ABB to make India export hub for high-end power gear
Swiss-Swedish power equipment and robotics company ABB Ltd will transfer new smart-grid technologies to its Indian arm and ramp up local production to make the country an export hub for high-end power transmission systems and micro-grids, said ABB India Ltd chief executive officer and managing director Sanjeev Sharma.
The idea is to capitalize on the growing market in India for energy-efficient equipment in the entire electricity value chain and for micro-grids capable of addressing power deficit in far-flung areas where supplying power from the grid is not feasible. The expanded local capacity will be used to supply to global markets. The power equipment industry is benefiting from the capital spending that transmission and distribution utilities are making to add capacity and efficiency and manage the peak power demand with the use of data analytics.
Accordingly, ABB India will execute the contract it won in January from state-owned Power Grid Corp. for an 1,800 km high-voltage transmission line connecting Raigarh in Chhattisgarh to Pugalur in Tamil Nadu mostly with locally made equipment worth about Rs3,600 crore, said Sharma.
The two-way DC transmission line will serve south Indian states with coal-based power from Chhattisgarh when the wind power generation in the south is low. When there is surplus wind power generation in the south, the grid will meet the energy demand in central India.
In 2016—the company follows the calendar year as its fiscal year—exports accounted for about 16% of ABB India’s revenue of Rs8,648 crore, showing a 23% growth from a year ago.
“Our average investment in the last five years has been over $100 million a year. That is the minimum we will make in the coming years, and it could only accelerate. We are a long-term player. We will continue to expand as the market expands,” said Sharma.
Sharma said that the key areas of expansion in India, which will also help in meeting ABB’s global supply requirements include production of gas-insulated switch gears, micro-grids and transformers and other equipment used in electrical locomotives. The micro-grid system is being made at ABB’s factory in Bengaluru.
Sharma said the parent firm will transfer a technology used in making the ultra high voltage DC transmission system to the Indian arm and that it will be used in the country for production of equipment in the future to supply to ABB’s global customers.
“Despite overall lean (power) demand conditions, there are sizeable network investments underway driven by new renewable energy capacity and network upgradation. Also, growth in urban area loads is driving new investment in high-end distribution networks,” said Kameswara Rao, leader of energy utilities and mining at PricewaterhouseCoopers in India.
“We launched the micro-grid solution last September and already, four-five projects are under execution. It can integrate power from different sources including wind, solar and diesel generation sets. Microgrids can replace diesel- based power generation capacity in the country,” said Sharma. ABB has 45 factories in India at present.