Do you see a revival in the current scenario after the impact from Covid-19? Have you witnessed a pick up in the order Inflow?
In this business, we work from our order backlogs. These are moving. Yes, there are some delays as far as fresh order inflow is concerned. But we have had a strong order book which helps. Last few quarters have not been very idealistic in India. However, the next tranche of Green Energy Corridor projects will give certain transmission line opportunities. Several State TRANSCOs including the ones in South India have come up with certain projects. There are green shoots all around. As we have completed electrification of households the focus of distribution has now shifted to power quality and reliability. But, the projects from the much awaited Revamped Results Linked Distribution Scheme are yet to take off. Internationally, with oil prices hovering above $70, order finalization in Middle East seems strong. However, the customers in Middle East too have become very selective and careful about which projects should be taken up but once the decision is made they progress well, one such example is Saudi Arabia. We also see a lot of prospects coming in from Thailand and Philippines.
You mentioned about power quality and reliability above. Are there any opportunities there?
As far as last mile connectivity is concerned, the electrification has reached even the remotest places. Naturally, now the questions are whether 24 x 7 electricity is available in all the places, is there a voltage dip, whether the frequency of power supply is within the acceptable limits. So, the focus of Government is on improving reliability, availability and quality of power supply and bringing in certain discipline with DISCOMs. That will require High Voltage Distribution Systems, Segregation of agriculture feeders, advanced metering, etc. For example, to ensure disaster resilience, the coastal towns are converting their overhead lines into underground cable networks. We have done such projects along the entire stretch of East coast starting from Cuddalore in Tamil Nadu through Vizag, Bhubaneswar to Digha in West Bengal. SCADA and Distribution Automation are being increasingly adopted. Privatization and franchisee modes have been proposed. As the fund disbursements are proposed based on reforms and results, there is a turnaround likely. Also, the aspiration levels of our people are on the rise. The electricity consumption and with it the need for reliable, affordable, sustainable power will only increase.
What are the new areas of business that are emerging in the power sector for L&T?
The game changer for this sector has been ‘Renewables’, with climate change receiving a lot of attention. We started doing Renewable projects more than a decade back, starting with rooftop solar for the entire campus at Chennai. Today, as an EPC, we currently execute more than 3 GW Solar projects in India and abroad, for customers like ACWA, Masdar, NTPC, NHPC, GSECL etc. We have done electrification in remote districts of Bihar with Battery Energy Storage based Microgrids. We have set up BESS containerization yard at our Kanchipuram works where we integrate batteries with our in-house developed Energy Management System, test bed, etc, and offer a customized solution. In Andaman Islands, we have designed and executed one of the largest operating storage capacity of 16MWh, for NLC. For Islands, Solar cum BESS is a very desirable solution considering that Diesel is the other alternative. As round the clock power supply gains currency and reliability of power supply being given attention, we have built capabilities for offering Distribution Management System related solutions. So, we are well prepared for the green energy transition, having gathered experience both at the large scale Solar PV plants and at the microgrid level.
What is the proportion of renewable energy projects vis-à-vis the conventional part in the backlog of your vertical?
When we talk about our Green Portfolio we need not limit to the Solar EPC alone but should also include the substations and transmission lines associated with them for evacuation of renewable generation. Also, efficient Transmission & Distribution network is a major component of energy efficiency. Our distribution footprint is quite large as we have electrified, say 10% of villages in India, over the last decade and have modernized distribution systems across several towns. I can confidently say that more than 30% of our order book is from such green portfolio of projects.
What are the offerings and new technologies being used in the T&D space by L&T?
In the last 5-6 years, many states have indeed upgraded their transmission and distribution (T&D) networks. The focus earlier has been on intra-state links, with Power Grid focusing on ‘One Country One Grid’ which eventually became a success. At L&T, these are exciting times for us with advancements in technology. Being at the cusp of technological changes, we have brought in digitalization to a great extent in our business operations as well. Drone stringing, LiDAR surveys, AI / ML based contract document processing, advanced project management tools, etc, have become a norm.
In Power T&D space, the digital solutions are more of Operation Technology (OT) than IT. We at L&T have developed our own team; we use our domain knowledge and engineering expertise and offer OEM-agnostic solutions. Though some clients still have preference for specific manufacturers, but we have the capability to integrate products and systems from different vendors and give an optimum solution. True to our EPC nature, we stand guarantee for an efficient delivery of the most-suited solution matching right products.
What are the advancements that can be envisaged for a futuristic development?
Compared to advance economies, the reliability and quality of our power supply has to greatly improve. The power supply interruptions, in a whole year, may not exceed few minutes in such places. For that we require redundancy built in at various voltage levels of transmission, sub transmission and distribution. We need intelligent systems that control and remotely manage these systems. With huge amount of renewable generation getting added, we require grid stability FACTs devices like STATCOMs. Also, with our net zero commitments, we should adopt Electric Vehicles in a big way. The charging infrastructure has to be built to reduce range anxiety and related grid strengthening should be done.