channel currently. We are expanding year on year with our new market strategies. We have shifted our focus from metro cities to tier 2 and tier 3 cities. In metros, we already have a strong network of channel management for all our businesses, whether it’s power distribution or power quality. Now, we are expanding in tier-2 and tier-3 cities and focusing on expanding more channels in these areas.

Lately, there is a significant thrust on shifting to alternative energy solutions both from the government and citizens at large, how is the electrical equipment industry catching up with the trend? What are the challenges?

I think we are already geared up for the transformation. Renewable energy is providing immense opportunities for manufacturing sector in terms of leveraging new technologies and innovations. Renewable energy is one of the major contributors in our business. We are already enjoying the benefit of diverse portfolio. We are very much into the solar space, wind space, and into the alternate energy. We are already manufacturing components which are being sold for all these segments.

At the same time, we are constantly enhancing our portfolio and introducing new series of products for solar, wind and alternate energy resources. For instance, we already introduced a 33 kV, very small switch gear which costs same as air insulated switch gears of the competitions. The size of the switch gear is down to 50 per cent of the conventional one, which reduces the footprint and cuts the cost of installation.

India is still low in terms of power equipment exports, how the sector can change the scenario. What are some of your initiatives?

The domestic industry is now by and large geared up to meet the current and future demand of the power and other sectors of the economy. The aim, under Vision 2022, is to make India the country of choice for the production of electrical equipment and reach an output of $100 billion by balancing exports and imports. But if we look at the data, total industry production for 2017-18 stood at Rs. 1,75,000 crores (US$ 27.3 billion). The industry’s share of export was Rs. 41,792 approximately 6.5 US$ billion while imports were recorded for Rs. 55,603 crores app US$ 8.6 billion. In 2017-18, exports of electrical equipment stood at about 3 per cent of India’s total exports. 

I think the reasons for the slight deficit in electrical equipment export can be many. Firstly, major products are being manufactured by MNCs in India and they strategize to grow country to country. Unless companies think of ‘centre of excellence’ concept and different products are manufactured in various regions, the concept would work for exports more.

However, due to the thrust in Make in India initiative, the companies are forced to invest in the country more. This had led to companies such as us localize and Indianise the products and take on the competition. It’s not so clear whether India can grow the export figures so easily, as the competition has become stiff.

How to foresee the future of Indian electrical equipment market?

As per the report of Seconded European Standardization Expert in India (SESEI), the Indian electrical equipment industry contributes 8.1 per cent of the manufacturing sector in terms of value and 1.35 per cent of India’s GDP. The sector provides a direct employment to 5 lakh people persons and indirect employment to 10 lakh people and over 50 lakhs across the entire value chain.

The transmission and distribution (T&D) equipment sector is 85 per cent of the industry whereas generation equipment sector is 15 per cent. During FY18, the production of electrical equipment industry has witnessed a growth of 9.9 per cent to Rs. 1,75,000 crore (~21.7 bn euros) over the previous year. Power distribution and transmission equipment like transformers, conductors, meters, cables and switchgears registered good growth as the government is enhancing transmission capacity and pushing states to improve distribution network.

POWER EQUIPMENT SECTOR AT A GLANCE-EATON

However, apart from growing steadily the market growth majorly depends upon the industrial growth of the country. Way back, at least a decade ago, with the growth of power plants, good growth of electrical equipment pulled the market. In today’s scenario, infrastructure growth is almost stable, which I feel, is affecting the growth areas for electrical equipment sector in some way.

However, for the next couple of years with the digital transformation and inception of renewable energy the industry is innovating and growing at a steady pace. With various government initiatives for electrification, will also improve the electrical equipment industry consumption.






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