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EHV Cables: Slow Start but Bright Future

Venugopal Pillai ,  Thursday, May 30, 2013, 14:32 Hrs  [IST]

EHV CablesThis special story by Venugopal Pillai takes a look at the upcoming Indian market for EHV cables. The industry is off to a hesitant start but things should start looking up in the years ahead.

India’s efforts to gain widespread competence in the EHV cable segment has been a very defining development in the traditional cables industry. Over the past five years or so, established Indian cable manufacturers have been consciously trying to enter the coveted EHV cable segment with an objective of getting the first-mover advantage. In time, India will need to deploy EHV cables for its sub-transmission and distribution projects given that the advantages of EHV cables over conventional overhead lines are tremendous. However, the technology for manufacturing EHV cables is very sophisticated and not yet fully indigenized. This has inspired Indian manufacturers to seek global technology as much as it has behooved multinationals to consider collaborations with Indian companies to capitalize on the growing business opportunities.

Although the EHV cable movement has got off to a rather hesitant start, it will gain traction in the coming years, experts feel. Right now, the overall cable industry is in a bad shape due to sluggish domestic demand, and in particular, India is yet quite alien to the EHV cable milieu. The embryonic nature of the domestic EHV cable industry is evident from the fact that even India’s definition of EHV cables is below global standards. In developed countries, cables of rating 220kV or higher are considered extra high-voltage cables whereas in India, going by current definition, cables above 66kV merit inclusion as EHV cables. An industry player pointed out that definitions are relative to the extant situation. For instance, till some years ago, even a 400kV transmission line qualified as a high-tension lines used for inter-regional power transfer. Today with the advent of 765kV, 800kV and even 1,200kV lines (albeit at trial stage), a 400kV line is considered as a sub-transmission line. Going forward, such a line could be relegated to just a distribution line. The same would go with cables, the expert said. Although cables above 66kV are today referred to as EHV cables, the definition will evolve with time. In this study, EHV cables refer to those of rating 220kV or higher.

EHV CablesEvolution of technology
The overall progress made by the India cable industry has been slow. It only reflects the poor investment and upgrade in the power T&D sector. For most part of India’s existence, growth in the power sector was limited to setting up of new power generation plants. It is only from the XI Plan onwards that the T&D sector is beginning to gain recognition.

Early progress in Indian cable technology came in 1978 when the first domestic XLPE (cross-linked polyethylene) cable was produced. Once XLPE technology was commercialized, it laid the foundation for higher-voltage cables. From 33kV, XLPE technology was extended to 132kV cables, albeit with the assistance of global expertise.

In the mid-1990s, Cable Corporation of India became the first Indian company to produce 220kV cables. CCI then manufactured and even installed 230kV cables. The company has already developed 400kV cables and is awaiting test results. An order for laying 400kV cables is already in the company’s hand, it is reliably learnt. Over the past five years or so, there has been a supply-side spurt in the EHV cables industry. Several that are gearing up to acquire EHV cable manufacturing competency with technology imbibed from international partners.

EHV cables have key advantages that make them a preferred alternative over conventional overhead lines. As EHV cables are underground, there is absolutely no interference with existing infrastructure – physically or even aesthetically. Although digging can cause transient disruptions to movement on surface, the extent of right-of-way problems are very less compared with overhead lines.

Power theft from overhead distribution lines is a major source of commercial losses for power utilities. Blatant tapping of power lines is commonplace in tier-II, tier-III cities, towns and rural areas. When power lines are underground, power theft through tapping is physically impossible. Power utilities are increasing replacing overhead lines with underground ones to keep power theft in check and to bring down the lifecycle cost of the power distribution lines.

An industry expert however noted that power theft is not possible through extra high-tension lines; it is usually only the 33kV distribution lines that are tapped. If a power utility decides to go in for underground distribution lines, it is strictly not laying EHV cables. All the same, the cost of laying underground cables is high and state distribution utilities, given the financial mess that they are in, might not have the wherewithal to install underground cables.

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Conductor Technology

EHV CablesEven as India is evaluating EHV cables as an efficient alternative for power sub-transmission and distribution, there is an overwhelming predisposition towards conventional overhead power conductors. In the recent past, India has witnessed a steady inflow of technical expertise in the power conductor business. This, along with the ongoing product upgrades of existing manufacturers, has raised the quality level of power conductors available in India.

India has traditionally relied on conventional conductors like ASCR, AAC and AAAC. However, it must be appreciated that India has unique power transmission needs. It is not only about an ever growing quantum of electricity that will need to be transmitted, it is more about the country’s geographical profile. Power generation centres (northeast for hydropower and east for thermal power) are very distinct from consumption centres, which are typically north, west and south. This calls for superior technologies for efficient power transfer. Even as India is moving to a regime for transmitting power at much higher voltages, even 1,200kV AC, there is a parallel move of bringing about efficiency through better conductor technology. Here is a brief discussion of some recent infusion of international technology.

In September last year, US-based Mercury Cable & Energy Inc entered into an agreement with local company Gupta Power & Infrastructure Ltd to bring its conductor technology to India. Mercury is a leading global developer of high voltage composite reinforced conductors (HVCRC) that have superior efficiency compared with conventional ACSR conductors. In a recent interaction with Electrical Monitor, Todd Harris, President and Ron Morris, CEO, Mercury Cable & Energy, explained that HVCRC replaces the steel core strength component of a traditional aluminum conductor steel reinforced (ACSR) transmission line, with a non- metallic composite core. This enhanced product allows for increased transmission capacity of up to two times that of traditional lines, while lowering line losses, limiting sag and requiring less infrastructure costs to deliver more. The two key officials stated Mercury was pursuing opportunities in 20 new markets in 2013 with India receiving high priority.

CTC Global Corporation, also based in the US, has developed and patented the highly efficient ACCC (aluminium conductor composite core) technology. CTC, last year, completed the first installation of ACCC in India in partnership with Sterlite Technologies Ltd, India’s largest producer of power conductors. The installation was done for power utility Torrent Power Ltd that was wanted to double the capacity of an existing 132kV line between two substations, without the need for reinforcing or modifying the existing lattice structures. The ACCC conductor, according to CTC Global officials, reduces line losses under any load condition by 30 to 40 per cent.

3M, a global innovator, has developed aluminium conductor composite reinforced (ACCR) conductors. The conductor’s outer wires are composed of hardened aluminum zirconium stranded in either round wire or trapezoidal wire layers, similar to most stranded conductors. The core is a multi-strand design, composed of wires made using alumina fibre, infused with high purity aluminum. These conductors are currently manufactured in USA but available in several countries including India.

In late 2009, 3M’s ACCR saw its first deployment in India when power utility Tata Power needed to upgrade its 110kV Borivali-Malad and Salsette-Saki transmission lines in Mumbai. With the use of ACCR, the line’s capacity was doubled from 900 amp to 1,800 amp. Few other orders – including a repeat order from Tata Power – are underway.

Therefore, while laying underground EHV cables (of 220kV or higher rating), the prime motivation comes from the technical infeasibility of erecting overhead lines. In crowded urban areas, EHV cables for sub-transmission and distribution are perhaps the only option available given serious right-of-way constraints. India is urbanizing rapidly. By 2020, an estimated 40 per cent of India’s population will inhabit urban areas, as against 25 per cent in 1991. Power T&D infrastructure in urban centres will therefore need to fulfill two basic requirements—it should be parsimonious in terms of geographical footprint and, it should be future-ready in terms of progressively supporting higher loads. On both counts, EHV cables score very well. Apart from residential and commercial applications, EHV cables are also being viewed as a cost-effective solution to bulk power consumer in the industrial segments like steel, cement, petroleum refineries, etc.

The competency that is being developed in the EHV cable segment is largely targeting the huge demand that urban centres are expected to generate with respect to underground power lines. In the developed world, EHV cables are also in submarine power lines. Offshore wind farms that need extended submarine transmission lines represent a big consumption area for EHV cables. In India though, it will be long before such sophisticated application areas open up.

Despite the general slowdown in the electrical equipment industry, the EHV cable market is expected to grow between 20-25 per cent annually, in the medium term.

EHV CablesEmerging capacity:
As discussed earlier, several multinationals have expressed keenness in entering the Indian EHV cable market. Some partnership have clicked, some have not. Adding to this, several domestic cable makers have enhanced their competency using foreign or even in-house technology.

In the early part of 2008, Finolex Cables — a leading domestic cable maker — joined hands with J-Power Systems of Japan to create a joint venture for EHV cables. The joint venture Finolex J-Power Systems Pvt Ltd aimed at putting up a greenfield manufacturing facility for producing EHV cables up to 500kV and also undertake connectorization of complete circuits and supply of jointing kits. The greenfield plant at Shirwal in Nashik district (near Pune) was commissioned in September 2011. J-Power Systems, in turn, represents the coming together of two Japanese cable giants – Hitachi Cable and Sumitomo Electric Industries.

Between 2009 and 2010, two big names – Nexans of France and Prysmian of Italy – announced their intentions of entering the Indian market through joint ventures with Indian companies. However, it is reliably learnt that both the ventures are turning abortive. Nexans teamed with Polycab Wires. A JV was formed that aimed to set up a greenfield EHV cable facility in Gujarat with an investment of Rs.400 crore. The two partners have parted ways and the JV is no longer in force, reliable information suggests.

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The copper conundrum

EHV CablesAs is the case with most segments of the electrical equipment industry, the cables industry also is a victim of disarray and irregularities at the lowest-end of the product segment, which is the ubiquitous low-tension wire used in home and building wiring. There are innumerable unorganized-sector players in this Rs.10,000 crore industry segment, and it is estimated that their share in the overall market is 40 per cent nationally. While in major cities, the dominance of organized-sector players in higher, in turn due to higher awareness of issues in quality and safety, the share of marginal players can as high to up to 90 per cent in tier-II and tier-III cities.

The biggest grouse against marginal players is the use of inferior copper. It has been estimated by International Copper Promotion Council India that building wires adhering to standards can help save 277 mw of power for the entire country, per day. Secondly, inferior wires can attract power losses and power failure. The worst aspect of inferior wires is their propensity to catch fire in the event of a short circuit.

Manufacturers in the unorganized sector use commercial (or low-grade) copper and account for around half of the copper consumed in India. This is a rather alarming figure as it means that only half of the copper that finds its way in wires can be regarded as technically safe. Enforcement of quality and safety standards is necessary though it can be highly impracticable in the Indian context.

Awareness of safety in building wires is slowly growing, especially in large cities. Apart from usage of refined (oxygen-free) copper, manufacturers are also using sophisticated polymers that resist fire and emanate low smoke in the event of an electrical short circuit-induced fire. It has been assessed by experts that during building fires, maximum casualty is caused not by the flames but due to suffocation by obnoxious fumes caused by the burning of low-quality polymers used in insulation.

The unhealthy penetration of inferior wires in the supply chain is a matter of concern. It only reflects the sheer indifference of the typical end-consumer and his extreme sensitivity to cost.

Prysmian picked up controlling equity stake (51 per cent) in Ravin Cables Ltd. Globally, Prysmian makes EHV cables up to 500kV. The Italian partner intended to make a range of cables both for power and telecom applications. While no official information is available from either party, industry sources indicate that the partnership is not shaping up as expected with no demonstrable progress since its formation in February 2010.

KEI Industries began production of EHV cables (up to 220kV) at its Chopanki plant in Rajasthan. KEI entered into a technical agreement with Brugg Kabel AG of Switzerland for sourcing technology, without equity participation.

Gujarat-based Diamond Power Infrastructure Ltd, formerly Diamond Cables Ltd, currently produces India’s highest-rating EHV cables. In June 2011, DPIL set up a modern EHV cable factory at an outlay of Rs.85 crore with technical support from Malliefer of France. The plant has a capacity to produce EHV cables up to 500kV. Currently, there are less than ten manufacturers that have the capability to produce cables of 500kV rating.

Leading homegrown companies like Cable Corporation of India, RPG Cables (now a division of KEC International), Universal Cables and Torrent Cables are also extending their competencies in the EHV cables segment. CCI is on the verge of rolling out 400kV cables while RPG Cables recently commissioned a greenfield manufacturing plant in Gujarat for cables up to 220kV.

EHV CablesThe Way Forward
In keeping with the long-term growth prospects in the power T&D sector, it is natural to expect a steady growth in the EHV cable segment in India. However, the market being very nascent at the moment, it will take some time for its characteristics to set in. Even as multinationals are entering the Indian market with great optimism and enhancing the supply side, one cannot be sure of commensurate demand in the early years. Several segments in the Indian electrical equipment industry are already contending with cheap imports, much to the disadvantage of the domestic supplier. The EHV cable industry could be yet another instance. There are Chinese EHV cable brands that are already in talks with Indian companies for dealership.

Industry experts feel that demand for EHV cables in the international markets has substantially receded, making global players look at emerging markets like India. It is worth observing that several multinationals are raring to even go solo in their Indian endeavours. Global giants like LS Cable and General Cable, to name a few, have set up Indian operations without the equity participation of Indian companies.

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Mixed performance

The cables industry declined by a significant 21.1 per cent during the first three quarters of FY13, according to recent statistics furnished by IEEMA. The decline was perceptible in both power cables and control cables. Cables, as an industrial segment, accounts for 27 per cent of the total weight of the overall electrical equipment industry. Power conductors, on the other hand, grew appreciably by 23.5 per cent during the same period. Export earnings have been successful in alleviating the woes of the electrical equipment industry that is contending against depressed domestic demand and the onslaught of cheap imports.

Much of India’s power T&D still exists under public sector ownership. Government power utilities are known for their archaic procurement policies, insufficient autonomy, slow decision-making ability and a very myopic approach towards issues of cost and quality. All this, over the years, has engendered overall techno-commercial inefficiency in the power T&D sector. A decision of replacement of overhead conductors by EHV cables, say, will not be an easy one for power utilities. Secondly, there will be little appreciation of material quality given that “capital costs” have invariably dictated procurement decisions. In such a scenario, it would be difficult for EHV cables to find a ready market when the decision-making it with government entities.

The private sector, on the other hand, realizes techno-commercial and managerial efficiencies very well. Private entities are not bound by the “tendering process” and have a better understanding of lifecycle costs, unlike government entities that are bound by initial capital costs. At this juncture, it would be fair to assume that private power utilities would be better consumers of EHV cables. However, very little of India’s private distribution is currently in private hands and the progress of privatization is stymied by weak political will. In the near future therefore, power utilities might not appear to be ready consumers of EHV cables if sufficient privatization does not take place. All the same, one can expect private sector bulk consumers of electricity like industrial units, commercial complexes, special economic zones, townships etc to be demand drivers for EHV cables.

Technology is an all-pervading phenomenon that cannot be resisted. India cannot remain insular to evolving technologies; after all, efficient technology is destined to play an instrumental role in helping India attain its socio-economic development goals. Technology in the power and electrical equipment industry, in particular, will be critical because electricity is the quintessence of progress. The early days for EHV cables could be that of hesitation but the future is definitely well laid out.
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