Rangarajan Ramaswamy, Regional Business Director, Grundfos Lifelink (India & Bangladesh).
How has the market trajectory been in the last 2 years in India?
The market has been buoyant in the domestic sector with close to a million pumps sold in the different category of pumps over the last two years. However, sales in the agriculture sector has been anything but hunky-dory, relative to the humongous potential this sector offers in terms of both replacement pumps and new pumps. A tad above 8,000 pumps have gone into the replacement market, and about 0.3 million pumps have been potentially supplied for new requirements.
What has changed for the pumps segment after BEE put in norms?
Riding on the crest of success, BEE courted through its star labelling for various home appliances, its intervention in the pumps ambit through its flagship star labelling program was a welcome move for the pump industry, chiefly in the agriculture and domestic sector. Bore well submersible pumps, monobloc pumps and open well submersible pumps have been covered under this Star labelling program. While its impact has been discernible in the domestic sector, with informed and energy savvy customers in the urban and peri-urban sectors consciously seeking and investing in star labelled pumps, the agricultural sector has been sated with conventional pumps since the launch of this program. The scenario however is changing the AgDSM (Agri Demand Side Management) program that EESL (Energy Efficiency Services Ltd - under the Power Ministry) is promoting big time as it has infused life for the star rated pumps in this sector. Under this program, the existing inefficient pumps are being replaced with energy efficient star labelled pumps after conducting a baseline study, leading to significant energy savings. This program is gaining adequate traction and is here to stay.
How much has this helped the pumps segment?
The star labelling program has been an enabler for many pump companies to embrace better technologies to produce energy efficient pumps that meet the defined BEE star labelled efficiency norms. Efficiency as a bedrock of pump manufacturing became pronounced post institutionalisation of the labelling program. With better technologies and mechanisation, the time and cost to produce pumps has been optimised. Customers in the domestic sector, with an express purpose of investing in pumps that are reliable and save power - and consequently money for them, have endorsed going in for star labelled pumps as a worthy investment, and this has bolstered demand. The star labelling of the pumps are based on BIS (Bureau of Indian Standards) efficiencies for various pump capacities on top of which additional percentage efficiency bands are defined to establish the different star ratings (1-5 stars).
Compared to global standards we lag behind in terms of efficiency definition for labelled pumps. Notwithstanding this, the silver lining is that amongst the reputed pump brands, (Indian and international players) many of them have pumpsets with higher efficiencies, better metallurgy (for longer life and reliability) than the 5 star ratings, reflecting the potential that we have to come up to shoulder with global standards and maximise energy conservation.
What are the major challenges in India?
The major challenges have been predominantly in the agriculture sector, which has struggled in accepting the star rated pumps. This is primarily because of: a. Lack of incentives inducing farmers to change to star rated pumps, as the power is supplied free or highly subsidised, and embracing energy efficiency is not a compelling factor. b. In some cases, the existing pumps are of higher capacities than the sanctioned power and farmers are thus reluctant to replace it with lower pump capacities, which could reduce their water output for farming.
c. Lack of scientific baseline study (energy audits) and a credible measurement and verification protocol that will help capture data accurately and also maximise energy savings, via the AgDSM program.
d. Unreliable and poor quality of power aggravates the challenge and has insignificant impact despite usage of energy efficient pumps.
What policies can help mitigate these?
Mitigation policies or mechanisms that can be implemented include: a. Sharing a part of the cost savings with farmers, which will go a long way in fostering enthusiastic participation from them in the AgDSM program.
b. Scientific and systematic baseline study, which is essential for right sizing pumps for enhanced savings and quicker payback in AgDSM programs.
c. BEE 5 Star rating efficiencies to be redefined or new star ratings (6/7 star) to be introduced. This will encourage manufacturers to come up with higher efficiency pumps embracing new technologies to match global standards and also support in higher energy savings.
d. Compelling need for a reliable M&V for credible quantification of savings and success of the AgDSM.
e. Improvement in the reliability and quality of power at the discom level.
What impact has solar pumps had?
Solar water pumps, which were prohibitive about a decade back - as a package due to the solar module prices, is now becoming an affordable alternative from a life-cycle cost perspective, thanks to the steeply falling solar module prices. With the irregular availability of grid power - in some cases available for just three hours in a day - and with some rural communities having zero grid supply (thus dependent on diesel powered pumps), solar water pumps are the best bet. It guarantees a good six hours of water supply during the day for close to 275-300 days annually to support both water supply for the villages and for irrigation.
With MNRE advocating the use of solar powered pumps and giving 30 per cent subsidy, coupled with additional 40-60 per cent subsidies from the Agriculture & Horticulture departments in various states, the initial investment burden for farmers has been considerably low. Most farmers who have embraced solar water pumps through the MNRE/state sponsored schemes have benefited by having adequate water for irrigation, significant revenues from crop sales and faster payback on their investment.
Over 40,000 pumps have been supplied for agriculture and about 35,000 pumps (Grundfos has supplied about 25,000 pumps) have been supplied through government sponsored schemes for rural and tribal communities for water supply. The steady and stable need for solar water pumping has spurred many pump manufacturers to include stainless steel (SS) pumps and inverter grade motors into their product portfolio to meet MNRE requirements. The efficiencies of these solar water pumpsets are higher compared to conventional pumpsets, and 5 star rated efficiencies as well. The more existing pumpsets are replaced with solar powered pumps the better, as it dovetails with GoI's initiative of having 100 GW power generated through solar by 2022.
What developments has the segment seen technology-wise?
The first wave of new technology adoption came through when BEE announced the Star rated program in FY2008-09 and leading manufacturers invested to meet the new efficiency requirements. This was a shot in the arm for the demand side management programs and also helped create awareness amongst customers on investing in star labelled products. Closely following this were the MNRE guidelines for solar water pumps, which required SS bore well pumps and higher efficiencies than BEE's 5 Star ratings. This further propelled the agile and discerning pump manufacturers to include SS pumps and higher efficiency inverter grade motors in their portfolio, which necessitated investment in sheet metal technology for pump parts making.
What is your focus on R&D?
Grundfos invests about 5 per cent of its turnover in R&D, highest in the pump industry, globally. We focus on product development and innovation with a 'design to value' approach, which fundamentally looks at developing pumps and water solutions that has high efficiency, light weight, high reliability, and higher percentage of product recyclability. Sustainability is central to product design and development in Grundfos. The company serves different markets and segments from industry, commercial buildings, domestic, water supply, irrigation and wastewater. Significant efforts are focussed on the solar water pumping systems, with demand expected to grow in many developing countries, including India.
- JOCELYN FERNANDES