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Interaction | July 2018

The industry is being redefined on an almost daily basis

The learnings imbibed by the world's largest energy techniques company in India have not only served to make it more competitive but also look at increasingly positioning the country as an important base to export manpower and manufacturing solutions. <span style="font-weight: bold;">Michael Keroulle, Chief Commercial Officer, Steam Power Systems, </span>GE says that the Atlanta-headquartered firm is working on enhancing the quality of its products made here to make them globally competitive.<br /> <br /> <span style="font-weight: bold;">GE has projected a 50 per cent increase in global demand for power over the next decade. In this scenario, where does India figure in your overall business strategy?</span><br /> India is one of the most important countries in terms of coal capacity installations. We project around 30 GW of capacity addition globally over the next ten years with new plants coming up on the coal side. Out of this, 10 GW is going to be in India, which means that a third of that capacity addition will happen here. Although it's decreased compared to the good old days when it was 30 GW but it is still a very important part of the world market. Thanks to the competitiveness that we have had to acquire in India, the country has actually become the base for us to address the rest of the world markets in terms of setting manufacturing and price targets.<br /> <br /> <span style="font-weight: bold;">How do you propose to use the country as a base to service GE's power systems universe?</span><br /> We started a turbine factory in India in 2010-11. Today, it is fully operational to serve India. However, since we have a global presence, whenever we need to support our other markets we export products from India to them. We do a number of projects here as we have a large base of qualified engineers for coal plants. For instance, we are currently engineering a plant in Cambodia that is designed in India. The market is so competitive here that we see an opportunity to export this expertise and manufacturing.<br /> <br /> <span style="font-weight: bold;">You consider India to be a highly competitive electricity market. However, over the past decade do you also see any positive improvements in terms of quality?</span><br /> The expectation and specifications that we get from companies like NTPC have always been quite strong. If you look at the redundancy requirements, they are always almost everything that one could ask for. We have never really felt that Indian customers go for cheap products. On the contrary, the plants that NTPC builds are pretty high on quality. From 2008 to 2011, we were a part of the ultra-supercritical (USC) programmes. NTPC has been quick in adopting this technology and we are happy as that's an important step in resolving the carbon footprint issue.<br /> <br /> <span style="font-weight: bold;">Customer expectations in India are not lower when compared to any other place. </span><br /> The pricing might be lower but that is because of the volume effect. The fact that there are several other leading companies in the market is played very well by the Indian customers. Therefore, though pricing is extremely aggressive expectation and reliability too are high. However, the quality of export is a different issue because there you have to compare, for example, with the quality requirements in Europe. They would be a bit higher on the specifications side and put more reserves on each piece of equipment. And we will have to do that if you want the India-made equipment to be used in those places. And that's something we are working on.<br /> <br /> <span style="font-weight: bold;">GE Power had shared its views regarding obsolescent coal-based power plants and limitations on installation of solar energy farms to the federal government's draft National Electricity Plan. What were some of your key concerns and how has the power ministry reacted to your suggestions?</span><br /> The plan was very focused on solar energy. Given the difficulty to acquire land it seemed to us that this aspect hadn't been fully considered. The other thing was on the obsolescence part. The plan hadn't considered that the number of units of 300 MW and 500 MW were nearing the end of their lifecycle. When you deploy 1 MW of solar, you also need to deploy 1 MW of alternate source of power because you need to make sure that whenever you don't have the Sun, you will have an alternate source of electricity in place. We, therefore, stated those two facts to explain that that though the analysis targets were probably good the reality of how you reached there was a little too aggressive. And you will still need some time and you will still need to renew those plots. By the way, when you replace 500 MW at 32 per cent efficiency or 200 MW at 25 per cent with the new USC 800 MW at 44 per cent, you nearly halve the CO2 emissions per kWh. It's very alluring to say that one is going to do solar only but the reality is that you cannot get there unless you have a very stable base and for that, you need to create efficiency. Maybe due to our comments, the government seems to have realised that this was something which could help extend the plants' life as well as make them more flexible. The beauty of the business like ours is that we work in each and every segment of the market. <br /> <br /> Therefore, we are into renewables, into the improvement of the installed base and into units. Whatever makes sense, we can find the right recipe for that in our toolkit.<br /> <br /> <span style="font-weight: bold;">How can digitalisation help the Indian power sector?</span><br /> It can help at several levels such as those of asset and grid. It can help at the generation level to increase flexibility and efficiency in the existing or new plants. The data exists and it is really about utilising it in a better way to make the outcome better for the overall apparatus. Efficiency implies lowering of operational costs as that could help in decreasing the electricity tariff as well as make generation companies more profitable, which, by the way, is an important concern in India. The flexibility provided by digitalisation also allows for deployment of renewable sources of energy since everything is interconnected.<br /> <br /> <span style="font-weight: bold;">This is also a period of immense transition as far as the global power scenario is concerned. At what point do you see things stabilising?</span><br /> You have tonnes of books on the early Industrial Revolution. But this phase is something that exists not just in theory but is accelerated by disruptions such as digitalisation or renewable sources of energy. In our industry, with the grids becoming smarter, this completely changes the way business is done. Customers outlook too is undergoing a shift. If you take Europe, the time of big utilities is over. With the emergence of a number of smaller companies, utilities today are more localised and reactive. Therefore, the industry is being redefined on an almost daily basis! We have big changes happening at a macroeconomic level as well since China which had invested enormously in energy in the last 15 years is now changing and transitioning to renewables. All that does create a different dynamic but doesn't change the fundamentals. As energy is the driver or the fuel for growth you need to have sustainable, reliable and affordable energy. For example, take the African continent that has 400 million people without electricity. When that population starts developing, it will need energy and will be faced with similar kind of challenges.<br /> <br /> <span style="font-weight: bold;">-&nbsp; Manish Pant</span><br />
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