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Analysis | July 2011

Capacitors: Innovations and concerns

Indian capacitor manufacturers have to match Chinese competition with faster production and speed to market as well as better quality, says Shylendra Kumar.

Capacitors play an important role in reducing transmission and distribution losses, boosting the voltage level, improving the power factor and releasing system capacity for adding more load for the same amount of generated power. So using capacitors can be a major incentive for utilities.

Innovations

Capacitors have evolved in India over a long time starting from paper based di-electrics to the present with all polypropylene film type capacitors in high voltage applications whereas in low voltage applications they have evolved to metallised polypropylene type capacitors. Both these types of capacitors are manufactured with state-of-art design and process technology which are at par with international standards. The Indian capacitor industry therefore has become a hub for global markets and a large amount of capacitors are now exported from India. Innovations related to most of the global products have successfully been absorbed by an organised sector within the capacitor industry. Further scope of innovations that need to be developed are mainly in the areas of process efficiency, process control, lean manufacturing, operational excellence, application technology and system design. Another area of innovation that can possibly be adapted when compared to other electrical products can be the use of polymer bushings which can further improve the reliability and robustness as compared to the porcelain bushing. While low voltage capacitors have moved to dry di-electric technology, developments are taking place in using dry technology in high voltage capacitors also. This is an area for future possible adaptation in India.

Concerns for the industry

Raw materials: While India has adopted state-of-the-art technology in capacitor manufacturing, when it comes to the basic raw materials of high voltage capacitors, which are film, foil and special impregnating oil we are dependent on imports.

The foil acting as an electrode in capacitors is 4 - 5 micron thin aluminum foil, while pp film is 9-15 micron thin film textured (hazy) on both sides and oil is a special liquid with high breakdown voltage and partial discharge (PD) with standing capacity. Fortunately, the Indian government has recognised capacitors as energy-saving devices and therefore the import duty of these materials is zero. As a result, today there is no cost disadvantage as compared to those who manufacture capacitors in the raw material source countries. However, India does have very long lead times to import these materials due to geographic distances, higher freight costs and hence there is a need to store high levels of inventory of these materials.

No Indian firms have so far made a serious attempt to start manufacturing any of these items in India even though the demand for these materials is growing by the day. It maybe because of the complex process of manufacturing and heavy investments required to manufacture these materials. In low voltage capacitors, the raw material is metallised polypropylene film (MPP). Many Indian low voltage capacitor manufacturers have their own metallised process of spraying aluminium on the base polypropylene film which is now well established. Therefore dependence on importing MPP is less, while the base film for metallisation still needs to be imported.

While there are many aluminium manufacturers in India, there is no manufacturer who has ventured into manufacturing electrical grade 4 to 5 micron thin aluminium foil. Polypropylene film was manufactured by an Indian company more than a decade ago but didn't survive for long. The Indian government can promote the manufacturing of these materials as they can save a considerable amount of foreign exchange and the cost effectiveness of these materials for Indian industry can be further improved.

Chinese competition

With respect to raw materials, China is well ahead of India in the sense that it has both polypropylene film and electrical grade capacitor aluminium foil manufacturing plants. Manufacturing plants for capacitor oil are however not present in China either. Chinese capacitors obviously will have a cost advantage on Indian capacitors due to this factor and various other reasons such as their low manufacturing cost due to high productivity and high volumes of demand. The demand for capacitors is driven both by domestic consumption and exports, both of which are quite high.

With the import duty on finished capacitors also being zero, the threat of Chinese capacitors entering the Indian market at lower costs than Indian capacitors does definitely exist. While imposing import duty on capacitors may not be the best solution in the long run, Indian capacitor manufacturers have to match this competition by faster production and speed to market as well as higher quality. Availability of good quality raw materials within the country will definitely be an added advantage.

Unorganised sector

Capacitors from the unorganised sector are available at very low price levels with below par quality. This results in huge numbers of such capacitors in the power system distribution sector and hence the high field failure rate. Due to this factor and the accepted presumption that a capacitor's life is basically low and is prone to failures, the use of capacitors itself is sometimes questioned. The fact is that capacitors, when designed and manufactured in a controlled manner, can last up to 20 - 25 years both in high voltage and low voltage applications, whereas capacitors purchased from unorganised sectors need replacement almost every year. The users of capacitors therefore need to be educated on the total working cost over a period of years rather than only the initial cost.

Conclusion

The capacitor as a product has an important role in the efficient use of power and is definitely an energy-saving device that can reduce the power generation requirement through effective utilisation of generated power and thus reduce losses. So when we speak of "green power" and "energy efficiency," capacitors play a significant role in both.

While the organised sector in the country have state-of-the-art manufacturing facilities, it will further help the industry if the key raw materials for capacitor manufacturing is available within the country. Competition from Chinese capacitors can definitely be countered by better quality and productivity.

The scope to increase domestic consumption of capacitors in Indian utilities and industries is certainly there. Through proper awareness and education about the benefits of capacitors, higher volumes of capacitor units can be generated, which in turn can make Indian capacitors more competitive in India and in global markets.

The author is Chairman, Capacitors Division, IEEMA. Views are personal.
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