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Performance of Cable Industry And Its Impact on Power Sector, Shri R V Shahi, Former Secretary, Ministry of Power

IEEMA organised a day long Cable Industry Conclave with the theme "Changing Technology and Growing India" at Mumbai on 5th December, 2009. I had been invited to deliver the Keynote Address. What I decided was to listen to a few Presentations before I spoke and also listen to a few other important Presentations after the Keynote Address. On balance, it was an interesting and educative deliberation.

Before I outline the gist of these Presentations, my own extempore address and also the discussions that followed, it would be relevant to briefly highlight the salient aspects of the Indian cable industry.

  • There are a large number of cable manufacturers in India numbering almost 250. Around 125 of them are Members of the IEEMA and they would represent almost 80% of the total industry. Others are mainly engaged in manufacturing of products for house wiring.

  • The volume of this business could be judged in terms of the annual turnover, which is of the order of around Rs. 12,000 crores.

  • Just as in all other industries, out of 250 manufacturers, only 20 account for almost 80% of the volume of sales.

  • The industry is fully established for all types of cables ranging from 1.1 KV upto EHV Cables upto 220 KV (in development stage).

  • In terms of physical units, the total length of cables produced annually is of the order of over 1,15,000 Kilometre - over 82,000 Kilometre in the category of PVC and XLPE Power Cables and over 32,000 Kilometre of LT Control Cables.

  • Indian industry imports cable of different types worth over Rs. 400 crores (the value of imports during the year 2008-09 was about for Rs. 405 crores). More than 45% of total imports is from Thailand followed by about 20% from European countries, around 12% from China, 9% from U.S.A, 8% from Korea and balance from other countries. The general belief is that import from China is very high, but from the figures of 2008-09, it is around 12%, though it is understood that the import proportion from China is on the increase. Obviously, the domestic manufacturers will need to tighten their belts, examine every element of costs with a view to cutting them down and improve productivity to emerge winners in the face of global competition.

Factors impacting the growth of cable industry

Cable industry is a common supplier to almost all the industry groups, be it power, steel, fertilizer, petro-chemicals etc., or agriculture, services or even domestic requirements. However, power industry is the biggest consumer of cable. It is needed in all areas of utilities, cutting across all the segments of power industry - power generation plants, transmission systems and distribution networks. Within the power group, the largest requirements are in transmission and distribution, mainly distribution.

In the early decades of power development programmes, appropriate emphasis was not given to transmission sector and the distribution. As a result, right upto early 80's, both these important segments of power industry received inadequate attention. Investments made were much less than required. Effect of this was rightly experienced in terms of avoidable stresses and strains in transmission and worse in distribution of power. Gratifyingly, with the emergence of national level power companies like NTPC, NHPC, and later Power Grid etc., Extra High Voltage (EHV) transmission system started receiving better attention.

Since the Indian cable industry has remained, by and large, confined to low voltage systems, the expansion of EHV transmission did not translate into larger growth for them. However, since the power sector grew, its positive effect on their growth was inevitable. The real expansion of the cable industry was witnessed when the policy planners thought in terms of realigning the priority of power sector reform - from a completely generation centric approach to renovating and modernising distribution. It was recognised that unless distribution is appropriately managed, not only in terms of revival of financial health, but more importantly in terms of strengthening, augmenting and modernising the distribution networks, power sector reform initiatives will be hard to take off.

Tenth Plan will be remembered as the turning point in the history of power sector reform, more importantly distribution reform, inasmuchas two powerful initiatives were launched for implementation during this Plan. The first, viz. Accelerated Power Development Reform Programme (APDRP) aimed at upgrading the distribution systems in towns and cities and the second viz. Rajiv Gandhi Grameen Vidyutikaran Yojna (RGGVY) aimed at creating a robust rural electricity distribution backbone. Both these Schemes were fully supported and financed by the Government of India. Availability of fund was not allowed to be an issue in implementation of these two Schemes.

Emphasis on improving Distribution Systems resulted in exponential expansion of the cable industry. As a matter of fact, if we look at the growth of the electrical industry, which service power utilities, during the Tenth Plan, the rate of growth could be better appreciated. During the year 2000-01, electrical industry, which is represented by IEEMA (having almost 500 Members), suffered a negative growth. Starting from 2002-03, the annual growth never looked back and improved to 7%, 12%, 16% and then beyond 20% within the five year period of Tenth Plan. Cable industry obviously had the benefit of the commensurate growth.

The trend continues. In the Eleventh Plan, both APDRP and RGGVY have been continued, in fact, with greater emphasis to complete the unfinished Agenda, though the first year of Eleventh Plan did experience some degree of delay on both these Schemes. If we take a longer time frame perspective, power sector growth over a 25 year period is targeted to follow an overall 8 to 9% rate of increase annually. This will demand massive expansion of all the industries associated with the expansion of power sector. Obviously cable industry would be a great beneficiary. If they follow business - as - usual approach, remain confined to lower voltage transmission and distribution systems and domestic wiring, they would have a normal growth as the sector grows. But, wisdom will lie in innovating new opportunities by way of their transformation into provider of cables for sub-transmission and Extra High Voltage transmission systems. This major orientational change could contribute enormously to a radically higher level of growth for cable industry.

Long term Strategic Perspective for Cable Industry

Indian power sector continues to suffer huge electricity distribution loss in the system. While a good part of the loss is attributed to factors such as poor metering and theft of power, a good part of the loss is also to be attributed to technical problems including losses in cables, conductors and other hardware in the system. One of the ways the loss could be reduced is to have underground cabling and better cable specifications. I recall, in the BSES, which I presided over as the Chairman, during 1994-2002, we had considerable advantage on account of underground cabling. We could reduce the overall loss to less than 11%.

APDRP has supported conversion of overhead distribution through conductors into underground cabling in a number of towns. There is a strong case for underground distribution systems to be implemented in all the towns. While this will be a desirable approach, a few problems which the cable industry needs to address include the method and manner of laying underground cables and also in regard to insulating the system from the problems caused during rainy season. My own experience in Mumbai indicates that in view of the old method of digging trenches, opening up roads leading to inconveniences to public, the process of cable laying quite often faces resistance from Municipal Authorities. We need to adopt new technologies for laying underground cables which will obviate the requirement of digging trenches.

While on this subject, I would also like to emphasise that manufacturers, in general, in India feel that their job ends when the product has been manufactured and connected activities like transportation, erection are the responsibilities of other agencies. While technically this might sound logical, in the interest of manufacturing sector itself it is necessary that this mindset changes. If we want that all the towns of the country should think in terms of underground cabling for electricity distribution, it would do a lot of good to the cable industry, if they package the system with the total solution approach which would include laying of cables through modern methods.

Another linked problem, which I myself experienced, during my association with BSES, is the issue of managing supply during rainy season. When the area used to get submerge with rain water, we had to cut-off supply for the fear of water electrocution. A proper solution has to be found out. Perhaps the problem lies with the quality of insulation, with the quality of jointing of cables, and with the way junction boxes are set up. Obviously the industry will not be able to articulate a convincing case for converting overhead distribution systems into underground cabling, if this problem remains unattended.

Failures of cables due to over loading lead to disruption of power supplies. The industry may feel that over loading could have been avoided by better consumer discipline. But, this would be too ideal and too good to happen in practice. We all know how our electricity consumers behave. They might think that they would have one airconditioner in the house and, therefore, their connected load will correspond to the need felt at that time. But, in practice, every summer the households keep increasing these gadgets. If the system planners do not factor in the changing behaviour, and needs of consumers and if cable manufacturers feel that the entire system could behave in a normal way, both of them would be grossly mistaken. Required redundancies need to be provided in planning and similar should be the approach in designing. Failures on account of bursting of cables must be eliminated. How this outcome is achieved would be determined by the ingenius approach of the system planner and the cable designer.

Quality of power supply is another important aspect. Lower voltage drop improves power quality. Similarly lower impedance improves power quality. Proper design, suitable material specification and required workmanship would be in a position to deliver both these desirable characteristics, leading to better power quality. Research and development and technology up-gradation are two important issues. Unfortunately Indian cable industry has not paid adequate attention. Both research and quality have taken back seat, in spite of rapid growth of the industry. Unless large players in the sector assume leadership role and take appropriate initiatives, the Indian cable industry may face even tougher competition from outside. While quality relates to work culture, better training, and a commitment to quality, R&D requires long term investments.

Standardisation not only helps in cost reduction, but also enables better maintenance. However, standardisation in general comes in conflict with ever changing needs of customers. Power industry in India has changed its profile not only quantitatively but also qualitatively. The sizes have changed, magnitudes have changed new desires for new features lead to different types of technological solutions. The paradox of changing needs and, yet, effecting right degree of standardisation needs to be resolved. There would be common areas of convergence that within a regime of technological up-gradation, standardisation will be possible. Research and development, if properly undertaken, will provide right solutions in this regard. Different aspects of research could be undertaken by major players in the industry, which could be networked and integrated.

Time has come for the Indian cable industry to prepare to occupy the space hitherto occupied by conductor industry in the area of Extra High Voltage transmission system. Massive expansion of Indian power sector is already showing up in terms of extra ordinary demands on right-of-way for laying overhead EHV transmission systems. In spite of our shift to 800 KV, and in future to even larger voltages, right of way will be a real challenge. Underground cabling in EHV field could be a good solution. However, the industry has to work hard to make it cost effective. Ultimately, it has to compete with the overhead systems. While making cost comparisons, obviously, required cost loading should be done on the right-of-way problems. Globally, it seems, good amount of work has been done for development of cables which can handle EHV requirements. There is a scope for joint venture arrangements and transfer of technology. The industry must aim at first getting into EHV area and subsequently progressively enhancing its proportion.

Fascinating future lies ahead for the Indian cable industry. Opportunities will not be wanting. How much of the growth of Indian power industry, and of industrial growth in general, Indian cable industry is able to capture, will very much depend on how innovative they become, on how they respond to research and development, to technological up-gradation, to high standards of quality, to moving towards EHV systems and lastly, but most importantly, to safety requirements. Global competition will require that they stand out on emerging technologies, in quality and compete effectively on cost.