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Feature | December 2014

Pumping Up

It is estimated that the production of pumps in the country is presently of the order of Rs 1,200 crore, contributed by some one million pumps per year, produced by 500-odd manufacturers of large, medium and small scales.

The enterprise in the Indian pump industry merits appreciation for the achievements of prompt and competent indigenisation of almost every type of pump, of pumps in gigantic sizes, of pumps of a variety of constructional features and operational sophistications and of pumps in a variety of materials of construction. According to a report by Indian Pumps Manufacturers Association, the industry has over the years built up great potentials to meet challenges. It has also worked with good foresight and resilience to adapt to emerging trends, be it compliance with the requirements of the quality systems as per the ISO 9000 series of standards or the exposure to the global competition, prompted by the liberalization of the economy.

Recent trends
The government has set aside Rs 500 crore for new and renewable energy, Rs 400 crore for launching a scheme for solar power-driven agricultural pump sets and water pumping stations for energising one lakh pumps, and Rs 100 crore for the development of one-MW solar parks on the banks of canals.

´The budget has attempted to address the short-term challenges for the power sector, and at the same time laid a roadmap for more comprehensive measures over the medium to long-term as well,´ says Manish Aggarwal, India Partner and Head - Energy and Natural Resources, KPMG.

Meanwhile, it is heartening to note that there is an increased awareness and demand for energy-efficient pumps, considering that sustainability is not only the need of the hour but has always been one of India´s core values. Also, in line with the trend towards tapping renewable energy, many of the reputed pump manufacturers are committed towards the development of pumps that can operate on renewable energy supply. To this, Mahathi Parashuram, Head - Public Affairs, Grundfos Pumps India Pvt Ltd says, ´We have so far sold over 8,800 solar pumps across the country especially in rural and tribal areas where grid power is unavailable, or of poor quality and unreliable. These pumps have proven to be highly successful and have helped create a positive impact on the socio-economic lives of thousands of people.´

Tobias Engelmeier, Director and Founder at Bridge to India also agrees that solar pumps in India could be a very attractive market. They could replace diesel powered pumps in many parts of India´s agricultural heartlands, especially in the under-electrified Gangetic plains.

Quick bytes
Around 300 million Indians still have no grid power. Another 300 million have only very unreliable grid power.
Only 12,000 solar pumps were sold in 2012, indicating that the current product designs find it hard to compete.
The market for diesel pumps in India is around 2 million pumps at approximately Rs 80 billion per annum.
Meanwhile, Avinash Jain, Managing Director, Arise India Ltd, in an authored piece suggested that the Indian pumping sector has seen fair sales over the past years which are expected to hover between 10 to 14 per cent in the coming years. He further commented that currently pegged at a growth rate of 16 per cent in domestic sales, experts believe that this market will churn production anywhere between 2 million units to 3 million units in the coming years, which will increase the viability of the sector.

Current market
Across India, there are currently around 10 million diesel pumps in operation. The average lifespan of a pump is approximately five years. Older models burn diesel to directly run a ground-mounted pump. Newer, more efficient models are submersible and run on electricity from a diesel genset.

Depending on the depth of the water table, they are rated at between 1 and 10 horsepower (0.7-7 kW). Installation of a diesel pump costs anywhere between Rs 20,000-80,000. If the average price is Rs 40,000, this is Rs 80 billion market each year. If the average pump size is 3 kW, the total installed diesel pump capacity in India comes to 30 GW, equivalent to almost 1/6th of the country´s total installed power generation capacity.

Cost matters
Diesel pumps, however, have four disadvantages: their fuel is costly; they deplete the water table more than necessary by pumping heavily at short intervals; they create local pollution and carbon emissions; in addition, diesel is often a hassle to get. Solar-based pumping systems would be better on all four accounts. Yet only around 12,000 systems were installed in 2012. That is a market share of less than 1 per cent. Why is that the case? Because, explains Bridge to India: First of all, they are too expensive. This is not so much an issue of the lifetime cost, but rather with liquidity.

Diesel is expensive, but cash-outs are spread over time, as fuel has the major share of the lifetime cost. Solar has to be paid for upfront. In addition, diesel pumps are highly standardized, off-the-shelf-products.This reduces cost. Solar pumps are still at an early stage of product maturity. Secondly, diesel pumps are an established product. They have sales channels and consumer finance solutions. Many distributors and banks are still reluctant to bet on a new product like solar as long as the old one is being sold just fine.

Hydro in demand too
According to an official from KBL, there is a huge untapped potential for small hydroelectric plants in India itself which, whenever realised, will create massive demand for products such as small hydroelectric turbines (Pelton, Kaplan and Francis) and pumps which can double as turbines. Pumps are required across industries even in small hydroelectric plants for various applications like power generation, drainage and dewatering, cooling water supply and so on.

The demand for electricity varies across the day; so during excess electricity generation pumps are used to create the head by pumping water to the reservoir. Water flowing from the reservoir to the outflow generates electricity. When the direction of rotation is reversed, water is pumped to the reservoir. Such hydroelectric plants are called reversible pumped storage plants.

Drainage and dewatering pumps are also common in small hydroelectric plants, maintained in case of an emergency. Also, pumps are being used to supply cooling water for the equipment used in small hydropower plants.

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