India to be a game changer in global energy markets

With its energy demand set to double by 2040 and electricity demand potentially even tripling, it (India) will cement its role as a game changer in global energy markets, predicts Syed Sajjadh Ali, Managing Director – India, Electrical Sector, Eaton.

Eaton’s take on recent performance of Indian power sector
With the current installed capacity in India at 361 GW approximately, we are on the verge of becoming an energy surplus state with respect to per capita and peak demand. However, challenges in the power sector are quite evident these days and these challenges are making most of the stakeholders anxious. Major reason for this anxiety is the volatility in the sector with respect to government decisions, environmental concerns, geopolitical situation and the fast changing technology in power sector.

While there are concerns, if we look at the sector’s performance in recent months during the COVID pandemic then compared to the economy at large, which reportedly contracted by well over 20 percent in the second quarter of this year, India’s power generation market has escaped relatively unscathed. Prior to the crisis, India was already on course to meeting its generation targets, having already met 99 percent of the capacity requirements.

The proactive government interventions made during this time, especially the Rs 90,000 crore stimulus package, provided immediate relief to the distribution companies in managing and making up for the financial loss due to the reduced electricity demand. Even global energy demand fell by 3.8 percent in the first quarter of this year. The months of March and April witnessed the highest decline in demand as half of the world went into lockdown.

Of late, things are picking pace in the economy as industrial production increases to gear up for the last quarter of calendar year 2020. The decision to privatise the DISCOMs in union territories was a significant step in this direction that is expected to pave way for more positive reforms in future. Increased private sector participation in the distribution space will not only help DISCOMs deal with the growing financial stress but will also enhance the quality of services and foster healthy competition.

At the same time, capacity is on the rise, and the one segment that has tremendous room for growth is renewables. The government has certainly realised this trend, having significantly upped its investments in facilitating a transition to renewable energy generation, and the private sector has caught on rapidly.

Indian power sector in 2021
India is becoming an increasingly influential driver of trends in the global power sectors. With its energy demand set to double by 2040 and its electricity demand potentially even tripling, it will cement its role as a game changer in global energy markets.

India is ranked 6th in the world in terms of solar power generation but we have enormous unused solar potential. Further, due to advancement in semiconductor technology per unit cost of solar power declining day-by-day and making it very lucrative option for any policy maker. The country’s solar installed capacity has reached 30.709 GW as of 31 August 2019.

The government aims to add 100 GW solar power by 2022 which earlier seemed to be very optimistic but now appearing quite achievable. Seriousness of our commitment for solar power may be seen from our initiative to form International Solar Alliance, 121 countries are its member right now. In coming few months solar-based power plants will be India’s third largest source of energy.

In coming decade transportation sector in India and in the world will also see a big transformation. Soon fossil fuel based vehicles will be matter of history and battery-operated vehicles will take important place in our daily lives.

Breakthrough policy decision that will drive electrical equipment industry growth in India
With the right policy environment, India’s renewable energy sector will continue to attract international as well as domestic investment capital. The removal of tariff caps, consistent regulatory policies, and rising renewable energy targets in India have contributed to attracting investors’ interest.

In the coming years when we will have an abundance of clean energy from renewables, quality of energy will take equal importance making power distribution a serious issue. Many projects have been started for necessary infrastructure to ensure uninterrupted electricity supply to all households, industries, and commercial establishment. New technologies for smart grids and intelligent distribution networks are also being introduced at various levels of national grid. However, in distribution segment, India has a very long way to go and immense opportunities of improvement.

Smart appliances and demand response through grid interactive equipment are the opportunities for domestic industries, buildings, and municipal sectors. The net-zero concept of energy-friendly buildings, together with digital integration of buildings and implementation of building codes, will drive initiatives in the building sector.

Growth drivers for Eaton’s business in India beyond 2020
Beyond 2020 the world will be little if not vastly different and we are confident that we will drive our business to growth with our innovative and expert solutions for the power industry. Our business of power protection and power quality equipment like all other businesses is dependent on the economic pulse of the nation. All of us have faced tough times in both business and personal lives but with change being the only constant, things are gradually but surely moving upwards only. The sectors key to our business are – data center, infrastructure, industries, buildings and government and positivity of these sectors rub off on our business.

Another big wave is ‘clean energy’. The coming year will see the Govt. of India focusing on this aspect majorly by promoting and encouraging domestic manufacturing of energy storage devices (batteries). It is also expected that there would be more charging stations for EVs in cities to support the growth of electric mobility. Eaton has its plan ready for this energy transition market.

How Eaton is turning the tide in its favour despite challenges
We have a very capable and agile team of employees who work with our valued customers and have been helping them with their power management problems. With our brand promise being: “We make what matters work”, we realise the two mega trends in technology being “energy transition” and “digitalisation”. We will focus on these to transform ourselves to be an Intelligent Power Management company. This transformation will enable new operational value for our customers.

We are working on the right adjacency to add product lines, increase focus on localisation and upgrade our already renowned service capabilities to achieve customer delight. Our teams have showcased admirable resilience during the testing times of COVID disruption and have also picked up good learning which will come to stay in the new normal. Under this background I see a very clear and significant growth ahead for our company in India.

India is becoming an increasingly influential driver of trends in the global power sectors.
Syed Sajjadh Ali, Managing Director – India, Electrical Sector, Eaton