Recent advances in technology are promoting energy efficiency gains to slow demand growth
For the past four years, India has taken several initiatives for the growth of energy & natural resources sectors in India. How do you view the current Industrial Energy & Natural Resources scenario in India?
India continues to see growth in infrastructure, transportation, and other industries, which has contributed to an imbalance between India’s demand and supply of energy. India’s energy use is highly intensive and among the highest per capita. Even though India imports nearly 80% of its required oil, it is making equally large investments to discover new oil fields. Additionally, the government has set an ambitious target to curtail oil dependency and explore energy production through renewable means. Through its newly framed Independent Power Projects (IPP) policy and initiatives such as Make in India out of the Pradhan Mantri Ujjwala Yojana (PMUY), the market promises growth for different energy types including renewables and other cleaner fuels. Coal-based power plants will still exist, though a limited number of new plants will come online in the near future. With many existing plants completing their full life cycle and decommissioning of that capacity may potentially lead todemand for new plants. All of this presents an exciting environment and the opportunity to improve capacity and flexibility of power generation situations in India, which will drive growth for industrial energy companies and products.
What are the challenges India faces in meeting the growing energy demand?
India is a land of ample minerals and natural resources. The challenge India faces is meeting the growing energy demand while managing the risk of climate change. The Government of India (GoI) instituted many initiatives such as “24x7 power for all” and “Ujwal DISCOM Assurance Yojana (UDAY).” An attempt to revive debt ridden state electricity boards, UDAY has seen reasonable progress with some states making stronger tariff hikes. However, progress on other key fronts, including reduction in transmission and distribution losses, remains slow. This initiative (when supported with technology) yielded desirable results, which is beneficial, as the government wishes to electrify almost all rural villages in India. As one of the largest producers and consumers of energy, India has to create a sector that will be distinct, secure, affordable, and more sustainable and innovative with a focus on renewable sectors such as wind and solar. At the same time, it needs to improve the complete value chain efficiency of the traditional power sector, from mining to processing and distribution. Initiatives such asthe First Offshore Wind Project India (FOWPI) will definitely boost the power generation capacity while India develops its offshore capabilities. Electric vehicles will also transform highly oil-dependent public transportation infrastructure, which represents a major need. Growth opportunities are inhibited by the current ecosystem, and more time and investments are needed for these initiatives to becomea reality. Subsidies to IPPs will also be a game changer as most of the power generation and distribution is controlled by the government or its subsidiaries. Though oil will remain the primary energy source, India should explore possibilities where natural gas can lead the demand with cost-effective ways to reduce CO2 emissions.To achieve clean energy targets, the use of technology will be crucial. Recent advances in technology are promoting energy efficiency gains to slow demand growth, and open up new energy supply options, including unconventional oil,natural gas, nuclear, and renewables.
Cyient has executed projects across the globe. What are some of the international best practices you would like to see implemented in India?
Cyient provides services and solutions across oil and gas (O&G), process plants and product development for mining companies; as well as plant engineering, asset monitoring, and maintenance. The energy and natural resources sector is a very cyclical industry and in down cycles innovation is a necessity. Due to the O&G lull over the last few years, many global companies have been forced to operate leaner, find new efficiencies, and reduce investments in new capital projects. Throughout the lifecycle, we have seen a renewed focus on executing projects that deliver additional operational efficiency, enhanced asset utilization, optimization and maintenance, as well as improved throughput across the value chain. This lean model has weeded out some of the weaker companies, driving a higher rate of consolidation. Most global players are taking proactive measures and diversifying their portfolio and investments in non-traditional segments, such as wind and solar. The new capital projects that are approved are available only for the highest revenue and margin drivers. Many investments that are made drive OPEX savings to control their bottom-line. Another result of this lean market is finding new ways to implement automation within operations. While this contributes to direct cost savings, there are indirect benefits as well that include reducing errors, delays and safety issues. Small process improvements can yield huge results. On that note, safety continues to be the main priority for the industry. Some recent best practices we have noted include using the Internet of Things (IoT) and analytics to solve safety challenges and stay ahead of potential operating threats. Cyient has taken note of these best practices and expanded its comprehensive asset management solutions by integrating asset life-cycle decision techniques, enhanced by engineering functions and data analytics, to increase the net value derived from physical assets. Enabling increased availability of assets occurs through individual asset and system-level reliability studies and recommendations. There are also small process efficiencies that have a cascading effect on the overall lifecycle and yield large tangible outcomes related to productivity, turnaround optimization, data integration, and optimized OPEX. The general operational efficiency is lower in India when compared to global peers, thus companies have numerousopportunities to implement these practices.
What solutions does Cyient offer for the oil and gas industry in India? How can India mitigate the effects of price volatility in the oil and gas sector?
Cyient offers end-to-end multidisciplinary design and process engineering services and solutions across upstream, midstream and downstream sectors. We provide front-end engineering and design support, which includes process engineering, equipment definition, plant layout and cost estimation models as well as detail engineering services in mechanical, piping, instrumentation and controls, civil, structural and electrical engineering. We have completed many as-built engineering and asset management projects. With the industry focus on digital transformation, Cyient has invested heavily in IoT and data analytics solutions with core expertise on embedding intelligence in assets, connecting intelligence through data acquisition and creating actionable intelligence with predictive analytics. India imports nearly 80% of its required oil, which is becoming more deregulated, and has some of the highest gasoline and diesel taxes. While little can be done to mitigate these facts, there is an increasing focus on OPEX efficiency in the market. The exploration and refining sectors could benefit greatly from technology and service solutions that decrease maintenance costs, improve asset uptime, and reduce safety risks. Increased margins from operations efficiencies create opportunities to reinvest in new technology platforms and other sectors to diversify and change the demand structure.
How are analytics, data infrastructures and the digital transformation changing the industrial energy & natural resources sectors in India?
There are two important considerations related to this question. The first is that the Government of India has allowed 100 percent Foreign Direct Investment (FDI) in the mining sector and exploration of metal and non-metal ores under the automatic route. The second is that in 2018-19 budget, the Government of India allocated close to US$30Bn towards smart cities and renewable energy. These have the potential to influence a positive change in the industrial energy & natural resources sectors in India and require the kind of technology, efficiency improvement and return on investment that digital solutions can provide. “Digitalization” will be in the forefront of such technological advancements changing the way we develop new projects, enhance operational efficiency, drive transparency in governance and finally deliver cost benefits and better services to the citizens. For example, there are states in India where estimated distribution losses are in excess of 20 – 30%. With implementation of the right digital infrastructure and analytics, such losses can be reduced by effectively identifying high loss areas. The other big change due to digital transformation including IoT, analytics and mobile technology is that industry players of various sizes and capabilities will need to collaborate and deliver projects to survive in the long term. An example of such change is technology companies like Cyient and many start-ups are now working closely with Indian power and mining corporations on technology intensive areas such as mine planning, asset management and fleet management. Finally, many companies are identifying how these technologies will deliver return on investment and opting for incremental improvements vs. large-scale implementation. Our clients are at different phases in their IoT lifecycle, from just beginning to consider what digital could mean for them to full IoT product platforms and offerings. The digital transformation is also opening communication lines between intercompany functional groups that traditionally operated in silos. Engineering, research and development, aftermarket products and services, warranty management, customer service, health and safety, and even sales are all finding common ground and value by leveraging data to deliver new insights.
How is Cyient helping to change the landscape of India’s industrial energy & natural resources sector?
We are involved across every major segment of the energy and natural resources sector in India, working with clients across the value chain covering exploration companies, operators, industrial equipment original equipment manufacturers (OEMs), power generation OEMs (including nuclear), and engineering, procurement and construction companies,just to name a few. Helping our clients tackle new opportunities by leveraging technology like IoT, predictive analytics, asset management and data collection and/or solving operational inefficiencies with artificial intelligence, machine learning, andunmanned aerial vehicles and drones enables us to make an impact. With its vast experience in advanced technologies, Cyient brings cross-pollination of ideas between different sectors and geographies, thereby helping customers deploy world-class design and achieve higher operating efficiencies. We also have an internal group focused on bringing new technology solutions to market and solving the problems that matter - to our clients and tosociety.
@EPC World Media
