Navigant Research Blog

India’s Power Sector Moves into the 21st Century

— January 14, 2015

In December, ABB announced a $55 million project win in the Indian states of Behar and West Bengal.  ABB will install both transmission and distribution (T&D) substations, incorporating ABB substation technologies with fiber optic telecommunications systems and new substation automation systems.  As a part of an overall goal to meet growing demand, improve access, and reduce losses, the facilities will support generation and other transmission investments in Northern India.  And ABB isn’t alone – big wins in India have also been announced by Alstom and Tata Consulting Agency.

India has seen a lot of activity in terms of electric infrastructure investment over recent years, and the nation is on its way to becoming a global leader in the installation of smart grid technologies.  As my colleague James McCray describes, these Investments are benefiting from several large-scale efforts to expand electrification, reduce the environmental impacts of generation, and decrease power system losses.  In 2009, The World Bank and POWERGRID (India’s transmission operator) introduced the Fifth Power System Development Project, a series of transmission investment projects set up to bolster India’s then-troubled economy through providing resources for industrial and agricultural enterprises.   Now in its fifth year, the planned $16 billion program has funded regional projects in both Northern and Southern India.

Acceleration

In terms of expanding and updating its distribution grid, India’s central government has begun the second stage of its Restructured Accelerated Power Development and Reform Programme (also known as R-APDRP).   This two-phase project has supported individual state utilities in an initial stage of data gathering for information and planning, as well as the aforementioned second stage of new grid construction and upgrades, including advanced metering infrastructure and distribution automation rollouts.  Investments under this plan are expected to total around $10 billion.

If you haven’t noticed yet, the sums of money involved are tremendous.  The global smart grid market for distribution was forecast at $15 billion in 2014, indicating that if India is allocating between $10 to $20 billion (of the $26 billion total for T&D) over the course of a few years, that would make the country one of the world’s largest spenders, the United States, Western Europe, and China.  Yet, India’s Power Minister, Piyush Goyal, stated in November that India needed to put even more into its T&D infrastructure – $50 billion over the next 5 years.

The Big Shift

India has several primary drivers for investment: growing demand and a need to increase electrification; reduction of fossil fuel consumption (the majority of India’s electricity is coal-fired according to the U.S. Energy Information Administration, and the country wants to install more solar); and reliability (India has suffered heavily from rolling blackouts in recent years).  At the moment, India’s grid is constrained due to limited and aging infrastructure – some estimate that generation plants are utilized as little as 70% because of this.

Investing in new infrastructure and smart grid projects, India is targeting efficiency while simultaneously extending its grid.   For the time being, India will increase coal-fired capacity to meet its demand challenges, but the country is also promoting renewables both directly (through government investment) and indirectly as it improves its transmission infrastructure.  With these investments and states such as Gujarat leading the way in progressively supporting renewables, it is possible that India could soon shift from an underdeveloped energy infrastructure heavily dependent on fossil fuels to a leading example of clean and efficient energy at a national scale.

 

High-Voltage Transmission System Landscape Undergoes Dramatic Change

— June 24, 2014

The high-voltage transmission system (HVTS) landscape can only be described as vast and evolving, as the forces of modernization, urbanization, and industrial expansion are transforming the power grids in Asia Pacific, Middle East, Africa, and Latin America.  In my forthcoming report, High-Voltage Transmission Systems, I explain why each of these regions represents a tremendous opportunity for the seven major HVTS technologies and why the market is expected to grow strongly.  These HVTS technologies include:

  • High-voltage direct current (HVDC) systems
  • High-voltage alternating current (HVAC) systems
  • Submarine and superconducting cables
  • Flexible AC transmission system (FACTS) solutions
  • Asset management and condition monitoring (AMCM) systems
  • Supervisory control and data acquisition (SCADA) systems
  • Substation automation (SA) systems

Both Europe and North America are clearly more mature markets.  Aging infrastructure and the adoption of utility-scale wind and solar generation will drive the reconfiguration of the HVTS network in those regions, likely creating many new opportunities.

Tectonic Shifts

The increasing investment from the private sector is exemplified by Berkshire Hathaway’s rebranding of MidAmerican Energy Holding Co. as Berkshire Hathaway Energy.  The Electricity Transmission Texas (ETT) partnership, which combines Berkshire Hathaway Energy and transmission system operator American Electric Power, demonstrates the foresight needed to invest in these large-scale infrastructure projects and points to financial markets seeing long-term opportunity in the next generation of the HVTS network.

The HVTS market has a history of epic mergers, such as Alstom and Schneider Electric acquiring parts of Areva and General Electric’s (GE’s) takeover of Alstom, that point to a shifting landscape of HVTS players.   From a technological standpoint, we are seeing the beginning of a new era where the Internet of Things (IoT) hits the HVTS market full force with inexpensive, easy-to-install wireless and remote sensors and cloud-based computing resources that use complex analytics and machine-learning algorithms to manage all aspects of the HVTS.  Indeed, the HVTS roadmap will be an interesting and profitable journey over the next decade and beyond.

 

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