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5/12/2014 Electrical Monitor :: Countering the end-of-line challenges

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Countering the end-of-line challenges
Venugopal Pillai, Wednesday, August 24, 2011, 12:27 Hrs [IST]
The term "switchgear" broadly refers to a family of electrical
switching devices that can make or break an electrical circuit.
Switchgear typically comprises disconnectors, fuses and circuit
breakers. Switchgear is used not only to de-energise equipment
but also to stop (isolate) electricity supply to the equipment to carry
downstream maintenance work.
In addition to simply making and breaking an electrical circuit,
there are devices that are used to protect the electrical circuit and
the equipment therein. These devices are collectively known as
control gear and could include devices like relays, motor-
protection appliances, etc. Nowadays, control gear is heavily based on electronics. For instance, digital relays are fast
replacing conventional (electro-mechanical) relays.
Switchgear and control gear are indispensable not only in power transmission and distribution, but anywhere where
there is need to access and control electricity supply. Switchgear could include anything from a simple domestic
switch to a high-tension circuit breaker. However, when one talks about switchgear, domestic switches do not form
part, but isolation and/or circuit-protection devices like circuit breakers and earth-leakage current detectors are
considered.
Performance of Switchgear Industry: 2008-09 to 2010-11
Weight Market* y-o-y % change
(%) (`crore) 2008-09 2009-10 2010-11
Switchgear 15.2 8,864 0.0 14.5 21.0
Power Contactors 1.9 1,108 -17.8 41.0 29.0
LT Circuit Breakers 3.7 2,158 -1.0 29.4 19.0
MCBs 3.0 1,749 9.7 23.0 8.0
S/F and F/S Units 0.6 350 -11.1 5.3 4.0
HT Circuit Breakers 6.0 3,499 2.4 -5.8 28.0
Total for electrical eqpt industry 100.0 58,315 2.7 11.3 14.0
Source: IEEMA *Estimated industry size in 2010-11
Control panels, technically known as electrical distribution control panel, are used to house switchgear and control
gear. Power factor correction is becoming an integral part of electricity consumption. In line with this, automatic power
factor correction (APFC) systems and panels also constitute switchgear and control gear, in the broader sense. For
commercial and industrial power consumers, switchgear and control gear is always used in the form of control
panels. The switchgear industry can be broadly classified as "high voltage" and "medium and low voltage". The HV
category has only large and established playersincluding multinationals. It is the LV & MV class that is
characterized by small and medium enterprises, apart from a sprawling number of players in the unorganized sector.
When it comes to installation of switchgear by industrial power consumers, it is usually the control panel fabricator
that is the last link of the business chain. An electrical control panel fabricator designs and produces a panel
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customized to the requirement of the industrial consumer. The final consumer can specify the choice of switchgear or
leave it to the panel fabricator. This is true of LV and MV switchgear. When it comes to HV switchgear, it is usually the
manufacturer that takes care of housing and installation; fabricators usually cater to LV and MV gear. The relatively
larger players in the panel fabrication industry also sometimes act as system houses for switchgear manufacturers.
These fabricators qualify as original equipment manufacturers for housing the company's switchgear.
INDUSTRY SIZE & GROWTH RATES
The size of the Indian switchgear industry is estimated be 8,864 crore in 2010-11, according to statistics released
by IEEMA. This does not include domestic switches. The switchgear segment accounted for around 15 per cent of the
total electrical equipment industry. IEEMA statistics further suggest that switchgear industry grew by 21 per cent in
FY11, making it amongst the highest growth in recent years.
In FY10, it had grown by 14.5 per cent while it recorded stagnation in the recession-struck FY09. Much of the overall
growth in FY11 came from an impressive performance of two product linespower contactors and HT circuit
breakers. Both these sub-segments posted around 28 per cent growth in FY11. The switchgear industry also turned
out to be the fastest growing segment in the electrical equipment space in FY11.
ELECTRICAL CONTROL PANELS
As earlier discussed, it is the control panel fabricators that form the last-mile connectivity in the switchgear and
control gear business chain. The panel fabrication industry is a huge activity in India, with a domineering number of
players in the unorganized sector. It is estimated that the panel fabrication industry is worth around 5,000 crore per
year. The number of players in the industry escapes estimation thanks to the vast presence of micro-enterprises. The
value addition provided by panel fabricators is estimated at roughly half of the size of the switchgear industry.
Panel fabrication is largely an informal industry in India. The presence of a large number of players simply reflects the
nonexistence of entry barriers. Switchgear panels do not get the attention they deserve as they are not as critical as
the switchgear they house. As such, there is a ready market for panels even if their standards are not up to the mark.
The lowest end of industrial power consumers usually deal with fabricators in the unorganized sector. It is only as the
size of the industrial consumer gets bigger does insistence on quality grow proportionately.
The panel fabrication industry also faces a typical "end of
line" challenge, as explained by Soeb Fatehi, President,
Control Panel & Switchgear Manufacturers' Association
(COSMA) in a recent interaction with Electrical Monitor. A
switchgear panel is usually treated as an insignificant
percentage of the total project cost and hence it does not get
due attention during the project planning and design stage.
As cost allocation to switchgear panels is usually
inadequate, there is extreme pressure on the supplier to
work within the available resources. This leads to quality
compromise seeping in. Secondly, switchgear panel
designs varied widely across the vast number of suppliers.
Due to budgetary and other constraints, fabricators usually
end in making customized panels for end-users. There is very little scope for standardization. If switchgear panel
designs could be standardized, panel fabricators could get their product typetested and certified. This would not only
bring about significant formalness in the industry but would also help panel fabricators to move up the value chain,
and even match global quality standards. The informality of the panel fabrication business has become its undoing
and is preventing small and medium players from being globally competitive.
Good switchgear panel
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A good electrical (switchgear) control panel design is not based on
general arrangement and elegant appearance alone. Mechanical
rigidity, busbar support, formation of fabricated components and
mounting of switchgears and instruments should also be taken into
consideration. Ventilation is the most important aspect for
designing control panels for giving cooling effects to the current
carrying equipments. Several suppliers insist on short circuit test
for switchgear panels to check the rigidity of mechanical and
electrical design. But it does not end there. One should check
whether the design is as per relevant specification of the test
carried out. There should be some published standardisation
based on Indian specifications. Engineers should take utmost care while designing switchgear panels looking at
these parameters, ensuing that Indian products match international standard.
(Based on views expressed by Kumar Bose, Managing Director, Switch Build Engineers Ltd, Nagpur, in a previous
interaction with Electrical Monitor)
Lack of national standards is also impinging upon the industry's growth, Fatehi feels. "The National Electrical Code,
which was last published in 1985 and due for replacement by a new code, is still not in the hands of industry. BIS
must hasten all processes and seek support from government and industry to overcome obstacles impeding the
release of the new code. Whereas industry wants to always willingly comply and serve the consumer and the nation,
we must place ourselves as responsible players, second to none globally," Fatehi observed.
DEMAND DRIVERS
Switchgear and control gear is an indispensable component of an electrical circuit-traversing the entire value chain
right from a power generation plant to a power socket. As such, the switchgear industry finds applications from the
supply side (generation, transmission and distribution of electricity) as well as the demand side (consumption of
electricity). Hence, the demand for switchgear will be proportionate to asset creation in the power sector as well as in
the consumption sector-infrastructure, industry, real estate, etc.
Power Sector: In the XII Plan period, India is expected to see an investment of 11.35 trillion in its power sector with
generation accounting for 5 trillion, transmission 2.4 trillion and distribution, the remaining 4 trillion. The total
outlay for the XII Plan will be around 7 per cent higher than that in the XI Plan period (see table.)
The biggest boost to the low-voltage switchgear industry will come from the power distribution sector where the XII
Plan outlay is nearly 30 per cent higher than that of the XI Plan period. The Centrally-sponsored Rajiv Gandhi
Grameen Vidyutikaran Yojana (RGGVY), which envisages nationwide electrification of villages, can be a big demand
driver for lowend switchgear like domestic circuit breakers apart from switchgear associated with power substations.
India is moving to the 1,200kV power transmission regime with Central transmission utility Power Grid Corporation of
India already in the midst of developing a test line of this ultra high voltage in Madhya Pradesh. As India moves to
higher kV categories in power transmission, the demand for high-end switchgear will rise. This gives an opportunity
to existing players to move up the value chain.
Industry & Real Estate: The industrial sector is a big demand driver for low and medium voltage switchgear. A smart
revival in projects investment in the manufacturing sector therefore bodes well for the switchgear industry. According
to a survey made by ProjectsToday (www.projectstoday.com), the outstanding projects investment in the
manufacturing sector rose by an appreciable 20.9 per cent in June 2011 from its level a year ago. Industrial
investment has maintained its momentum and has by now obliterated all the ominous slowdown symptoms of 2008.
In fact, even overall projects investment including other sectors like energy, infrastructure, irrigation, etc-was up 16 per
cent in June 2011.
Power Sector Outlay
(`crore)
XI Plan XII Plan
Generation 591,734 495,082
5/12/2014 Electrical Monitor :: Countering the end-of-line challenges
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Transmission 140,000 240,000
Distribution 309,077 400,060
Others 18,104 ---
Total 1,059,515 1,135,142
Apart from conventional switchgear and control panels that are used by industrial consumers, there will be a clear
increase in the usage of automatic power factor correction (APFC) panels. This is because several power utilities are
imposing penalties on industrial power consumers that do not maintain a healthy power factor ratio. Apart from
"escaping penalties", industrial consumers are also getting conscious of energy efficiency and are known to be
installing power factor correction solutions voluntarily.
Revival in the real estate marketboth commercial and
residentialalso appears to have set in. This will further
bolster the demand of low voltage switchgear. Over the
recent past, there have been innovations in the LV
switchgear market. For instance, conventional circuit
breakers are being replaced by residual current breakers
and earth leakage breakers. An industry source explained
that while conventional circuit breakers disconnect the
circuit in times of overload and shortcircuit, residual
breakers stop electricity supply when an "electrical shock"
is detected. Earth leakage breakers disconnect power
supply when faulty or inadequate earthing is detected.
There is clearly a trend in residential low-voltage
switchgear where human safety, and not just circuit and equipment protection, is being given due importance.
EPILOGUE
The Indian switchgear industry has evolved considerably over the years and is clearly headed for a dynamic future.
The sheer growth in power generation and consumption will propel demand of switchgear in the coming years.
The recent years have seen significant innovation in the low, medium and high-voltage switchgear industry. Generally
speaking, switchgear now has become more compact, intelligent and energy-efficient. In the medium voltage range,
vacuum circuit breaker has been a big expression of modern technology. VCBs are now being made even in the high
and extrahigh voltage range. Gas insulated switchgear (GIS) has successfully replaced air-insulated switchgear
(AIS), resulting in reduced footprint of switchgear. Besides, modern GIS and AIS is also doing away or reducing the
use of environment-unfriendly sodium hexafluoride (SF6) gas.
The biggest challenge ahead of the industry lies in the high-voltage segment. As power generation capacity
increases, power T&D infrastructure will grow and will also become more complex with fault rates threatening to rise.
This warrants the need for efficient highvoltage switchgear and its periodic maintenance. At this juncture, it is also
important to note that industry experts foresee a shortage of skilled manpower for upkeep of highvoltage outdoor
switchgear. Availability of spares and services, easy diagnostics, efficient after-sales services are soft areas that
would govern the prospects of high-voltage switchgear.
It is also believed that India needs to improve its testing facilities with respect
to high-voltage switchgear, as much as it needs to do with other high-voltage
equipment like transformers. On this count, it is worthwhile mentioning that
lack of standardization is hurting the switchgear panel industry in many ways.
First, it compels fabricators to go in for repeated type-testing, which is time-
consuming and counterproductive. Secondly, it also gives room for supplying
sub-optimal switchgear. When it comes to LV and MV switchgear panels, the
principal deterrent is the fact that it gets little attention and incommensurate
resources at the time of planning and design. Hence, as earlier pointed out,
suppliers are often made to work on tight financial budgets. This compromise
on quality, however inadvertent, leads to domestic suppliers failing to groom
into globallycompetitive entities.
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The switchgear industry will also benefit from a change in mindset. Normally, switchgear is seen as a "non-
productive" asset. While this is true from a purely technical standpoint, the criticality of switchgear and control gear is
always felt in time of dysfunction. Switchgear could be a non-productive assets, per se, but it is time to realize that it is
switchgear that makes assets productive.
Low & Medium Switchgear: Overview
According to a recent presentation made by the Energy & Power Systems Practice of Frost & Sullivan (South Asia,
Middle East and North Africa), the total market size for low and medium voltage switchgear market in India stood at
$1.745 billion (roughly 7,852 crore) in 2010. Out of this LV switchgear accounted for $950 million, while MV
switchgear accounted for $795 million (see table.) The report pointed out that for the LV switchgear market, there is
universal demand. However, industrial consumers account for most of the consumption, followed by commercial
and infrastructure segments. The demand from the residential (real estate) sector is mainly for low-end products like
mini circuit breakers, moulded case circuit breakers, residual and earth leakage detectors and distribution boards.
The MV switchgear (3.3kV to 36kV) class comprises high-end switchgear like indoor switchgear, outdoor switchgear,
ring main units and unitized substations. The demand for MV gear is predominantly from the power sector-power
generation and T&D utilities. High tension consumers from the industrial and infrastructure space also account for
MV switchgear consumption. In the MV gear segment, compact (or unitized) substation is a new product and is
gaining significance. A CSS finds application is areas where there are space constraints. The report points out that
key success factors for companies in the switchgear industry would generally include competitive pricing and strong
after-sales support. The study also observes that key industry challenges to the switchgear industry are fluctuating
raw material prices and uncertainty/delays in implementation of various power reform initiatives. Factors that could
restrain growth would be the poor health of state electricity utilities and the general macroeconomic challenges that
could constrain public and private funding. On the other hand, growth in the switchgear industry would be driven by
expansion in the industrial and infrastructure segments. Besides, expansion in power capacity and the T&D network
would be an additional demand driver.
Low & Medium Switchgear Industry: A Profile
LV MV
(<1.1kV) (3.3kV to 36kV)
Market Size (in 2010) $950 mln $795 mln
No. of players 40+ 20+
Key Products Air Circuit Breaker Indoor Switchgear
MCB Outdoor Switchgear
MCCB Ring Main Units
Contactors Unitised Substations
Relays
Residual Current Devices
Distribution Boards
Distribution Boards
Vacuum Circuit Breaker
End-user segments Power Generation Cos Power Generation Cos
T&D Utilities T&D Utilities
Industry Industry
Infrastructure Infrastructure
Residential Sector
Commercial Sector
Major Players Larsen & Toubro Crompton Greaves
Schneider Electric Alstom
Siemens ABB
ABB Schneider
Havells Bharat Heavy Electricals
Legrand
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Source: Frost & Sullivan


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