HVDC a $30 bn market but India barely in the game: Sterlite Power MD

Renewable energy is now the cheapest power source. Companies primarily buy it for cost savings, with environmental benefits as a bonus

Pratik Agarwal is the managing director of Sterlite Power, a leading power transmission infrastructure company and producer of cables, the weakest link in India’s journey to Net Zero. He is also the chairman of Serentica Renewables, a developer of renewable projects, focusing on providing power to businesses. Of the Rs 3,000 crores of the privately held Sterlite’s revenues, 40 percent comes from exports, with more than half from the Europe and the US. Sterlite Power wants to double revenues to Rs 10,000 crores in the next three years focusing on both Indian and export markets, Agarwal told Business Standard in Mumbai in a sit down interview, naming India, Korea and Taiwan, are the three places which are going to take a lead in that entire chain. The interview is edited for space and clarity.

 

What would be the impact of the Trump administration energy policies on your businesses?

 

First, let's understand the demand side of the US. Until 2022, the US was a de-growth electricity market. Everything changed last year, when the US became a growing market where even a 1% growth is thousands of megawatts. The growth came largely because of the AI boom and data centres. With the new US administration, there will be a heightened anti-China sentiment, and those products which have the slightest concerns around cyber security will see a virtual ban. India will be a very strong beneficiary of that entire demand, if it can ramp up its production capacity quickly. We see cables a little bit in that area.

 

Will Trump’s anathema to clean energy hurt companies like Serentica?

 

Today, renewable energy is the cheapest form of power available. Companies are buying it because it’s cheap first, and green second. Once you have something that’s commercially viable, global policies don’t matter much beyond a point. For multiple reasons—including cost, the green aspect, and the fact that clients (let’s say Zara in Europe) want to know the power source—renewable energy becomes the obvious choice.

 

Where do export opportunities lie for Indian companies in transmission?

 

The huge opportunity lies in the more complex part of transmission, which is HVDC. (High Voltage Direct Current is a method of transmitting electricity over long-distances and to connect power grids.) Transmission is a bit different in renewables. The existing grid was not designed for this amount of fluctuation in a given day. It makes the grid unstable and reduces the overall efficiency of the grid. So you need components like static compensators, which are installed in different parts of the grid (to manage fluctuations.). It's a very sensitive product, because in the wrong hands, you can trip the whole grid. So those are the kind of things, where India will have a very strong edge, because we are low cost manufacturing, good at electronics, good at IT and US and many parts of the world will have concerns buying from China.

 

How big is the Indian transmission market?

 

India is a Rs 8 trillion electricity market—about $100 billion annually. Of this, 35 percent is consumed by commercial and industrial (C&I) users. C&I is growing at 10-11%, and will double to $70 billion in the next six to eight years. The overall market grows at 5 percent.

 

C&I is also among the most dissatisfied because they’re stuck with monopolistic DISCOMS, which charge volume premiums, deliver poor service quality. Therefore, the incremental $35 billion in demand over the next decade is most likely to be served by round-the-clock renewable companies, not conventional DISCOMs.

 

What is Sterlite’s role in India’s growth?

 

India will award Rs 9 trillion of transmission projects between 2024 and 2030. In FY 2025, India will award Rs 1.5 trillion of transmission projects. Our historical market share has been about 20% so we expect about Rs 20,000-30,000 crores this year and maybe over next five years, about 50,000 crores of projects, executed in another 2 years after that.

 

What would you like the government to do?

 

PLI and investment incentives have worked in other sectors. They must aggressively bring that to T&D, specifically high end cables, transformers and HVDC. It's huge export potential.

 

What is the size of the HVDC market we are talking about?

 

The global HVDC market is valued at $30 billion annually, with cables estimated at $10-$15 billion. India's current market share is minimal—HVDC at zero and cables less than 5% globally. This represents a significant opportunity, especially compared to sectors like batteries and solar modules where neighboring countries already dominate.

 

Currently, the transmission sector receives zero budgetary support, operates on a Rs 9 trillion market size, and finances itself entirely through commercial borrowing from banks, PFC, and REC without any interest rate exemptions.  

 

Is HVDC is a key component for India’s transmission development?

 

This is going to be a critical link, not just because of India’s geography. Electrons are the new oil. As heating and cooling in the West increasingly shift from gas-based systems to electricity-based ones, the demand for oil decreases, but the need for more electrons increases.

 

Now, oil is currently the most traded commodity in the world, but less than 2% of the world’s electricity is traded. This is primarily due to the lack of HVDC (High Voltage Direct Current) links today. Let me give you an example. Japan, which is about 7,670 miles from India, has a peak power cost of 25 rupees per unit at 8 PM Tokyo time. At the same time in India—around 2 to 3 PM—our solar energy is at its peak, producing power at just Rs 2-2.2 rupees per unit. If there was an HVDC link between India and Japan, we could be producing power at Rs 2.3 here and selling it in Japan for Rs 25.