While the smart meter initiative will pull the growth rate of meters to double digits in the coming years, the capacitor market is expected to remain in the sub-five per cent levels.
Capacitors and meters are two important and intelligent parts of a power supply system. While the former regulates/stabilises the output supply, the latter measures consumption. Both these equipments have wider applications in power supply. Capacitors is one of the key elements that help one in energy management starting from generation through transmission till distribution. Meters on the other hand has evolved from analog to digital, to the present day smart meters, enabled with features such as two-way communication properties.
There is an array of products available for different types of application in case of capacitors -low and medium voltage shunt power capacitors, medium voltage series capacitors, surge capacitors, energy capacitors, capacitors for appliances, harmonic filters, static VAR compensators etc. As the country has started migrating to the HVDC (high voltage direct current) lines instead of AC lines for transmission, the demand for capacitors have gone up. The logic behind using HVDC lines is that it brings down transmission losses to the minimal level. Static Var Compensators (SVC) help in voltage management. Renewable energy (RE) growth in the country has made SVC systems more popular as output from wind and solar are intermitten.
Says PK Ranade, Chairman and Managing Director, Advance Metering Technology Limited, ´the primary application of domestic capacitors in India has traditionally been single phase motors, particularly in domestic fans where they are used as a starting capacitor. With the advent of new energy efficient fans based on BLDC (Brush Less DC) motors and electronic drives, this application is destined to see a sharp decline in the next one-two years. Similarly, other traditional applications of single phase motors where domestic capacitors are used such as air conditioners and coolers are also moving towards BLDC motors. It is imminent that pumps and other single phase motors will follow suit in adopting the more energy efficient BLDC or similar configuration. However, it is unlikely that this particular market will gain traction unless newer applications are found.´
According to a report published by TechSci Research, ´the country´s electrical capacitor market is projected to grow at a CAGR of around 3.6 per cent during 2014-19, and the major demand is seen coming from consumer durables, IT hardware, industrial and infrastructure, and automotive sectors. Electrolytic and ceramic electrical capacitors are projected to contribute a lion´s share in overall market revenues during the forecast period. Adoption of other capacitors such as polymer and hybrid capacitors, solid double layer capacitors (super capacitors) and multi-layer ceramic capacitors would also increase by 2019.´
Power sector experts are of the opinion that the demand for super capacitors will grow steadily in the consumer electronics and energy and utility sectors. Introduction of smart grids and RE in a bigger way would trigger the demand further.
According Transparency Market Research, the global super capacitor market is expected to register a CAGR of 22.3 per cent from 2015-23, with a market size of $7.37 billion. This is due to the efforts taken by various governments to curtail CO2 emissions. Several countries are encouraging energy generation from renewables, and with the ´store and use´ concept the demand for super capacitors may go up.
Capacitor Technology standards
Players are of the opinion that the standards of domestically produced capacitors are not on par with international products. GB Ravichandra, Director - Network Connectivity, Schneider Electric India feels, ´The industry is well developed globally, so if local companies don´t keep their eyes on innovation, focus on trends and changing customer expectation, it will be tough for them to take on the competition.´
However, Ranade sounded positive when he pointed out, ´The domestic capacitors product range has now reached a level of maturity in terms of technology worldwide and there appears to have been only incremental improvements in terms of the basic construction for this particular application. With time, newer and more upgraded materials and processes have been adopted by the Indian industry that have kept them relatively at par with global developments. That being said, there has been a massive change in the landscape of capacitors for other uses and applications. This is particularly true in case of super capacitors where the pace of development and innovation has been massive. In this area, India has been sorely lacking and needs a lot of focus.´
He also added that a major handicap for Indian manufacturers is lack of fundamental research by Indian companies and institutions, which prevents them from pushing the envelope for better product development. This in turn limits the introduction of newer applications and better value for end customers.
Ravichandra add, ´While there is a huge capacity in the whole industry, the demand is very low. There is a price cut due to the demand-supply gap. Majority of capacitor manufacturers import large amount of raw materials. The global prices keep changing and duties on import put together affects profitability.´
Ranade was more realistic when he spoke about the revival or the growth rate of the capacitors market in India.´The domestic capacitor market does not appear to have significant growth prospects, both over the long and short term. However, other product categories for capacitors, namely power capacitors and super capacitors, will experience an explosive growth in the long term and a significant growth in the short and medium term. This will largely be fuelled by the increased demand for power quality and conditioning devices such as power factor control panels and power inverter based devices.´
With the government´s decision to implement better energy management systems, further tap renewable energy sources and bring down T&D losses, smart grid and smart meters have become two very frequently heard words in India. The global smart meters market size is expected to grow at a CAGR of 10.2 per cent during 2014-2019 and will be a $18.2 billion industry by 2019. India is expected to install 130 million smart meters by 2022 and is currently one of the biggest energy consumers with growing demand and has one of the largest power transmission networks in the world. However, high T&D losses and incidence of power theft have been a major area of concern. These are challenges and at the same time present a huge market and opportunity for smart meters in India.
According to Ravichandra, ´Smart metering systems will be the lifeline of the metering industry and will give strong support to the government´s smart cities initiative. These will see development and technological advancements owing to growing demand for electricity in the forthcoming years. We expect policymakers to emphasise on issues such as depletion of Aggregate Technical & Commercial (AT&C) losses.ö Reduction in commercial losses is the biggest advantage of having smart meters and this will be a major growth driver of the sector. Smart meters will reach both commercial and residential segments owing to multiple benefits like saving the cost of manual meter reading; conquering the problems related to electricity theft, collection inefficiencies and poor billing. The government is showing lot of interest in acquisition of smart metering technologies and schemes and announcements are expected.
Net metering could be one of the major step in this direction in order to achieve energy security by 2022. Net metering for rooftop installations allows users to ´net offö their energy bill for every unit sent back to the grid after one´s own consumption. This is advantageous because it promotes solar energy installations and generation; takes pressure off the grid especially when the demand is high; saves money for utility companies on meter installation, billing, etc.; and, helps our state achieve its solar energy target.
CHALLENGES AND GROWTH EXPECTATIONS
Development in infrastructure, real estate and smart metering initiatives by the government is expected to further fuel demand in the meters segment. However, Ranade has pointed out the challenges faced by the sector, ´Timely payments to EPC companies involved in the rural electrification and other projects by the government will be pivotal in ensuring that the growth momentum is maintained. Cash flow and liquidity for manufacturers (due to delayed payments) will pose serious challenges to industry growth.´
B Sreenivas, Executive Director South-East Asia Operations, Circutor Energy Management Pvt Ltd, said,´The smart grid/meter initiative will increase demand and read as a fast revival for the segment. The demand proposition is expected to be 1:10, i.e. 10 times of what it is now. On the implementation front, it will take two-three years for smart meters to be common in metro cities and five-seven years for pan India roll out.´
Ravindra was quick to add, ´India has a pressing requirement to reduce energy losses. Reduction in commercial losses is the biggest advantage of smart meter and will be a major growth driver. GoI initiatives for 100 smart cities, will give further impetus as energy storage and distribution is the lifeline for smart cities. Other schemes like Integrated Power Development Scheme and Deendayal Upadhyay Gram Jyoti Yojana, will also provide a push. The concept of net metering would be a game changer in this aspect.´
Through smart power, customers can expect complete integration of power gear, control gear, metering and WAGES on a common platform called PME (power monitoring expert). It comes fully loaded with billing (for tenant billing and cost allocation), energy analysis, energy awareness, power quality and UPS performance modules for achieving overall objective of smart enterprise.´
While India has product intelligence on par or maybe a degree higher than globally, we are far behind in adopting newer technology. This is because the companies do not give the required time for the technology to mature in the domestic market. What we require at this stage for capacitors is capacity utilisation; and for meters is standardisation and a proper guide/document to keep up the standardisation.
-Renjini Liza Varghese