Home >Companies >People >Virus crisis turbocharged our digital, analytical push: Vipul Tuli

The government has pushed through power sector reforms quickly through the covid-19 pandemic, but they will need to be implemented quickly for the industry to take full advantage. In an interview for Mint’s Pivot or Perish series, Vipul Tuli, managing director, Sembcorp Energy India Ltd, said the company has pushed harder on its digital investments across its 4,370MW thermal and renewables portfolio to stay ahead of the curve during the coronavirus crisis. Edited excerpts:

How has the power sector pivoted in the new normal?

Of all the sectors, I think the power sector has been the fastest off the block in using covid-19 as an opportunity to transform.

Power is an essential service, and all plants and processes have been running uninterrupted since the lockdown started.

But a massive liquidity issue started to happen because distribution companies (discoms) haven’t been able to keep collections up even as demand reduced.

But the power ministry worked very fast and came out with a liquidity package of 90,000 crore to clear out massive power dues; the ministry has pushed along long-standing amendments to the Electricity Act and the new tariff policy; the government announced commercial coal mining reforms. All of this will have to be implemented quickly.

We would like to see the sector be the first past the finish line also.

Do you think the competitiveness within renewables has waned?

Typically, the capital into the renewables sector has come from relatively short-term investors even though the (power-purchase) contracts are long-term.

The covid crisis will move the needle towards more sustainable investment.

This has coincided with the fact that it has been three-four years since bidding for renewables started and there is some experience.

We have learnt that you can’t expect companies to operate on slim cash flows, you can’t be on the razor’s edge. If you do, you will go bankrupt and we have seen that happen in spades.

This risk awareness has come to both independent power producers and discoms.

What are the major changes that have happened at Sembcorp that have allowed you to stay ahead in the crisis?

What we think we have been doing quite systematically, over the last three-four years but got turbocharged during covid, is our digital and analytical push.

In general, the power sector is a high-tech sector. The level of technology and big data that goes in is massive, the tolerance for safety is so high that there is no room for error.

For instance, if you are trying to lower or install a turbine blade at 120 metres height with three-four people up there on cranes, you can’t have any room for error.

What we are doing specifically because we are a long-term investor in the sector is to understand that our equipment efficiency and asset productivity are key.

For instance, we have about 1,000 turbines in India and each one is connected digitally to our remote operational centre.

That doesn’t sound like much, but these turbines are spread out; some are near the Pakistan border in Rajasthan, some are in marshy areas of Kutch, some are in the hilltops of Tamil Nadu, some near forests in Karnataka, and they are all connected on a real-time basis.

This makes our equipment efficiency better and we make sure that every time our turbine runs, it is at the perfect efficiency, which can maximize power generation. We know this equipment needs to last 25-30 years till the end of the project’s life. We are not here to sell it after five years.

How do you see India’s energy mix changing in the future?

I believe the key factor is the electrification of the Indian economy. Today, when we speak about energy, we include oil, gas and then the mix within power. But I think power itself will expand and eat into the others’ share. If you look at the biggest uses of diesel today, they are trucks, cars, gensets, pumpsets and railways. Of these, there is a massive push towards electrification in cars and rail, while gensets and pumpsets for agricultural use are almost on their way out.

We talk about the power mix turning in favour of renewables in the future, but the pie itself is becoming larger. Even if we produce 50-60% from fossil fuels after a decade, it is much easier to control emissions at 1,000 power plants than in millions of automobiles. I think that for another 10-20 years, we will still be thermal-dependent, but thermal itself will become cleaner.

If you look at the SOx and NOx (sulphur oxides and nitrogen oxides) emissions, the BS-VI (emission) standards for automobiles, they have all massively tightened.

Coal washing, disposal of ash into other industries like ceramic tiles, that is changing too. Even as we focus on renewables, thermal is also getting cleaner at the same time.

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