We are looking at how to solve problems in India, for India: Russell Stokes

Interview with President and chief executive officer, GE Energy Connections

India’s massive restructuring of the power sector offers opportunities and challenges for global firms. The $12-billion GE Energy Connections, General Electric (GE)’s electrification and automation business, is consolidating its business in India, as the country invests to generate massive power through renewables, thermal and nuclear energy. “The economy in India is growing at a rate envied by those of us in the US,” says Russell Stokes, president and chief executive officer, GE Energy Connections, during a recent visit to Bengaluru. Stokes and Rathin Basu, managing director of Alstom T&D India, spoke with Raghu Krishnan in an interview. Edited excerpts:

How is the integration of GE with Alstom faring?

Stokes: When we acquired the Alstom entity, the piece that came to us was the Alstom grid business, which was the continuum we wanted to be able to deliver to the market. We got high-voltage technology that allows us to connect power generation platforms to connect to the grid. We had a T&D (transmission and distribution) business that has been integrated into one entity.

What are the power trends in emerging markets and in mature markets, where generation is not as much?

Stokes: In emerging markets, we are seeing significant demand for new power generation. In more mature markets, we are seeing upgrade happening in power generation, some countries are transitioning from coal to others in automation. If you were looking at investments having been made, penetration of power generation, gas turbine, coal and even nuclear is pretty significant. What is missing is now the fact T&D in networks has not been invested at the same level. A reason why they need to invest is due to the energy mix, which is desire for greater renewals.

How do you define the opportunities in India?

Stokes: In India, we continue to do progress. We see our ability to work across different projects in the country. We see the challenges around the financial health of some of the discoms (distribution companies) and we are trying to do what we can do to be a great partner in what could be a challenging times. The Indian economy is growing at a rate envied by those of us in the US.

We see Uberisation of products and services across sectors, where organisations are saying that we will pay you on tap and don’t want to have assets on our books. Would GE look at this in the power business?

Stokes: As a matter of fact, inside one of the businesses that was built out of GE is the Current, powered by GE, whose focus is what you said. They are working with cities and telling them let us help with retrofit, we will finance, manage assets and offer per-kwhr (kilowatt hour) rate. That’s what we are focusing on and that is why Current was set up.

Would you look at this model in India?

Basu: Today, we don’t see that model work in India. It is evolving. (Prime Minister Narendra) Modi is trying to make smart cities. The concept of smart cities is evolving. As you know, each city has its own municipalities. It is a challenge and there should be a national thinking on that.

The government has talked about massive rural electrification.

Basu: Rural electrification and transmission has been strengthened at the central level. India needs to replicate its success over the past two decades on investing in technology, switchgear and automation-distribution. The bottleneck is in distribution. The generation of power is 290 GW (gigawatts) but the real load on the networks is 145 GW. There is huge play uplift to the consumption of electricity.

Would the Uday (Ujwal Discom Assurance Yojana) scheme change this?

Basu: It will help raise the sector. In the past four years, the sector is undergoing a difficult phase. The scheme will significantly help discoms come out of $60 billion of losses. The economy can be accelerated if we execute well. It depends on eight or nine states.

You have 21 factories in India? Can we look at additional investments and expansion?

Stokes: We are always looking at which is the most compelling place to make the next investment. We have to look at many parts of the globe where manufacturing units are working 100 per cent and balancing the load. We will continue to look hard here and what more we can do. The engineering teams are looking at a multi-disciplinary effort and how to solve problems in India, for India. In the next phase, it would be what can be done in India and for the world.

What are the challenges in India and globally?

Stokes: In India, one of the things we are looking at is that state enterprises have financial challenges. Solvency of some of these is what we are paying attention to. Globally, commodity prices and economies which have oil as a source of income. How investments are made in these countries may have an effect on us.