Energy Transition #6: India - Opportunities Galore: Mapping the whole Ecosystem (Part 2)
Energy Transition: India Deep Dive (Part 2)
If you haven’t checked it out yet, I’ve covered the overview of the Electrification theme in my previous posts:
OPPORTUNITY IN TRANSMISSION AND DISTRIBUTION:
Different estimates point towards huge investments in the sector - the crux is that a substantial amount of investment is required
As per National Electricity Plan - Investment of 4.75 Lakh Crore in power transmission till 2027
Understanding Transmission & Distribution Landscape in India
Electricity is a concurrent subject in the Indian Constitution. Both Centre and State Governments play a role in this sector. Transmission systems in India consist of ISTS (Interstate Transmission Systems) and Intra-STS (Interstate Transmission Systems).
ISTS serves the following purpose:
(i) Evacuation of power from Inter-State Generating Stations (ISGS) which have beneficiaries in more than one state and transmission up to the delivery point of the state grid.
(ii) Transfer of operational surpluses from surplus state(s) to deficit state(s) or from surplus region(s) to deficit region(s).
The Inter-State Transmission System (ISTS) is being built through Tariff Based Competitive Bidding (TBCB) route or Regulated Tariff Mechanism (RTM). Many private sector entities now Build Own and Operate the ISTS elements.
On the other hand, Intra-STS handles T&D within the state and is mainly owned and operated by the state transmission utilities of each state.
Regulated sector with Central Electricity Authority (CEA) being the planning agency.
One of the limiting factors in deploying a transmission network is the Right of Way (RoW). Hence companies/products that help reduce RoW by reducing the tower footing/base, area/corridor requirements stand to gain. To optimize RoW, the following trends are emerging:
Increasing the capacity of existing transmission lines by upgrading to higher voltages and reconductoring with higher ampacity conductors
Use of multi-voltage level and multi-circuit transmission lines.
Use of narrow base towers and pole type towers in semi-urban / urban areas keeping in view cost and right-of-way optimization. (Monopoles)
In distribution, a key trend is the installation of smart meters. This helps in reducing T&D losses and helps optimize the grid. Further, the deployment of smart meters is expected to accelerate with the deployment of rooftop solar in households on the back of government initiatives. Businesses riding these tailwinds:
1. Skipper LTD.
Over 50% of the order book is T&D
2. BAJEL
Bajaj Group Company - Spinoff from Bajaj Electricals
3. APAR Industries
One of the first companies to successfully test 765 KW & 800 KW conductors in India
Not only a domestic player - serves internationally
Proxy plays to the transmission and distribution sector as its projects are used across the value chain from Solar/Wind Cables to oils in transformers to conductors in the transmission line etc.
4. Techno Electric
Present across the power value chain with Flue Gas Desulphurization in Gencos, EPC player for Substations (T&D), and smart meter deployment.
Optionality from Data Centers deployment
5. Viviana Power
6. L&T
A leading EPC player in the field of power transmission, distribution, and solar energy.
Provides integrated solutions and end-to-end services ranging from design, manufacture, supply, installation, and commissioning of Transmission Lines, Substations, Underground Cable Networks, Distribution Networks, Power Quality Improvement projects, Infrastructure Electrification, Solar PV plants, Battery Energy Storage Systems, and Mini / Micro Grid projects.
The business constructs all types of power evacuation projects from concept to commissioning on an EPC basis with key focus areas being Air Insulated Substations (AIS) of up to 1200 kV and Gas Insulated Substations (GIS) of up to 765 kV.
Possess the capabilities to deliver transmission lines from design, manufacture, supply, construction, and testing to commissioning of EHV power transmission lines and turnkey solutions for the construction of microwave towers.
This is a very diversified company. Not an ideal choice if you are looking for exposure only to T&D opportunityBroucure: https://www.lntecc.com/media/wv4amofn/pt-d-ic-2023.pdf
7. KEC International
8. Kalpataru Projects International Ltd.
9. GE T&D
Grid Solutions and Electrification Software
10. Siemens India
Siemens Limited (“SL”) to demerge its Energy Business into a separately listed entity, Siemens Energy India Limited (“SEIL”)
11. ABB India
Offerings include digital and connected innovations for low- and medium-voltage, including EV infrastructure, solar inverters, modular substations, distribution automation, etc.
12. HITACHI Energy
Grid Automation: The Co’s grid automation business unit has a comprehensive portfolio of solutions ranging from substation automation, communication networks, grid automation services, and grid edge solutions to enterprise software solutions.
Grid Integration: The Cos Grid Integration portfolio has a wide range of transmission and substation applications. The Co’s grid integration unit has delivered more than 4,000 projects.
High Voltage Products: The Co. is a leader in high-voltage technology, offering a wide range of high-voltage products up to 1,200-kilovolt (kV) for AC and 1,100-kilovolt for DC.
Transformers: The Co. also offers a complete range of power transformers, traction transformers, insulation and components, digital sensors, and transformer services
(Source: Screener.in)
13. BHEL
Bharat Heavy Electricals Ltd is an integrated power plant equipment manufacturer engaged in the design, engineering, manufacture, erection, testing, commissioning, and servicing of a wide range of products and services for the core sectors of the economy, viz. Power, transmission, Industry, transportation, renewable energy, Oil & Gas, and defense. It is the flagship engineering and manufacturing company of India owned and controlled by the Govt. of India
14. Schneider Electric
The product portfolio includes Transformers, Power Transformers, Switchgears (Primary & Secondary Switchgears), Medium Voltage Switchgear, Protection Relays, Differential Relay, Electricity distribution management systems, a software suite for self-healing smart grid, e-House & smart cities applications.
15. Genus Power
Manufactures meters and provides metering solutions
Undertaking 'Engineering, Construction, and Contracts' on a turnkey basis
16. HPL Electric
TRANSFORMER MANUFACTURERS
*****
Invest in yourself…. be a learning machine
These communities have helped me a lot in learning the nuances of investing. Why not check them out? - Join the community of learners.
Supporting my work
This Substack will never be paywalled. I don’t want to accept voluntary payments for future unknown work.
But if you got this far, chances are you find my writing valuable. So please spread the word! Sharing, liking, and commenting all help spread the word!
Disclaimer: I am not SEBI registered. The information provided here is for educational purposes only. This is not a buy or sell advice. I will not be responsible for any of your profit/loss based on the above information. Consult your financial advisor before making any decisions.
Thanks for reading Pankaj’s Substack! Subscribe for free to receive new posts and support my work.
Valuable information.