Power is one of the key
infrastructure elements
supporting a nation's growth.
India historically has been suffering
from power deficit and over the years
several alternative sources of power
have attained strategic importance in
addressing this deficit. Due to the
continued power deficit situation,
demand for reliable, high-quality
back-up power sources in the form of
gensets, UPS and power inverters is
expected to witness a quantum leap.
In India, the peak and non-peak
electricity shortages are
approximately 12.9 per cent and
10.1 percent respectively, during
2011-12 (Source: CEA). Inadequate
power generation, issues with land
acquisition for new power plants,
availability of fuel linkages/fuel
shortage, and high transmission and
distribution (T&D) losses are some of
the contributors to this shortage.
The Indian UPS market, having
close to 300 suppliers, is a highlycompetitive,
fragmented, and growing
market, with both multinational and
Indian suppliers competing for space.
The revenue for this market was
estimated to be between Rs.25,500 -
26,000 million in 2011-12. This
market would witness robust growth
owing to steady demand from sectors
such as government and infrastructure,
information technology (IT) and ITenabled
services (ITeS), banking,
financial services and insurance
(BFSI), manufacturing, telecom,
power, and oil & gas, etc.
TYPES OF UPS
Standby / Offline UPS: Standby UPS
systems are the most commonly used.
Electrical power flows from the power
grid into the application, and at the
same time, charges the battery. When
not in use, the battery remains idle and
does not interfere with the running of
the application. When utility power
fails, UPS system is kick-started and
power flows from the battery into the
application, keeping it running even
though it does not receive power from
the power grid. Applications include
personal desktops, printers, and small
servers. The topology of this system is
available in the below 5kVA range.
Line-interactive UPS: This UPS
system is most commonly found in
small businesses and small server
applications. Electrical power flows
from the power grid through a
transfer switch and into an inverter,
which is connected to the output of
the UPS system. When power from
the power grid fails, the transfer
switch is opened and power flows
from the battery to the application.
These UPS systems also provide
additional filtering and protection.
This topology dominates the UPS
types in the 0.5-to-2kVA range,
although it is also available in the
below 20kVA range.
Online UPS: These systems are
generally more expensive than the two mentioned previously, and are mainly sold in the 3 kVA
and above power range. In an online UPS system, the primary
power path is from the inverter instead of from the power grid.
The battery, along with a rectifier, plays the major role in
powering the application, even under normal situations. Using
a double-conversion topology, the power from the grid is
converted from alternate current (AC) to direct current (DC)
and then to AC again, thus effectively reducing all noise and
harmonics that might be generated due to an unstable power
supply. This provides a near ideal electrical performance.
MARKET SUPPLIERS AND SEGMENTATION
Suppliers can be broadly classified into three categories:
- Tier 1 suppliers are those who have a pan-India presence.
For example, Emerson Network Power (India) Private Ltd,
Numeric Power Systems Ltd (now part of Legrand, France),
Schneider Electric and others. They cater to more than half
of the market.
- Tier 2 suppliers are those who have a regional sales and
services presence in two or three regions of the country. For
example Switching AVO Electro Power Ltd, Aar-em
Electronics Pvt Ltd, etc.
- Tier 3 suppliers are those who have presence in pockets (two
or three cities or in a particular state only). They may have
presence in a single region of the country as well.
- The market can be segmented by the following power
ranges: Less than 1kVA, 1-5kVA, 5.1-20kVA, 20.1-
50kVA, 50.1-200kVA, and more than 200kVA
INDUSTRY CHALLENGES
China and Taiwan are the major countries for sourcing lowpriced
UPS systems. The cost of importing UPS from China
and Taiwan for most participants works out more economical
than manufacturing them in India (mostly for lower-rating
UPS, less than 10kVA). This has led to reduction in manufacturing of UPS in the country.
Some suppliers sell underrated UPS to gain higher margins.
This affects other suppliers in the market selling UPS with the
correct rating. This trend is witnessed in the less than 1kVA UPS
market and to some extent in the 1-5kVA UPS power range.
DRIVERS
Growth in the IT/ITeS sector is one of the biggest drivers for
the UPS market. The growth of this sector is on a positive
trend and is, therefore, one of the major drivers of UPS market
growth. UPS systems of ratings more than 20kVA are
typically used in this sector.
- Increase in demand from sectors such as Infrastructure,
Manufacturing, and BFSI is leading to the increased
demand of UPS systems.
- Increase in demand from Home, SOHO, and SME sectors,
because of increased penetration of personal computers
could have a positive impact on the market.
- The Government's emphasis on computerization in schools
and Government offices along with its various e-governance
initiatives has had a very positive effect on the growth of the
UPS industry.
RESTRAINTS
- Cannibalization of desktop sales by laptops is a major
restraint for the UPS industry. Sales of UPS up to the 5kVA
range are impacted, as laptops are gaining popularity over
desktops be it at home, offices and education institutions.
- Slow replacement rates are affecting new sales for UPS
systems in the more than 5kVA power range. UPS systems in
the more than 5kVA power range have a life of 5 to 10 years;
hence have slower replacement rates.
- Improvement in power quality in some regions or cities
curtails the demand for UPS systems for non-critical
loads. Partial privatization of the power distribution
network in some states such as Gujarat, Bihar, Jharkhand,
Punjab, Sikkim, and Jammu and Kashmir has resulted
in improved power quality, with fewer power outages,
burnouts, or voltage fluctuations. This has had a minor
impact on the UPS market for the less than 1kVA and the
1-5kVA range typically serving the home, SOHO, and
SME/SMB sectors (UPS used for the protection of
non-critical IT equipment). The power distribution of cities
such as New Delhi, Mumbai, and Kolkata is already under
private control.
(Anindya Das is Industry Manager, Energy & Power
Systems Practice, Frost & Sullivan - South Asia, Middle
East & North Africa)