“The emphasis on technology and innovation will continue, while also in keeping with our core value of ‘social impact’, we will continue to focus on cleaner and greener solutions and low loss, and high ampacity products.”
Excerpts of the interview with Mr. Manish Agarwal, CEO-Infrastructure & Solutions Business, Sterlite Power Transmission Ltd.:
Challenges to reckon with:
Primarily, one of the biggest challenges that the sector has to contend with is that of reintegration into the grid. At the moment, huge generation capacities are being added much faster than evacuation systems can be built. Hence, it is important that the transmission systems should be planned ahead of generation. Retro-fitting many of the existing transmission infrastructure and augmenting their capacities can be done in a timely and cost-effective manner as these do not require additional space/RoW which usually takes a lot of time to sort out. Importantly, this is an environmentally-friendly solution, which does not require any alterations to the nearby forests, habitation or vegetation, as the enhancement of capacities is undertaken within the same existing power corridor.
Additionally, going forward, the utilities must wholeheartedly embrace the latest transmission technologies that can help them deliver reliable and quality 24×7 power to the last mile. The adoption of innovative technologies will accelerate the robust recovery of the sector and modernize ageing transmission assets making them more efficient and also minimize human intervention. They are also the key to enabling grid resilience and security. A key focus in the next 6-12 months is going to be towards working on capital management and securing funding for projects. Institutional financing needs to be scaled up in the sector and public-private partnerships should be nurtured further ahead.
Expectations from the Government:
We are extremely confident in the slew of initiatives by the Indian Government aimed at reviving the economy. The focus on manufacturing and infrastructure is particularly heartening. Initiatives and forecasts such as the – National Infrastructure Pipeline, Production Linked Incentive scheme, and introduction of new export incentive regime under the RoDTEP scheme holds tremendous promise. Further, the Government of India (Department of Expenditure-DoE) has taken cognizance of the national security and they issued an order to regulate bid participation in public procurement projects. These are some welcome steps and will definitely have a multiplier effect on the domestic manufacturing industry and will also help in job creation in the country.
That being said, the implementation of the scheme and the adoption by states will determine the efficacy of these policy instruments. For example, the impending announcement of the rates under the RoDTEP scheme will bring much needed clarity and respite to the industry. While the investment cycle is expected to pick up, it is crucial for the centre to now play an increasingly proactive role in accelerating this process.
On the subject of power transmission, we congratulate the government and policy makers in meticulously devising central funds, such as the PSDF scheme, for creating necessary transmission systems of strategic importance. Since the inception of the scheme, various state transmission utilities have successfully decongested many critical transmission corridors by implementing solutions aiming at a capacity augmentation of existing infrastructure such as – reconductoring, voltage upgradation, multi circuit- & multi-voltage transmission. The scheme, however, appears to have slowed down due to limited fund availability. The central government is requested to replenish the fund and also, broaden the scope to include loss reduction in the transmission sector. Member states and regulatory authorities should ensure that appropriate incentives, notably financial incentives, are given to the Transmission system operator to act in a rational and economic way with regard to congestion and loss reduction. Incentive over and above return on equity for cost plus project can be proposed to reward reduction in congestion. Such incentives are common in the European grid.
Strategies to strengthen the economy post-COVID:
We feel extremely fortunate to be working in a sector which allows us to contribute to building critical national infrastructure assets. Sterlite Power is a purpose-driven organization with core values of social impact, innovation, respect, and fun. We excel at solving the toughest challenges for power transmission at the intersection of time, space and capital. Reliable and quality power is crucial for robust socio-economic development. We partner with utilities to enable the delivery of power to the last mile by addressing transmission congestion challenges through the framework of time, space and capital. We help them do this in the most cost-efficient and environmentally friendly manner through uprate/upgrade of existing transmission assets. This saves them money, time and also, space as power ampacity is enhanced on transmission lines within the same corridor, without taking up any additional RoW. Whatever funds they save by modernizing their brownfield transmission assets in lieu of opting for Greenfield, can be redeployed to areas which need funding. Today, there are 20+ states in India along with the Power Grid that have embraced the uprate/upgrade of existing transmission infrastructure and Sterlite Power has partnered a majority of them.
On the products’ side, we are the world’s leading manufacturer of high performance conductor solutions and export to 60+ countries abroad. Aside from this, we have a thriving underground power cables business where we execute EHV projects on a turnkey basis. We are also India’s largest integrated manufacturer of Optic Ground Wire (OPGW) and the largest player in fiberization of existing transmission assets.
In summary, we contribute significantly to the economy through our businesses and our excellence in project executions. We generate employment through manufacturing not only for our organization but to associated partners, vendors and industries and most importantly, we play a small but significant role in contributing to the nation’s export economy.
Fast forward to 2021 – the way ahead:
We are cautiously optimistic about a full economic recovery this year. This year’s business performance will be judged on the cash velocity across products and service lines. We have also considered very high growth scenarios in our business planning based on factors such as global supply chains shifting to India, infrastructure spending to support job creation, and economic revival etc.
Our exports business will become more competitive with our readiness of products and solutions for the overseas markets. The emphasis on technology and innovation will continue, while also in keeping with our core value of ‘Social Impact’, we will continue to focus on cleaner and greener solutions and low loss, and high ampacity products. Overall, we will have to become more competitive around productivity in manufacturing and innovation.
