It is highly appreciable that the dreadful pandemic COVID – 19 has not been able to diminish the spirit of the Indian power industry, and its drive for progress in several areas continued with indomitable spirit. In fact, even within the lockdown period, the Ministry of Power issued a notice to all governments of States and Union Territories highlighting that the electrical power transmission is an essential service – so the operation, maintenance and construction works of the interstate transmission lines undertaken by the Power Grid Corporation of India Limited (PGCIL) had to continue. Considering the need for flow of uninterrupted power, it sought the co-operation of all governments to allow PGCIL to continue their works even during the countrywide lockdown phase.
Just recently on February 19, Prime Minister Narendra Modi has inaugurated Power Grid’s 320 kV 2000 MW Pugalur – Thrissur HVDC project, which is a Voltage Source Converter (VSC) based High Voltage Direct Current System, the most modern in the world and the first of its kind in India. The development is quite significant considering its capability of ensuring safe and faster transmission with reduced losses through cables. Out of 165 kms of transmission lines about 27 kms is underground and through cable. This technology will facilitate smart grid; provide greater flexibility in reactive power management and also enable integration of Renewable Energy resources. The state-of-the-art Pugalur–Thrissur High Voltage Direct Current (DC) system is the first HVDC interconnection of Kerala with National Grid and will facilitate transfer of huge quantum of power to meet the growing power demands of the state. All items of the HVDC equipment used in this project have been made in India, which proves our capability to strengthen the ‘AatmaNirbhar Bharat’ movement.
As one of the foci of this issue of Electrical India is Power Transformer, let us now have a look at that niche of the power sector. It goes without saying that when such (as seen above) big projects are happening in our country, the growth potential of this essential power sector component is quite bright at this moment. In this era of worldwide transition, when renewable energy is slowly yet steadily replacing conventional power production methods, yet another big boost to the global transformer industry is coming from that quarter.
Observations by the researchers
According to a recent study by Global Market Insights, “The market for power transformers reached an annual installation of over 6,000 units in 2020, which will rise at a 5% CAGR through 2027 owing to increasing investments toward infrastructure refurbishment. Power Transformer Market size is expected to surpass USD 24 Billion by 2027.”
According to them, the Power Transformer Industry will grow owing to increasing renewable integration coupled with growing focus toward sustainable T&D networks. Favourable government policies toward adoption of renewable sources across the power grid network followed by stringent regulations to reduce GHG emissions will augment the business landscape. Moreover, increasing refurbishment demand for existing grid structure along with rising infrastructural spending will foster the industry demand.
While peeping into the different types of transformers, notably they say, “Berry core power transformer demand is estimated to surpass USD 6 billion by 2027. Growing applicability of these transformers across large commercial installations, industrial facilities, and utility scale power plants will positively influence the product demand. Significant rise in the electricity demand across the developing economies along with integration of digital platforms for power utilities will complement the business outlook. Ongoing distribution of these units across isolated & self-sustaining power grid will fuel the technological adoption.”
Also, according to them, two winding power transformers market will exceed an annual installation of 4,000 units by 2027. Ability to provide high impedance transformation and enhanced voltage stabilization and conversion will drive the product adoption. Ease of installation along with effective efficiency of these transformers when connected to renewable powered sources will further complement the product portfolio. Ongoing technological advancements followed by increasing R&D activities to provide continuous and effective power supply across the grid network will foster the industry dynamics.
The trend in India
Looking at the Indian scenario, I find that the present government has been actively pursuing the cause of transformation to the new era of renewable power, simultaneously the work of enhancing the circuit-kilometre of transmission lines in the country is continuing – for example just a few days back PGCIL bagged the contract of two power transmission projects in Rajasthan – to help evacuation of power from the solar energy zones in Rajasthan (8.1 GW). Also, the replenishment need of the age-old transformers is all set to beget a new market full of opportunities. Thus, there is no dearth of potential for the transformer manufacturers and suppliers.
This year’s annual budget too has provisioned the InvIT model, which is a good move to boost addition of transmission capacity to match the fast growing pace of electricity generation to meet the increase in electricity demand. This will definitely give an indirect fillip to the Indian transformer manufacturers and suppliers.
Effect of the effort to revitalise the Indian DISCOMs
So far I have talked about the transmission segment, but the distribution segment too uses transformers of different types and capacities in large quantities. Although further clarification is needed, the recent budget’s focus on the need for revitalization of the DISCOMs, will fetch an indirect and additional good-luck for the Indian transformer manufacturers and suppliers. There will be an outcome and reform-linked financial package of more than Rs 3 lakh crore for DISCOM infrastructure upgrade.
Growing global opportunity for the transformer segment
Although the COVID -19 pandemic has slowed down the pace of growth, it’s not as much affected as many other business sectors or segments. A very recent forecast published by Market Research Future (MRFR), a global market research company, states that the global transformer market is highly lucrative. The company predicts that we are to witness a healthy 6.28% CAGR till 2026.
As per the company, “There are numerous factors that are propelling the transformer market size. These include the rise in centralization and industrialization, a surge in the adoption of new flexible transformers for various industrial uses, a rise in the growth of power generation and transmission technologies and microgrids, growing electricity consumption, and a growing focus on renewable electric power generation. Besides, the deployment of smart transformers and smart grids, and the replacement of existing aged power transformers are also adding to the transformer market revenue.”
From the above discussion, it is clear that the market for the transformer segment has tremendous growth potential. The segment has around 30 different categories, though all of them may not find the equal potential – the overall picture is quite rosy for the transformer segment. However, thorough modernisation of the products through adoption of the latest IT-based techniques is very essential to win in the competitive global market.
Also, as MRFR points out, India manufacturers and suppliers of transformers will have to address the existing and emerging global issues like: the scarcity of skilled labour, high cost and reliability challenges. The ground is open and well-prepared, to win the game each player has to groom to show all-round fitness.
By P. K. Chatterjee (P. K.)