Touted as a power starved nation, India stands out on the world map for having the highest number of people living without power. A shame in itself, the subject is further muddled up in a tug-of-war between the state and Centre. While this is something that the common people are least bothered about, it does cause a dent in their socio-economic development. A strong buzzword these days, LED, if implemented pan-India, could save 100 billion units annually, which can then be utilised to light up a 28 crore strong power starved population.
Providing 24x7 electricity is a perpetual challenge and the cause of argument for many in India. It is said that every drop of water counts, and in that context, every unit of electricity saved by a consumer also counts. Yet, the reality is probably less encouraging in India!
To know the actual difficulties faced by many under the constant threat of power outage, one could talk to a student in Jangaon, a farmer in Chambal, a vegetable vendor in Mokhada or a teacher in Uttar Pradesh about its importance. But that is how the dictum goes and this is principally because as we write, there are about 28 crore people in India living without power.
Curiously, it is unclear how long this situation will last, but there seems to be a visible change. As per industry reports, there will be a structural shift in the lighting industry towards LEDs, owing to several measures taken by the government. These measures include, changing all street lights and lights in public spaces to LED lights, making LED specifications mandatory and providing free LED lamps instead of CFL bulbs to below poverty line (BPL) families.
Of the potential drivers for the segment listed above, we believe that switch over to LED for street and public lighting provides significant opportunity for the companies in this segment. Energy Efficiency Services Ltd (EESL), in its toolkit for street light energy efficiency, has projected that retrofitting conventional streetlight with LED could result in potential savings of 4,300 million kWh of energy. And, if manifested, a well-LED change could save a whopping 100 billion units of power annually, thereby saving up to Rs 43,000 crore per year. LED bulbs can also play a great role in controlling peak power demand in our country by 10,000 MW daily.
Citing cost efficient nature of LEDs, the Electric Lamp and Components Manufacturers Association (ELCOMA) projects the share of LEDs in the lighting industry to increase substantially.
Major initiatives, like changing all street lights and lights in public spaces to LED lights by the government, are expected to fuel growth of LEDs. As a result of which, the lighting industry is expected to grow at a CAGR of 22.8 per cent over FY2014-17E to Rs 25,000 crore and reach the Rs 37,000 crore mark by FY2021E. As per projections, LEDs are expected to account for ~58 per cent of the total lighting industry.
This wave of innovation is all the more noteworthy due to various aspects: return on investment (ROI), low maintenance cost, power saving and environment friendliness. Currently, conversion is being driven by the amount of usage (12-24 hour applications are most preferred), due to the immediate returns on investment. (Refer Comparison (GLS-CFL-LED) on page no. 40) Meanwhile, a slide making the rounds and dubbed as the largest energy efficiency programme in the world, is that the Union Government has launched a national programme to replace conventional streetlights with LED lights, besides distributing LED bulbs to households in 100 cities.
As per reports, it is envisaged that over a period of two years, one crore streetlights will be replaced and 20 crore LED bulbs distributed in 100 cities. This will be the biggest opportunity witnessed by the lighting industry till date.
´We feel this initiative could snowball into large scale adoption in semi-government and private institutions, including developers and industrial units,´ exclaims Narayan Kumar, Marketing Director, Keselec Schréder Pvt Ltd.
This will also give a push to the Union government´s Make in India campaign as opportunities would also be created in the critical supplier base, thereby improving supply chain efficiencies in the country. The expanding market will see new players emerging and it is expected that LED lighting will play a major role in the smart city projects that the government is pushing.
To this, VP Mahendru, Chairman, EON Electric adds, ´LED lighting industry is likely to enable massive industrialisation, creating millions of jobs in LED manufacturing plants for assembly lines and R&D activities.´
LED lighting industry is a substantial electronic industry, which in India is by-and-large dependent on
manual operations and thus not only produced from large sources within large factories. It also counts on many smaller assembly lines, towns and small and medium scale (SME) industries, which create millions of new jobs for men and women in SME industries and smaller towns.
What´s more? According to
Yoshiyuki Kato, Director - Lighting, Anchor Electricals, products such as streetlights and down lights are in demand and various companies have started LED manufacturing in India.
He suggests, ´In the years to come, LED lighting will be primarily adopted as the best lighting method, especially in the areas of general lighting, street lighting and other high-power industrial segments.´
LED-ing the way
The momentum is such that, according to a revisited Bureau of Energy Efficiency (BEE) supported project report, 269 municipal corporations have plans to install 33.65 lakh streetlights , that could be replaced at an investment of
Rs 2,500 crore. Going further, at a more pragmatic level, EESL has come away with a single tender, which is likely to replace 3.2 crore streetlights in India.
Meanwhile, leading the pack are none other than Gujarat, Maharashtra, Madhya Pradesh, Uttar Pradesh, West Bengal and Andhra Pradesh, where most of the municipal corporations are going ahead with energy service companies (ESCOs). (See box How are ESCO project structured?) Speaking exclusively with POWER TODAY, many municipal corporations and officials shared their plans of procurement.
To start with, Chandrashekhar Bawankule, Minister for Energy & New and Renewable Energy, Government of Maharashtra divulges his plans for Maharashtra. He says, ´We have already issued a draft notice to all the municipal corporations (26 municipal corporations and 226 municipal councils). The Urban Development Ministry will make it mandatory for all corporations to retrofit all streetlights into LEDs.´
Meanwhile, Bhubaneswar Municipal Corporation has been the pioneer in implementing the ESCO model as the corporation has already started saving Rs 3 crore per month. At present, according to BK Parida, City Engineer, Bhubaneswar Municipal Corporation, out of 20,000 streetlights envisaged, they have already retrofitted 9,300 with LEDs. Meanwhile, the remaining 10,700 streetlights will be completed by September 2015. More broadly, the corporation is likely to replace 40,000 streetlights with LEDs in its next stage, and is in the process of preparing a detailed project report.
In the meantime, Ashutosh Pendekar, Commissioner, Jaipur Municipal Corporation (JMC) is a busy man. The corporation has recently issued tenders replacing 2 lakh streetlights with LEDs, which according to him was not an easy job. He explains, ´To issue this tender, we have done a baseline survey of the electricity consumption, and lux level. So, now the bidder has to maintain the promised lux level, failing which a heavy fine will be imposed.´
On the other hand, JMC´s counterpart, Jodhpur Nagar Nigam is also leaving no stone unturned. VL Kandola, Executive Engineer tells this magazine that they plan to retrofit 72,000 streetlights with LED. He further pronounced that Rajasthan as a whole would replace about 3 lakh streetlights.
Next in line would be the Municipal Corporation of Ludhiana. Sharing the corporation´s plan, SP Singh, Superintendent Engineer (Tech), reveals, ´We have already begun the process of retrofitting streetlights with LEDs.
In this process, we will convert 1 lakh streetlights which will save a minimum of 50-70 per cent energy.´
Ergo, while many ULBs are going ahead with ESCO model or signing MoUs with EESL, few corporations are in the procedure of executing a pilot project. To cite an example, the Kanpur Municipal Corporation has spent about Rs 42 lakh on energy audit, which can be recovered through ESCO model. Umesh Singh, Municipal Commissioner, while sharing his detailed plan informed that at present, the corporation will retrofit 28,000 streetlights spread over two zones. Where, survey for a zone (4) is completed and other zone (2) is 75 per cent finished. Meanwhile, retrofitting of streetlight will be offered to other four zones, subject to successful implementation of the former two.
Admiringly, kudos to the Greater Visakhapatnam Municipal Corporation, which is implementing LED for streetlights in place of conventional lights, in the entire corporation along with EESL.
Let us remind all readers that the city witnessed the devastation caused by Cyclone HUDHUD on October 12, 2014. The project period is seven years and EESL has retrofitted 91,775 LED fixtures as yet, as per the concluded agreement.
´Initially GVMC spent no funds. But the amount will be reimbursed to EESL on an annuity basis for the energy savingamount achieved due to LED lights, which is estimated at 50 per cent of the energy charges paid by GVMC to APEPDCL prior to the retrofitting,´ says Pravin Kumar, Municipal Commissioner.
Interestingly, most ULBs refrain from spending towards this programme, taking ESCO route. On its part, Surat Municipal Corporation is likely to spend Rs 10 crore on procuring LED fixture to replace 10,000 streetlights. Expenditure will be incurred towards changing of poles, cables, system upgradation and LED fixtures. But, replicating other corporations, Surat too is likely to adopt ESCO model soon. MN Chaudhari, Executive Engineer, spills the beans, ´We didn´t feel the need for ESCO earlier as we are a cash rich ULB, but, the corporation´s funds are being saved through the ESCO route, and we have thus asked for tenders.´
A retro move
Taking a hint from the plans of mentioned ULBs, one can easily guess why these corporations are gung-ho about replacing streetlights with LEDs. There are obvious reasons.
Streetlighting installations normally use one of three types of high intensity discharge (HID) lamps: high pressure sodium vapor (HPSV), metal halide (MH), or mercury vapor (MV). HSPVs produce a yellowish light, have a long life, are very energy-efficient, and also have good lumen maintenance (maintain light output for a long period of time). But have poor colour rendering properties.
MH lamps are used as an alternative to HPSV in new installations as their efficiency and colour rendering is better than the HSPV. However, they have a shorter lamp life (some models below 10,000 hours) and poor lumen main¡tenance through the operational life.
The LED technology, however, offers significant energy saving potential. Long operational life of about 50,000 burning hours, less lumen depreciation, superior colour rendering, and energy consumption of the LED light source is almost 50 per cent less than that of conventional streetlights. However, it all depends on how a system is designed. A good lighting design of the street is more effective than just changing lamps.
According to Arun Gupta, MD, NTL Group, energy savings can go up to 90 per cent in case of LEDs as compared with conventional light sources.
In view of the fact, that replacement of conventional streetlights, with LED is is expected to save Government´s recurring expense of over 50 per cent on power consumption, and ensure long life of 10-15 years, as compared to 2-3 years of conventional lights, it saves the tremendous recurring cost spent on maintenance of streetlights too.
LED lighting has broken the price barriers which hitherto were prohibitively high, leading to more acceptance. Furthermore, increased procurement will also lower the cost of LED for government tenders and standalone urban local body tenders.
In an exclusive revelation, Piyush Goyal, Minister of State (IC), Power, Coal & New and Renewable Energy, Government of India told POWER TODAY that in February 2014, three months before he become minister, the point of purchase was around Rs 350 for 7 watts of LED bulb. ´Since I have become minister, we had four rounds of purchases and have moved to complete electronic tendering through e-bidding purchase. First round of purchase reduced to Rs 210, while in the second round it came to Rs 149, the third round Rs 101 and in the fourth round Rs 81.93 for a 7 watt bulb,´ he informs.
Interestingly, the minister also shared a brief study on Delhi, where he studied the pattern of electricity consumption and observed that around 26 lakh consumers out of 40 lakh, consume an average of 90 units per month. ´In that 90 unit can you imagine the colossal impact an incandescent bulb can have. All we can try is to provide a reasonably valued LEDs!´ he exclaimed.
Consider this: If you use a CFL bulb for 10 hours a day, it will cost you around Rs 26 per month, whereas an LED bulb used for 10 hours a day for a month, costs just Rs 12.
Historically, in the last three years, the cost of LED fixtures has come down by 50 per cent. And the reason is economic of scale, which has helped this market outnumber other conventional usage of energy fixtures. Naveen Saxena, Country Head, Opple Lighting India highlights, ´With R&D taking place globally, India is receiving globally recognised technology at a cost effective rate.
That said, another factor that has brought down the cost of LED is the use of domestic content rather than relying on imports.´ Harish Lalchandani, President & CEO, GE Lighting, says ´The most interesting fact about LED is its lower maintenance as compared to bulb or CFL. In fact, it will arrest unwanted expenditure on bulb and CFL by ULBs.´
To some extent, the PMs ´Prakash Path´ has helped LED manufacturers improve their margins. A case in point would be Surya Roshni and Bajaj Electricals. Currently, LED revenues for Surya for FY2015 are estimated to be at Rs 100 crore. The management is upbeat about the prospects and expects LEDs to contribute 30 per cent to the company´s lighting business´ turnover in the next two to three years, while targeting revenue of Rs 500 crore from the segment.
According to Raju Bista, MD, Surya Roshni Limited, ´The DELP program is really a great opportunity for Indian LED manufacturers. The EESL tenders for Puducherry, Andhra Pradesh, Tripura, Rajasthan, UP, Maharastra, HP and Delhi involving approximately 72 million LED lamps are testimony towards this and benefited Indian manufacturers as well as the consumers. Further such tenders are in pipeline and Surya has already bagged 2 tenders worth 86 million 7W LED lamps worth Rs 65 crore.´
´We believe that there is a great opportunity for Surya Roshni in the fast growing LED market owing to shift in preference towards cost efficient lighting solutions,´ adds Milan Desai, Sr Analyst, Angel Broking.
In case of Bajaj Electricals, the management is very bullish on the LED lighting business where they won orders worth Rs 41 crore last month and also received orders worth Rs 80 crore for luminaires. According to the management, LED would be contributing 80 per cent to Bajaj Electricals´ lighting and luminaries´ business revenue.
Meanwhile, NTL Group generated a revenue of around Rs 20 crore last year from the Domestic Efficient Lighting Program (DELP) Scheme by the government. Whereas, Keselec Schréder Pvt Ltd´s present share of LED in their revenue is around 60 per cent, which is likely to become 100 per cent by the end of next year.
a) LEDs with higher efficiency are commercially available to be used in different products.
b) New and innovative heat sinks, which can dissipate more heat from a compact surface area, are being designed by manufacturers.
c) Plastic housing in place of metals is increasingly being used by the manufacturers in retrofit lamps.
d) The newest innovation in the sector (SENSORS) - Additional reductions in power consumption can be achieved by incorporating sensors in the lighting systems.
e) Mood lighting - Allows you to create multiple moods during set times of the day. LEDs can produce different colours which are very important, especially for the hospitality sector where ambiance is critical.
LED lighting technology is gaining momentum in India as the Government is taking all possible steps to ensure its adoption. The streetlight sector has seen major movement in this space. The other sectors are commercial spaces, retail and hospitality. Currently, the conversion is driven by the amount of usage (24 hour applications are most preferred). Today, in general lighting, the percentage of home buyers for LEDs is still low due to high costs, but this is changing rapidly and according to a report by McKinsey 70 per cent of lighting will become LED-based by 2020.
The total market size of lighting fixtures in India, including all segments, is Rs 13,000 crore. The total LED market is approximately Rs 3,000 crore, out of which, the residential LED market is pegged at Rs 2,258 crore as of today. Going ahead, it is expected to reach Rs 6,750 crore in 2017. At present, it is showing a steady growth of 14 per cent CAGR in conventional type lighting and approximately 40-45 per cent CAGR in LED luminaires. The demand is likely increase majorly in outdoor lighting. The consumer segment is also beginning to gain momentum, and consumers in general are being made aware of the benefits that can be accrued through adoption of this technology. Increased focus of the government in providing sustainable lighting solutions, especially in the lamp category, will further fuel the adoption of LEDs at the grassroot level. Additionally, the industry is witnessing great demand in commercial projects and offices, which is further expected to touch a pinnacle in the coming days. Considering the fact that an estimated 300 million plus people in India are yet to be connected to the grid and demand for power is anticipated to double by 2020, LED market anticipates a fast growth curve.
LED lighting, unlike conventional
lighting, is a complete electronic product. A key challenge that thus remains is the lack of a healthy electricity distribution infrastructure. This leads to erratic power conditions including over voltages, surges that are detrimental to the life of the electronic driver and the LED engine. Lack of education among users also poses challenges in the usage of the product and aids penetration of technologically poor options.
POWER TODAY lists out some of the issues that can be solved by the government:
Lack of awareness - A large population in India is still unaware about the benefits of LEDs.
Presence of sub-standard Chinese products.
Lack of technical guidelines to standardise the norms.
Cost of manufacturing is still high as volumes is not there, hence prices for the consumer is still high.
Government subsidies are causing huge issues: with lower costing, there are often razor thin margins and not enough to put back into organic growth of organisations.
At the end, the government is boosting the LED business with lots of incentive schemes, spreading awareness so that ordinary people can be more amenable to LED technology.
´The efforts and encouragement of Ministry of Power and EESL, for street lighting through LED fixtures is in the right direction,´ says Gulshan Aghi, CEO, Trilux India Pvt Ltd.
Besides, the Prime Minister has initiated a scheme for LED bulb distribution under domestic efficient lighting. He has called for setting district level goals, and to prioritise this scheme in all towns with population above 100,000.
The lighting industry in totality is entering a really exciting stage. The marketplace in the coming years will be highly volatile due to new innovations at a quick rate. Every player needs to closely look at the developing scenario and create a real conscious decision if the future diversification of product scope in new categories makes sense or not and which categories they need to concentrate on.
How are ESCO projects structured
An ESCO is ´a company that provides energy-efficiency related and other value-added services and for which performance contracting is a core part of its business.´ Simply put, the ESCO enters into a performance contract with a client (ULBs), guaranteeing a certain amount of energy saving, which will pay back for the project cost and ESCO service.
Two types of contractual arrangements - shared savings and guaranteed savings û are used in structuring ESCO projects, based on the allocation of performance and financial risk between the ESCO and the client.
Under a shared savings model, the ESCO assumes both the performance and financial risk (including the underlying customer credit risk) of the project, with the ESCO financing the project as well as guaranteeing savings in the energy bill, a share of which is paid to the ESCO by the client. Thus, the revenue savings are shared between the ESCO and the client in an agreed proportion.
Under the guaranteed saving model, the client finances the project in return for assuring energy savings, and a guarantee from the ESCO that the project´s energy savings will cover project costs, including debt service. ESCOs charge a fee paid against performance based milestones. Since the client finances the project, the savings are usually fully retained by the client.
Both models are in practice in India. But since the shared savings model involves the ESCO putting in the capital upfront, smaller ESCOs may not have sufficient capital to undertake many projects simultaneously. Since the financing costs have to be recovered from the project, the ESCO ends up requiring a higher share of savings. For a cash strapped ULB, the shared savings model would be appealing.
The guaranteed saving model may be possible if grants are available to ULBs. BEE has been exploring hybrid models that look at ULBs making some financial contribution to the project, which can help the smaller ESCOs and at the same time reduce the project timeframe, which will help the ULBs to realise the full savings sooner.
Curious case of Nashik Municipal Corporation
Unlike most ULBs which had a successful experience to share, Nashik Municipal Corporation was royally ditched by Hyderabad-based private player, MIC. Around 69,541 streetlights across six divisions of the municipal corporation were to be replaced with new LED lights and fitted by the private company on Build, Operate and Transfer (BOT) basis. The contract, awarded in 2013 to carry out the work at an estimated cost of Rs 131.54 crore, is yet to begin, making it an ideal example of failure.
Sharing his grief, Gurmeet Bagga, Deputy Mayor, was visibly angered. ´The decision of purchasing LED lights through a tender had not been adopted by the General Body Meeting (GBM) of the NMC, which is a violation of law. The contract awarded to the private company for procurement and installation of LED streetlights is illegal and it should be cancelled.´ He moves on, ´This tender, which is illegal in the first place, suggests that even if the player failed to save energy, the municipal corporation would pay a total of Rs 25 crore per year. This is not justifiable.´ When contacted, the company refused to speak on the issue.
Govt to procure 50 million LEDs in single tender
Meanwhile, there is good news for all LED manufacturers. After the government closed the world´s single-largest tender to procure 50 million LED bulbs, the price of a single LED bulb has come down to one-fourth, or Rs 77 on an average, since January last year when the first tender was finalised by EESL. LED bulbs worth Rs 385 crore will be supplied by companies such as Philips, Osram, Bajaj Electricals and Crompton Greaves. The bulbs will be sold to households in various states through power distribution companies. EESL is the nodal agency for the procurement and distribution and it has so far procured 25 million bulbs.
Andhra Pradesh, Rajasthan, Uttar Pradesh and Delhi power distribution firms will be the first to sell LED at lower rates. A government official said Maharashtra, Madhya Pradesh and Himachal Pradesh will also start schemes to distribute LED bulbs soon.
“We are targetting Rs.300 crore in the next two years”
-Arun Gupta, MD, NTL Group
There will be a structural shift in the lighting industry towards LEDs. What opportunities do you sense through this shift?
LED technology is old, but LEDs as lighting solutions has just begun to collect momentum. The LED lighting industry is in evolution stage, and is expected to reach its peak in around 10 years time.
The lighting industry is expecting a healthy growth in the year 2015-16, backed by the government becoming active on policy reforms and governance. The focus on energy efficiency by the Government and work being done by EESL, are all directing a growth driven sector.
The opportunities are manifold. The focus on energy efficiency in the domestic sector will contribute to a better adoption by consumers at large and the trend will hopefully continue. Another facet of this is energy efficiency in public places, which are being addressed by the LED streetlights, which starting to be viewed as an energy efficient option to the high masts and sodium vapor lamps in use, today.
The current value of the LED lighting market in India is Rs 3,000 crore, we are expecting it to reach Rs 6,750 crore in 2017 and Rs 16,000 crore in 2020. The industry is likely to grow at a CAGR of 50 per cent in the next five years.
Are you participating in government bidding for LED lighting? Can you provide some details?
Yes, we are taking part in the government bidding process. Regions and the number of lamps that we have supplied under the EESL bidding process for LED lamps are:
Guntur and Anantpur: 4 lakh and 2 lakh LED lamps, respectively, and west Godavari and Srikakulum: 12.9 lakh LED lamps. Likewise, we have obtained order to supply LED lamps to the states of Delhi, UP, Rajasthan and Maharashtra.
We are targeting a revenue of Rs 300 crore from our LED business in the next two years.
What focus does the company put on R&D for LEDs?
In LED sector, we have to deal with institutional buyers who demand changes, tweaking and ´different´ products. Thus, innovation is the most sought after here, and today´s buyer is going to see beyond the ordinary and at ´exclusives´ in the lighting sector. Today, we have a 75 people strong R&D team in place at Noida, and are projected to add more people to the team this year. Meanwhile, approximately 55-60 per cent of LED product components are produced in India.
Are you planning to launch more LED products this year and do you have plans to diversify into other segments as well?
As NTL Lemnis we do not have plans to diversify in other business lines as of now. We need to focus on the lighting business as the sheer size of the market is mind-boggling. In the succeeding five years, we aim to be among the top 5 LED companies in India.
What products do you manufacture? What is your manufacturing capacity and its usage?
We are already producing over 250 types of products, targeted at all categories - home lighting, industrial lighting, professional lighting, street lighting, etc. The product portfolio for LEDs is likely to increase by leaps and bounds over the next few years and we are hopeful that we will be able to meet the LED lighting requirements of any institutional and retail buyers over the next few years.
The company has already laid out plans to expand capacity of LED lights to 5 million units per month within 2015, from the current 1.5 million. Today, capacity utilised is at 80-90 per cent of the total.
“We are focusing on infrastructure and commercial projects”
Gulshan Aghi, CEO, Trilux India Pvt Ltd
What are potential drivers that will boost the adoption of LED lighting in the coming years?
LED is an evolving technology and will find its own space on account of energy efficiency, long life and overall cost effectiveness.
What is the present market size for LED lighting in India and what kind of opportunities are expected in the next two years?
The current size of the LED lighting market in India is about Rs 2,800 crore, which is expected to grow at 43 per cent over the next two years, Trilux is planning to manufacture more energy efficient LED lighting products with innovative ideas and with expertise of lighting specialists. We will come out with lighting solutions that meet a wide range of customer requirements.
The focus as of now is on corporate offices, IT/ITES, SEZ, infrastructure projects and outdoor/landscape projects.
Can you elaborate on the kind of government projects Trilux has participated in till now?
Trilux is known for innovation. We have recently executed a number of very important and high visibility government projects for which we may not be able to disclose names due to confidentiality.
We have executed green building projects for the Ministry of Environment and Forest through CPWD with LPD of 0.33 W per sq.ft. We have done ECBC compliance building, which has green building certification with LEED´s for Ministry of External Affairs. As it is a price sensitive and competitive market, pricing is always a challenge to compete and win the tenders.
How is Trilux going to tap the Indian LED market? What is your key focus areas in R&D?
We are in the process of developing products as per the requirement of the Indian market (cost effective yet efficient, and as reliable as German quality) catering to office, residence, street lighting, industrial, etc. All our new product development and R&D activities are for LED-based products, and we are launching very innovative and highly energy efficient LED luminaires. This will be an on-going process.
Please comment on the new LED product line by Trilux.
Do you see yourself diversifying into the LED product range considering the growing demand in the market?
At Trilux, we are in the process of developing innovative products and have launched a series of products under the lateral category, namely Lateralo Line, Lateralo Plus and Lateralo Ring.
Due to their durability and low energy consumption, LEDs are popular illuminants. Depending on the field of application, the demands of lighting vary. For different uses, Trilux has analysed the energy consumption, maintenance, life cycle cost, design as well as sustainability, and shows where, from the present point of view, LEDs really make sense.
“PSUs are more transparent in tendering process”
- Jitendra Guha, CEO, NEEV Energy
What opportunities are expected in the next two years? What new projects will Neev Energy target during the period?
The market size of the Indian LED industry will reach Rs 21,600 crore by 2020, consti¡tuting 60 per cent of the total segment. This milestone will be achieved by the government´s renovated proposal to use LEDs for all street and public lamps.
Neev Energy presently focuses on projects like-
1)Replacement lighting of petrol pump outlets and new lighting system in upcoming petrol pumps.
2)High mask lighting - a product where 400 watts of LED lighting will replace the current 1,000 watt lighting system in airports, ports and high traffic municipal areas. 3)Industrial lighting, well glass lighting for power plants
4)Automation products - hardware and software controls (in association with a US-based company)
5)Explosion/flame proof lighting: offshore, chemical plants, refineries, food processing units
Elaborate on the government projects Neev has participated in till now?
In the past two years, we worked on 10-15 public sector undertakings and are also working on various PSU projects. These have their own challenges, i.e. their size and long documen¡tation process, which is getting more transparent.
How Neev is preparing to tap the LED market in India? What are the key focus areas in the R&D front?
Our passion, experience and investments in R&D have culminated in strong design capabilities and distinctive exterior structural design sense. We combine our expertise along with the vision to deliver highly customised products to consumers, offering the greatest energy and cost savings. Our extensive manufacturing, implementation and service infrastructure in India has pioneered numerous cutting edge products. We are expanding and tapping the Indian market by fulfilling our client´s requirement.
Comment on Neev´s new LED product line. Do you see yourself diversifying into the LED product range?
Yes of course, our products are unique in terms of technology and pricing point. Considering the demand of LED lighting, particularly in the industrial sector will catalyse our production capacity. We believe our in-house product lines, including replacement lighting (fuel stations), high mask lighting and explosion proof lighting will see major demand in coming days.
“We have already installed over 1 lakh LED streetlights”
- Narayan Kumar, Marketing Director, Keselec Schréder Pvt Ltd
What will be the estimated turnover of the lighting industry pan-India in 2020?
The estimated turnover of the lighting industry by 2020 would be Rs 36,000 crore. More than 60 per cent of this would be from LED segment.
What are the potential drivers for LED lighting in the future?
Key drivers would go along technological advancement in the LED space, leading to increased efficiency, coupled with falling prices due to large scale adoption. This, in effect leads to huge savings in energy costs, while improving the overall quality of the installation. Government initiatives to encourage LED usage as energy-efficient technology will also remain the key demand side driver.
What products do you manufacture? What is capacity and usage?
We manufacture a full range of LED streetlights, post tops and other products for special applications like tunnel lighting, etc. Located in Faridabad, the plant supplies products in India and to other group companies.
Are you taking part in govern¡ment bids for LED lighting?
Keselec Schréder is keenly participating in government tenders and has already installed over 1 lakh LED street lights and has also commissioned two tele-management projects in the country. We are likewise working with government institutions to arrive at mechanisms that ensure best lighting products that only last the test of fourth dimension and provide correct lighting for facilities.
What focus does the company put on R&D for LEDs?
Schreder manufacturers complete luminaires along with ignition control schemes. The company spends six per cent of its turnover on R&D. Leading lights are manufactured considering the extreme climatic conditions prevailing in India. Schreder has successfully brought into markets products which can even perform at temperatures of 50 degree C.
How much components are procured from India and how much is imported?
For LED´s products manufactured at the Indian facility are sourced locally. These products form a part of the major revenue of the company.
Are you planning to launch more LED products this year?
Yes, we are planning to bring out new LED products with the correct characteristics and cost. The company will continue to strengthen its position in the outdoor space.
What business and marketing schemes do you apply to keep ahead of competitors?
At Keselec Schreder, we stick with the ´Outside In´ approach, wherein it is of utmost importance to redeem what the marketplace and our customers want. It all boils down to forking over a good lighting solution at the correct cost. To facilitate the above, we have regular interactive sessions with our clients through seminars, educational workshops, etc. The two way communication process helps us pull ahead a lot and also foster a winning alliance with our clients.
“LED will provide ample employment generation opportunities”
- Naveen Saxena, Country Head, Opple Lighting India
Many municipal corporations will be converting streetlights into LED. How are you taking this huge opportunity forward?
We are in the process of creating a whole infrastructure and team since we are a relatively new participant in the field of LED. But yes, that is definitely a vast marketplace. What we are looking to provide is a robust solution to these municipal corporations.
Crucially, we throw a good brand presence in 22 cities, where our channel partners have begun working with local authorities. Thus we are presently in preliminary stages and over a period of time will gradually elevate into the ULB section.
Can you give us a guideline on margin improvements that you are looking at in this fiscal?
As remarked, since we are a new player, giving guideline for the current fiscal is not viable. Simply, we are aiming for Rs 450 crore turnover in the next five years. At present we have orders from a Chennai-based company which wants to convert their entire R&D centre into LED lighting. Besides this, we have also received orders for a commercial establishment. So our order book is picking up.
With ample opportunities in this industry, do you see robust employment generation opportunities too?
If you look at the level of lighting and standards globally as against India, we still have room for improvement. So there is definitely going to be need for lighting installers, designers, planners and energy auditors.
In fact, this industry will open lots of doors for youngsters. Crucially, lightning will become a specialised domain requiring various levels of profiles to fill.
LED´s contribution will amount to 58 per cent of the lighting industry. Do you agree?
The reason I agree with this is because, the ticket size is much higher of LED than any other conventional energy fixture. So, when the value ticket goes up, automatically the value of the industry will increase. Another point I would like to mention here is that, LED offers dynamic possibilities in terms of pattern, design and technology. We expect consumers to start changing their conventional lights at their homes.
Have the recently set up schemes for LEDs boosted the business and by what margin?
Initiatives are being taken by the GoI are commendable in terms of creating awareness and making LED available for the common man. It will certainly go on to help the industry grow and make it much more competitive.
More so, the government can always look after a duty structure which is much lower which will help local industries flourish. Duty structure such as value added tax on LED is still high. VAT ranges from 5-14.5 per cent, depending on each state, which makes LED products expensive. If this reduces, products will be much cheaper than their present pricing.
“We shall produce and market over Rs.1,000 crore worth of LED lights”
- VP Mahendru, Chairman, EON Electric Ltd
Are you taking part in government bidding for LED lighting? Provide some details.
Yes, we are bidding in government tenders and have succeeded in securing a government contract for the supply and installation of 13,000 streetlights which have automatic controls putting the lights ON and OFF in the evening and morning. It possesses the singular benefit of adding all information of town operation on a computer so that power being consumed and power being made unnecessary as a consequence of these LED lights can be readily assessed and recorded 24x7. It also promptly highlights if any specific LED light has given out, damaged or pilfered so that automatic alarm goes to the maintenance team, who cast the light in operation or replace it, if necessary, within 24 hours of reception of such alarm.
How could retrofitting conventional streetlight with LED potentially save energy?
LED streetlights are individual sources of light and can conveniently be put together to replace old and conventional streetlights and thus improve the quality of life, ensure longer life of LED lights and save power many times compared to conventional lights.
How much has demand for LED increased in the last two years? What is your target for the period?
For each of the last 3-4 years, the demand for LED lights has been increasing at nearly 45û50 per cent every year. Therefore, the demand for LED lights has grown by at least 100 per cent in two years and this tendency of growth will extend. We think that within next two years, EON shall produce and market over Rs 1,000 crore worth of LED lights and products.
We also believe that by 2020, total lighting will be worth over Rs 40,000 crore, 90 per cent of which will be LED.
What share of components is procured from India and how much is imported?
With the monumental increase of electronic component manufacturing facilities in India, we now have to import hardly 10 per cent of LED components like LED chips. Remainder of the ingredients is all now available indigenously.
What marketing schemes do you apply to keep ahead of competitors?
There are two major sources of lighting business in India. One is government, which provides services such as streetlights and monument lights; while the other is by private individuals for lighting up the exterior of their houses or gardens.
These may be through LED bulbs or LED tubes. Smaller lights are likewise applied in all homes for kitchens, baths and staircases etc. As a matter of strategy, we are always constantly getting these new LED lights, which guarantees more comfort, joy, convenience, safety and security to our customers who can delight in dim illumination, promising light, whatsoever they may prefer most in accordance with the fourth dimension of the day or their mood.
How do you contribute to producing LED product manufacturing ecosystem in India?
The manufacture and development of LED lights have been a great system to naturalize the ecosystem. Because of the high efficiency of LED lights there is a substantially scaled down consumption of power. This ensures reduced pollution created by burning of coal, petrol or diesel oil for the generation of power. Therefore, with the fast growing usage of LED lights, the usage of power is also conserved, thereby reducing contamination.
“India is a price-sensitive market”
- Yoshiyuki Kato, Director - Lighting, Anchor Electricals
How much has the demand for LED lights increased in the last two years?
In 2011-12 LED lighting market was pegged at Rs 300 crore. Growing annually at a CAGR of approximately 40-45 per cent, today´s LED lighting market size is around Rs 3,000 crore. Panasonic LED brings advanced lighting technologies in the market while the recently launched schemes cater more to the end user. We have a product basket that caters to the needs of residential, retail, hospitality and commercial segments primarily in decorative as well as indirect lighting through LED.
Anchor intends to be recognised as one of the top three brands in LED lighting by 2018, when Panasonic Corporation completes its foundation centenary.
What business and marketing strategies do you follow to keep ahead of the competition?
India is a price-sensitive market. However, we are customising Panasonic LED and its product range in terms of the voltage and surge voltage for the Indian market and introducing products suiting the requirements of assorted spaces, across all price-points. While we have a best-buy range for retail that sells products, delivering optimum value for money, we also have high-end architectural LED as well as professional LED luminaires that are considered best in terms of peer differentia¡tion and quality of light.
How happy are you with the government initiatives?
The Government is extending extensive support and has taken initiatives to promote LED lighting as India grapples with power crisis. The Make in India and energy saving initiatives can foster the industry further. It is also ensuring that policies are put in place so that India does not become a dumping ground for low quality or cheaper products imported from overseas.
What challenges do you face while doing business in India?
Lack of awareness when it comes to selecting LED light sources is one of our basic concerns. The LED market is flooded with imported Chinese products, being sold at throwaway prices.
We need to have stringent norms in terms of energy-efficiency as well as manufacturing. The manufacturing cost is high, sales are low, making the price for the consumer high when it comes to standard products in India and hence the traditional lamps are being substituted with cheap Chinese products.
Panasonic´s expertise in developing LED is comprehensive. Quality and reliability are two standpoints of our entire LED range. It ensures that the drivers used in our LED´s are of high quality and adhere and exceed the industry norms.
Using, high efficiency, safety certifications (IEC, UL, CSA, CE, ENEC, PSE, SELV) as well as RoHS compliance, gives our products a distinct edge over the competition.
What focus does the company put on R&D for LEDs?
Panasonic is the world´s third largest lighting company. Anchor does not manufacture LED products in India and sources them from Panasonic facilities spread across the globe. Panasonic´s lighting engineers have developed an analytic system that moves beyond simple lighting design to quantify the psychological and physiological effects of lighting on the occupants in a room. This enables Panasonic to measure both perceived brightness and perceived comfort, creating a more efficient and enjoyable lighting arrangement. ´Feu´ is a Panasonic unique index developed from the collaboration of the company with Ritsumeikan University. Despite being a Panasonic unique index, its theory has a scientific base and has been presented by the Illuminating Engineering Institute of Japan. It optimizes lighting design and contributes to further energy saving with a scientific base.
How do you contribute to developing the LED product manufacturing ecosystem in India?
As of right now, we will not be manufacturing LED immediately. We will, however, expose the Indian market for advanced lighting technologies which have been Panasonic´s niche in the lighting business. As of now our contribution will be limited to marketing technologies and light measurement indexes like ´FEU´. Depending on the market momentum and standardization of product quality standards, we may consider manufacturing LED products in India in the near future.
“The volume requirement for LEDs has gone up significantly”
- Harish Lalchandani, President & CEO, GE Lighting
Can you elaborate on the kind of government projects that GE has participated in till now?
The largest LED adoption projects taken up by the govern¡ment are in roadways and GE has won projects in Maharashtra, Bihar, Haryana and Gujarat. We have also undertaken lighting projects in government stadiums.
Infact, 50-60 per cent of the stadium projects in the country come to us. We have illuminated stadiums that hosted football matches of Indian Super League in Mumbai, Delhi, Chennai, Guwahati and Goa.
GoI is ensuring ease in systems and processes. The tendering process is very clear, including terms and conditions. Also, projects are huge in terms of volumes thus offering a business case for all industry players leading to significant reduction in prices.
This phenomenon has put pressure on R&D teams to give excellent products at a cheaper cost. I see it as an opportunity for us to offer super-value products to the consumers.
Share your thoughts reduction in cost in government tenders.
Indeed. Look at the volumes that the central government is eyeing right now. In most of the recent tenders that GoI has come out with, the requirement (volumes) for LED has gone up significantly. Earlier, the requirement was for mere 5,000-10,000 LED streetlights, which has now gone up to 300,000. It´s a quantum jump as far as requirement is concerned, which has helped ESCOs ramp up their production in line with demand.
Which areas would GE like to focus on?
We are at present focusing on the four areas of office space, roadways, signage and industrial, which importantly, all have the scope for retrofitting as well as new fixtures.
In case of office space, we will be targeting IT companies as they are in the expansion mode. Most IT companies that we are associated with are expanding their office base in other cities, hence providing us with a good opportunity for new fixtures. Meanwhile, they are also converting their conventional lighting sources to LED. In fact, this is a good opportunity for other players also to grab.
In roadways, many road projects have been awarded recently, which will require a significant number of streetlights to be fixed with LEDs.
Another important vertical that we are focusing on is signage space. Here we are targeting outdoor media management companies which have been traditionally used tube lights, but are now making a shift, converting those into LEDs.
And lastly, the industrial segment where we are eyeing new industrial areas as well as the established ones.
It seems, retrofitting and new fixture for streetlights is gaining momentum these days...
Absolutely! There seems to be a huge opportunity, especially in roadway lighting. The government is likely to procure around 30 million (3 crore) LEDs only for streetlights in the next five to seven years. Don´t you think it´s a huge opportunity on a platter? One may ask why the government wants to entirely retrofit streetlights with LED and the answer is lights give a sense of safety. And, if it´s LED, then in the periphery, it covers terms of area is significant as compared to a conventional bulb or CFL. At present, EESL is a major buyer. They will be procuring LEDs on behalf of municipal corporations in India and at present have come out with tenders in Rajasthan, Delhi and Puducherry. Moreover, municipal corporations through ESCO model are also putting LED fixtures in their city limits. Meanwhile, we have witnessed an increase in awareness in states like Bihar and Manipur which are likely to come up with mainly in streetlight retrofitting.
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