GE Power India to grow 50% in 2016: Steve Bolze
GE Power’s president and CEO Steve Bolze says India has become a real microcosm for everything going on in the global power sector
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Mumbai: Steve Bolze, president and chief executive officer of GE Power, believes digitization will be the biggest disrupter for the power industry in the next 10-20 years. In India to address the conference on the Future of Electricity organized by Mint and General Electric Co. last week, Bolze said India has become a real microcosm for everything going on in the global power sector. Edited excerpts from an interview:
You have met with Indian policy makers and industry officials this week. What are the key takeaways for GE Power?
The world right now has a major need for power: 50% more in the next 20 years. We are all talking about affordable, accessible, reliable and sustainable power. I would say nowhere in the world is it more visible and apparent than in India. When we talk about 50% more power in the next 20 years in the world, in India it is 100% more power in six years. It is almost four times the rate of growth than the rest of the world.
So, that drives the need for investment right now. On the power front, however, India has been a bit variable. There have been challenges not only at the policy level but fuel availability and pricing too. Power is a growth business for us and with our recent Alstom SA acquisition, we have gone up from 15% representation in India to 55%. We have also on boarded around 3,000 Alstom SA employees to go up to 18,500 employees in India. And in terms of our commitment and local presence, it has never been a more exciting time to be in India.
So how do you see your India business growing?
In the power segment, our India business would probably grow by 50% this year. In the past, we have been growing over 50%. And that is pretty good. We have 3,000 employees for the power segment in India, with over a third of these being engineers. They are not only supporting our projects in India but also some of our global work. Our team is excited because projects are happening in India and a lot of work that is being done in India is impacting some of our biggest launches such as HA gas turbines. Also, one of the biggest transformation that is happening in the industry and the company is digital. And we have a big digital and data science team in Bengaluru. We would be piloting things like Predix (GE’s Industrial Internet of Things platform), with customers like GMR in India. So, India has become a real microcosm for everything that is going on in power sector in the world.
What do you mean by digitization in the power sector? What is GE doing to get that process in place?
Digitization is the single biggest transformation going on right now in the world and will be the biggest single disrupter to the industry in the next 10-20 years. Say today you have a lot of assets that exist to generate power and they were put in place in an era where a lot of it was just physical understanding of the assets. Digitization is all about mating the physical with the digital world, monitoring all the data that comes out.
We have terabytes of data that come out of a gas turbine every year with advancement in data analytics. By hooking up physical assets with data analytics, you can unleash new areas of high performance, better emission performance, better output and better efficiency, so the assets would perform better than they do today. This is real.
Our customers and we know there are more opportunities here. Digital is a huge strategy for the company and we basically re-pivoted the whole strategy to be a digital investor. We are all focused on how to get more efficiency, output and serviceability of the existing assets. From a customer’s point of view, they would want the most return on investment on their assets. India has been quick in adopting the digital disruption.
In the Indian culture, there is always emphasis on innovation. In the power space alone, we have 15 data scientists working at our data centre in Bengaluru and we have digital solutions rolling out here. I think you will see more of that happening. That is why digital is such a big thing.
But capital expenditure by a lot of companies has been put on hold. Would companies pay for digitization?
I would say that they are clearly some short-term challenges. Companies, particularly in the energy field have to make adjustments in the timing of project closures, fuel availability and tariff. Those challenges are reality and that affects not only other players but GE, too.
But I would say that policies are now becoming clearer. The demand is clear; the diversity of technology going to be acquired even in a world that is a little uncertain is clear. There is clarity on the focus on energy efficiency. So, we have to manage these challenges through the short term for the long term. Besides, India is not unique in terms of challenges; other markets too have them. The gas market has been very slow here because of availability issues. Emission standards are there and people have to meet those standards.
So does the emission issue become an opportunity? It does add to cost...
It is a constant balance. You have to have sustainability with affordability and accessibility. There are close to 250 million people in India who don’t have access to electricity. But the approach that India is taking is one of the most progressive. Adhering to emission standards does add to cost, as there is capital investment that needs to be put in place, making it more expensive in the short term. But I would say that is when you get into the policy on diversification. You have to have a combination of cleaner coal, plus renewable, plus over time, you are going to have more gas availability and that is how you balance it all and thus, emission is an opportunity.