Cables, Wires & Switchgear Industry

Power problem in the country - be their be irregular supply, tripping or just plain shortages have reached alarming proportions over the last six months alone, the grid in Maharastra has tripped more than twice , reason being over drawing by Maharastra and grid disturbances. The problems in India's capital and most other states have been worser. States like Karnataka and Gujarat resort to load shedding every day. But what is worse is that even when shortages have reached the hilt no remedy appears in sight.

Energy shortages which were at 9.2% in 1995-96 are expected to reach 15% by the end if eighth plan(1996-97). The peak power demand which is the crucial factor for efficient industrial working has deteriorated from bad to worse. Peak power shortages which stood at 16.5% during 1994-95 increased to 18.3% in 1995-96 and are expected to shoot up to 29% by the end of the current year.

 

The current crisis can be directly linked to the bureaucratic wrangles and policies which the indian power sector has witnessed. Even after nearly six years of announcing private participation, there is almost no progress worth mentioning.

It has been nearly six years since the policy inviting private participation in power sector was announced in the country. Considering the foreign exchange crisis the country is facing then liberal terms were announced to attract private investment especially from abroad.. The response was very enthusiastic. Nearly 200 letters of interest have been registered since then. This encompassed an investment of more than Rs.280,00 crore and an addition to the installed capacity of 75,000MW almost equal to the current installed capacity in the country. Of these 51 proposals totaling 35,000MW (involving an outlay of Rs. 140,000 crores) was from foreign developers/investors. About 100 projects requiring Central Electricity Authority (CEA) clearance (costing more than Rs. 100 crore) are being processed at the state level.

The new government has taken several steps towards restructuring the power sector sector. A common minimum action plan (CMAP) was finalised by the ministry of power in consultation with the states. The CMAP seeks to provide a new regulatory structure by setting up independent national and state level regulatory commissions. The salient features of these new initiatives are.

(1). an independent regulatory commission will be set up in each state.

(2). Rationalise the tarrif structure at all levels.

(3). Initiate the process of private participation in transmission.

(4). Implement all on going project as early as possible by providing adequate plan outlays.

(5). Undertake renovation and modernisation programmes of existing capacity.

(6). Evolve clear policies on purchasing and wheeling of power from captive/co-generation projects.

(7). Improve the hydro-thermal mix of encouraging exploitation of hydro potential.

It is a case of derived demand. With the privatisation of power sector, the power ancillaries units which is closely linked to it is in for boom times. The power ancillaries sector on the surface looks chaotic but underneath it is stable. Chaos in this sector comes in many forms -erratic payments (from intransigent and indifferent SEBs) and chaotic capacity utilisation (the current capacity utilisation is 60%) resulting in chaotic margins. The only factor that lends stability to industry's economic dynamic is demand- the unrestrained thrust to generate power in the county will mean that the demand will be durable and definite.

Power cables

Cables which carry more than 0.66 kv of power are known as power cables. The power cables industry can be broadly divided into three segments, conductors, power cables and light duty cables.

Conductors:- Conductors are used for bulk overhead transmission of electricity from the power plants to the feeding stations. In most cities as overhead transmission has been banned, conductors has been replaced by PVC and XLPE cables which can be laid underground. Nevertheless the bulk of power transmission is done by using conductors.

Power cables:- There are basically three kinds of power cables manufactured in th country-paper insulated lead cables (PILC), polyvinyl chloride (PVC) cables and cross linked polyethylene (XLPE) cables. PILC are one of the oldest variations of cables, generally carrying voltages upto 33 KV. However most of the countries have phased out the production of these cables. The former USSR was the major user of PILCs and before the disintegration of USSR, almost all PILC manufactured in India were exported to USSR. However after the disintegration of the USSR and the split of nations opting for higher technology cables, this market terminated. Though companies in India still manufacture this cables the quality of the products have been declining and will be phased out in the future.

Currently, the most widely used cables in India are the PVC cables. The PVC cable technology is relatively older than the XLPE cable technology and as such these cables are being replaced by XLPE cables. The major difference between PVC cables and XLPE cables is the insulation material. Light duty cables (LDC):- LDCs mainly consist of PVC/VIR cables and flexible/winding wires, used in the industrial and domestic sectors. This segment falls into four four general categories-flexible cables(used in appliance manufacture, electrical panel wiring etc), lighting cables used in household and other lighting) vehicle wiring cables (used in vehicle manufacture) and PVC submersible wire/cables (for pump manufacture).

Raw materials are an important cost element- copper and alluminum are the main conductors, lead coverings, PVC, rubber, cross linked polyethylene(XLPE) are the main insulators. Copper is giving way to aluminium. However the entry of the private sector into the manufacture of copper argues well.

In a scenario where raw materials account for a large component of total cost and where none of the domestic cable companies is dominant enough to influence global commodity price trends in the item it consumes. Cable manufacturing companies have to compete by establishing efficiencies in their production process. These efficiencies embrace:

(a). The adoption of sound manufacturing practices and a severe control on overhead.

(b). A degree of commodity trading skills to make timely purchases of raw materials.

(c). Inventory and receivable management Privatisation should hopefully translate into quicker realisation of receivable.

Circuit protection and safety equipment

Miniature Circuit Beakers (MCB)

There are a number of MCB manufacturers in India with a total installed capacity of around 60 lacs p.a(estimated by (TIDE). Between 1984 and 1993, the industry showed a growth of 31% p.a in production. Demand in 1994-95 has been estimated by the Electrical and Electronics Manufactures Association (IEEMA) at 39 lacs. A major player in this industry is Havells India Ltd. Mr K. C Malik Executive director says the company has established an excellent position in MCB market and it has been able to retain its market share of over 20% in the light competitiion from formidable multinational companies.

Earth leakage circuit beakers (ELCB/ELCB+MCB)

The department of power of the government of India has by gazette notification (in 1985) made the installation of ELCBs compulsory for sanction of fresh electrical connection except where the load is less that 5 KW and the voltage is single phase 230 Volts.

This limit has subsequently been reduced to 2 KW. Mr Ashok Narang MD of Clariton says that its ELCB provides ahigh level protection against earth leakage faults.

In a nut shell the industries allied to power sector is expecting to grow and the trends available in the industry indicates that sanctioning and functioning of new power project will give the much needed impetus for growth. We expect this year to be a good one for the power sector says Mr. K. C Malik, Executive Director, Havells India Ltd.