Rajat Kharbanda, Senior Consultant, 6Wresearch
What has been the growth trend in demand for DG sets over the last two years and how do you see this panning out in the next two years, and why?
During FY´2013-15, the market volume of diesel gensets declined, especially after the introduction Central Pollution Control (CPCB) Norms-II in the year 2014. Further, with these norms, the prices of various diesel gensets increased by 10-15 per cent, which impacted their demand. However, in the next two years, the market is expected to recover and would register a 6 per cent year-on-year (Y-o-Y) growth on account of rising telecom infrastructures in tier-2 & -3 cities, expansion of public infrastructure, coming up of new malls, hotels and usage of diesel gensets in peak shaving applications.
Is there any impact of slowdown in the power generation sector growth because of debt-ridden discoms and entry of solar power and storage batteries on the demand for DG sets?
The impact is expected owing to all the mentioned factors, especially after initiatives taken by the government to promote the usage of cleaner fuels to generate power. Power generated from solar energy is gaining momentum in the country due to incentive schemes provided by the state governments. Storage batteries would primarily be used along with the diesel gensets to power the telecom tower in unreliable and off-grid areas.
What are the segments in which Indian DG set manufacturers are adopting global benchmarks?
The diesel genset producers have adopted CPCB-II, which is comparable to EU Stage-III-A and US-EPA-Tier-3 norms.
The players have implemented these norms for diesel gensets which are upto 1000 kVA rating and are valid for both stationary and portable diesel gensets. The regulation is still lagging in gensets which are above 1000 kVA.
What are the levels of imports of DG sets into India? How imports are affecting domestic manufacturers and why?
India imports diesel gensets or its components primarily from China, Japan and Vietnam, where components are assembled at local facilities. With rising import of diesel gensets, the market of domestic manufacturers is getting affected especially in lower power rating segment.
How Indian DG sets industry is faring in exports? What are the measures needed to boost exports, and how adoption of global standards will help?
The players in India are exporting these gensets especially to Middle-East & North Africa region; in countries such as Saudi Arabia, UAE, Iraq, Qatar, Kuwait, Oman, Egypt, Algeria, etc., cost effectiveness and supporting emission norms would spur export market as these would be more price competitive in nature and more environmental friendly.
What is the share of unorganised sector in DG set manufacturing? How does it affect adoption of global quality standards/benchmarks?
The unorganised sector is more prevalent in lower rating (<100 kVA) segment. These players do not comply much with emission standards as these are used in small applications such as residential.
What are the emerging trends in DG set technologies and what is the contribution of India in R&D of DG sets?
Bio-fuel powered gensets and gas-based gensets are gaining popularity in the global market since these utilise much cleaner fuel. Further, with improving gas pipeline infrastructure, demand for gas gensets is increasing in countries such as US, Canada, China, UK, Germany etc. The contribution of India in R&D of DG is rising in global landscape, where companies like Cummins is planning to invest `1,000 crore in India to establish its global research and development hub in Pune.