The market for power conductors is set to boom in the XII Plan period thanks to a much higher power transmission outlay. With private sector companies lending a supporting hand in mega transmission lines, demand for power conductors is expected to soar. It is not just a case of volumes growth, power conductors in the coming years will be even more technologically advanced, notes Venugopal Pillai.

The power conductor industry is very likely to see impressive growth in the XII Plan period, thanks to a much higher outlay for the power transmission sector. According to estimates, the power transmission sector is expected to see investment of 2,40,000 crore during the XII Plan period, which would be over 70 per cent higher than the comparable 1,40,000 crore in the ongoing XI Plan period. Power generation, which has been the focus in the X and XI Plan periods, is seen making way for power transmission & distribution in the XII Plan. Needless to say, the power conductor industry stands to gain tremendously.

According to industry experts, 25 per cent of the total cost of a typical power transmission project is towards conductors. Going by this, the business opportunity size for power conductors in the XII Plan would be Rs.60,000 crore. The total opportunity arena could be much higher than this considering that conductors also find minor application in power distribution (sub-transmission) projects. Given that the total investment outlay on power distribution in the XII Plan is 4,00,060 crore, even if one considers a small fraction of this outlay, the total opportunity size for power conductors in the XII Plan could even be in the region of 70,000 crore.

Preliminary estimates suggest that the total expenditure on power conductors in the ongoing XI Plan period would be in the region of 31,000 crore. This lower-than-anticipated figure is possibly because several mega power transmission schemes on which physical construction work was expected to begin in this Plan period, are seen spilling over to the XII Plan period. Nevertheless, one can safely assume that the market for power conductors would roughly double between the XI and XII Plan periods.

POWER SECTOR OUTLAY
(` crore)
	XI Plan	XII Plan
Generation	591,734	495,082
Transmission	140,000	240,000
Distribution	309,077	400,060
Others	18,104	---
Total	1,059,515	1,135,142

ROLE OF PGCIL
Central transmission utility Power Grid Corporation of India is the single-largest buyer of power conductors in India. It is estimated that PGCIL accounts for 40 per cent of the total domestic consumption of power conductors. The good news for power conductor manufacturers is that PGCIL, in line with overall trends, will be substantially expanding its investment outlay in the XII Plan period. PGCIL is expected to incur 1,00,000 crore of capital expenditure in the said period, which would nearly twice the estimated 55,000 crore for the XI Plan period.

Typically, conductors account for 25 per cent of the total capital expenditure of PGCIL. Going by this metric, PGCIL alone would be providing a business opportunity of 25,000 crore to conductor suppliers in the XII Plan period.

PGCIL's main project is creation of the National Grid that would seamlessly connect power-generating and power consuming regions in the country. By March 2012, PGCIL is expected to create inter-regional transfer capacity of 37,500 mw. This capacity currently stands at around 23,000 mw. The National Grid envisages the use of extra high-voltage lines, apart from the conventional 400kV lines. Hence, in the coming years, the demand for conductors would be higher as the focus would now be on 765kV, 800kV and even 1,200kV transmission lines.

Apart from driving volume growth of conductor manufacturers, PGCIL is also responsible for elevating technical standards of power conductors. For instance, PGCIL now stipulates high temperature-resistant conductors for its projects, which currently only leading domestic suppliers are currently capable of providing.

In volume terms, reliable estimates suggest that PGCIL would have a "stringing" requirement of 16,000 km per year, for the next five years. For a frame of reference, the comparable requirement of state transmission utilities and independent power transmission companies together would be 6,650 km per year. While state utilities would be focusing on 220kV lines, the thrust of PGCIL would be on 400kV and higher voltage lines.

As of December 31, 2010, India had 132,413 ckm (circuit km) of 220kV lines, 92 per cent owned by state government utilities. As of the same date, the quantum of 440kV lines stood at 102,912 ckm, out of which 66 per cent was under Central ownership, mainly PGCIL. Central agencies did well to more than double their 440kV network from 29,345 ckm as of March 31, 2002 to 68,423 ckm as of December 31, 2010. It is also noteworthy that private transmission lines, including those set up in joint venture with government utilities, have made a beginning in the XI Plan. As of December 31, 2010, private sector or JV companies had 4,558 ckm of 400kV lines, apart from making a small contribution to 220kV infrastructure.

Electrical Monitor undertook a study, based on official data, on power conductor purchases by PGCIL. The study found that during 2010 (January to December), the Central transmission utility spent 1,107 crore on procuring conductors, representing a significant share of the entire procurement. Purchases were made from over ten suppliers with Sterlite Technologies Ltd accounting for a little of 50 per cent of the total value.

Bare conductor, insulated cable

Bare overhead conductors used in power distribution can lead to theft of electricity. However dangerous and lethal it could be, overhead lines are "tapped" and electricity stolen. Electricity theft is quite common in India, and is seen mainly in suburban areas. Over the years, there has been a gradual move to shift from conductors to cables, with a view to stemming electricity theft and also to address other issues like safety. In many urban areas, power utilities are converting overhead distribution lines to underground extra-high voltage cables. Underground cabling makes power theft virtually impossible. The occurrence of faults also reduces drastically. Responding to the need of producing EHV cables (usually exceeding 66kV), several Indian cable manufacturers have tied up with leading global names to produce EHV cables, even exceeding 220kV. Some such partnerships that recent years have seen are: Prysmian of Italy with Ravin Cables; J-Power of Japan with Finolex, Nexans of France with Polycab, Brugg Kabel of Germany with KEI Industries, etc. Till the advent of multinationals, Cable Corporation of India Ltd was the sole Indian producer of EHV cables. Diamond Power Infrastructure Ltd, a leading name in conductors, has also planned to produce EHV cables in foreign technical collaboration. Laying underground EHV cables is much costlier than setting up overhead lines. The process of digging also interferes with other underground utility infrastructure like water pipes, sewerage lines, telecom cables, etc. All the same, power utilities are keen on underground cabling wherever possible. The fact that underground cables obviate power theft, their benefits in the long-term are immense. In areas where laying underground EHV cables is impracticable, there is an alternative called aerial bunched cables (ABC) which are used in place of bare overhead conductors. Apart from power theft, the use of aerial bunched cables has several advantages like high degree of safety, lower fault rates, flexibility in relocation, etc. Some experts feel that bare overhead distribution conductors would eventually be replaced by insulated cables (either underground or overhead), in the coming years. The long-term positive impact of insulated carriers of electricity is too significant to be ignored, they feel.

THE SUPPLY SIDE
The Indian market for power conductors is by and large an organized one, with three players dominating the market. Sterlite Technologies Ltd is by far the industry leader, followed by Apar Industries Ltd and Diamond Power Infrastructure Ltd. These three companies together account for 70 per cent of India's power conductor market, with the remaining 30 per cent shared by a large number of smaller players spread nationwide. As of today, the power conductor market is estimated at some 5,600 crore.

Sterlite is currently the largest manufacturer of power conductors in the world with a cumulative annual manufacturing capacity of 160,000 tonnes per annum (tpa), across three facilities in Rakholi (Dadra & Nagar Haveli), Hardwar (Uttarakhand) and Jharsuguda (Orissa). In keeping with the growing demand for power conductors in both the domestic and international markets, Sterlite is considering further expansion of capacity to 200,000 tpa.

STL is a significant contributor to the global power sector through indigenous manufacture of a complete range of power transmission conductors at extra high voltages (400kV to 800kV), high voltages (66kV to 220kV) and power distribution conductors (11kV- 33kV). Back home, it is estimated that PGCIL meets nearly 35 per cent of its requirements from supplies made by Sterlite.

Sterlite: Forward leap

Sterlite Technologies Ltd, which is India's largest power conductor manufacturer with an incipient capacity of 2 lakh tpa, is fast emerging as a leading independent power transmission company. As of mid-March 2011, STL had won three mega interstate power transmission lines, including two 765kV and one 400kV, through tariff-based competitive bidding. The company would be developing over 2,000 km of power transmission corridors through these three projects with a combined investment of around `3,000 crore.

Mumbai-headquartered Apar Industries Ltd ranks second in the power conductor business. Currently, it has an installed capacity of 73,000 tpa coming from two units- at Silvassa (Dadra & Nagar Haveli) and at Natagarh (Himachal Pradesh). Apar has planned to increase the capacity of its Silvassa unit by 10,000 tpa. It is also planning a greenfield unit in Orissa with an investment of 25 crore. Both the projects will add around 25,000 tpa of capacity, in the first phase. The 10,000-tpa capacity expansion at the Silvassa unit will be towards hightemperature conductors, and is expected to commission very soon while the greenfield Orissa unit is likely to turn operational by September this year.

Gujarat-based Diamond Power Infrastructure Ltd is believed to the third largest player in the Indian power conductor market, with an installed capacity of 50,500 tpa. It has two units, situated at Savli (Gujarat) and Silvassa (Dadra & Nagar Haveli). The conductor business of DPIL benefits from the company's own aluminium wire rod unit. Apart from power conductors, DPIL is engaged in several other areas like wires, power cables, transformers, transmission towers and EPC contracts in the T&D sector.

With growing demand for power conductors in the XII Plan and beyond, it is expected that even smaller players would ramp up capacities. Even newer companies could join the manufacturing pool. However, by current thinking, the three aforementioned companies are expected to control over 50 per cent of the power conductor market in the foreseeable future.

TECHNOLOGY
In recent years, the power conductor industry is seen imbibing technological advancements with the help of global solution providers. Two cases in point are those involving international companies like CTC Cable (a subsidiary of Composite Technology Corp) and 3M.

In December last year, CTC Cable agreed to an initial six-year partnership with Sterlite Technologies under which Sterlite will manufacture CTC's ACCC conductors for sale in the Indian market. Under the terms of the deal, which can be extended beyond six years, CTC Cable can also work with Sterlite to manufacture ACCC conductors in other markets as well.

ACCC conductors use CTC's carbon fiber core, which is delivered to manufacturers who produce and distribute ACCC conductors to operators of electrical grids around the world. ACCC conductor technology increases current delivery and reduces transmission losses, therfore being ideal for both upgrading existing power lines as well as building new ones, it is learnt.

Aluminium versus Copper

With the recent meteoric rise in copper prices, designers, specifiers and installers are finding that aluminium is cheaper than copper when used in power cables. There are however certain important consideration to keep in mind. Both aluminium and copper conductor types are available and used in power electric cables in South Africa. Naturally cables using aluminium conductors would require a larger conductor size, and would have a greater OD than cables using copper conductors, for the same current. For example, to carry a 3-phase current of 210A (ground), one would need a 70m² x 4 core copper conductor cable. The equivalent aluminium cable would be a 120mm² x 4 core. The cost of the copper conductor would be more than twice of the aluminium equivalent. While the price advantage seems to make changing over to aluminium an obvious choice, there are certain factors which need to be carefully considered. Most accessories (lugs, ferrules, connectors etc) and electrical equipment (circuit breakers, fuse holders, switches, etc) are generally designed for use with copper conductors. When using Aluminium conductors with such equipment, special bimetallic accessories (ferrules and lugs) must be used to avoid the connection becoming loose and resulting in a high resistance connection (or 'hot' connection). This looseness is caused by the different temperature coefficients of expansion between copper and aluminium that happens during heat cycling. On cooling an aluminium conductor in a copper ferrule will contract more than the copper, becoming loose and soon thereafter becoming a 'hot' connection before burning off. There has been extensive experience of this and in some cases serious fires have been the result. When crimping copper ferrules or lugs, indent crimping is common on small sizes, while hex crimping is used on larger conductor sizes. It is important that the correct die type and size is used. In addition the tools must be compatible with the crimping tool. When crimping aluminium ferrules or lugs, deep indent crimping is preferable, in order to break the aluminium oxide layer which will have formed on the conductor. Whilst aluminium is claimed to exhibit excellent corrosion resistance, this is true only for dry indoor situations, or where drying is rapid in outdoor installations (for example on overhead lines). Corrosion of aluminium conductors is a major problem in damp outdoor installations. Exposed aluminium conductors must be kept dry by sealing with heat shrink tubing or other covering. Remember that outdoor minisubs, pavement kiosks, streetlamp pillar boxes etc are usually not dry and the use of aluminium conductors in such installations is not recommended. Where vibration is present, and this includes connections to electric motors, transformers, minisubs, etc, aluminium conductors will be more susceptible to vibration cracking than copper. This problem is well understood by overhead line engineers, who take preventative measures by installing "Stockbridge" dampers on lines where Aeolian vibration is possible. Vibration damage is even more important when solid aluminium conductors are used. With regards to electric cable, generally people tend to stick with what they have in stock and where their skills are. So when a lot of copper cable is being used, it would probably not be wise to mix this with aluminium cable, unless the skills are available to understand that different jointing and terminating technology is needed for the different cable types, and not to confuse the accessories for each type. (Adapted from a technical note available on www.ecasa.co.za)

Earlier, in November 2009, Tata Power Company, India's oldest and largest private-sector electric utility, chose installation of 3M Aluminum Conductor Composite Reinforced (3M ACCR) to substantially increase electricity transmission capacity on its 110kV Borivali- Malad and Salsette-Saki transmission lines near Mumbai, in place of existing ACSR conductors, without the need to construct new transmission lines towers, as the right of way available was inadequate. The innovative lightweight, sag-resistant overhead conductor can carry twice the amount of electricity compared with conventional steel conductors of the same diameter.

SUMMARY & WAY FORWARD
Ideally speaking, every rupee invested in creating power generation facilities needs a matching investment on the T&D side. Historically, India has never kept up to this ratio with T&D investment barely being half of that on the generation side. It is only now that T&D is getting attention. The major 2,40,000 crore investment outlay for power transmission in the XII Plan is an excellent manifestation of India's intent to improve its transmission facilities. Even on the power distribution side, the projected investment, which would be over 4,00,000 crore in the next Plan period, seeks to compensate for the long years of neglect.

The sheer growth in plan outlay for power transmission would be the biggest demand driver for power conductors. Large players would also benefit from the exports market, with a strong demand seen in developing African nations. Going forward, it is expected that leading domestic conductor manufacturers would significantly ramp up capacities to serve the growing Indian and export markets. The XII Plan is likely to see 60,000 crore worth of business opportunity for power conductors, a big jump from an estimated 31,500 crore in the ongoing XI Plan period.

The power transmission industry is also witnessing increasing private sector participation. Thus, India can look forward to a new class of developers complementing Central transmission utility Power Grid Corporation of India. This will result in faster and stronger demand creation for power conductors.

The coming years will also see the emergence of efficient technology. With India expected to soon move to the 1,200kV regime, power conductors will need to be technically far more superior. Besides, with right of way being a perennial issue of concern mainly in urban areas, replacement of existing conductors with superior ones, without expanding the geographical footprint, will become the norm. Already global names in advanced conductor technology, such as 3M and CTC Cable, have made their presence felt in India.

India is endowed with aluminium, and hence raw material does not appear to be the concern. Besides, aluminium prices are known to be lesser volatile than copper, which is much to the benefit of conductor manufacturers. The production process is not very complex, and hence there could be new entrants in the manufacturing business, mainly for power distribution conductors like AAC and AAAC. As power distribution conductor manufacturers will need to deal mainly with state distribution utilities, they would have to efficiently manage their working capital requirements as payment cycles of state utilities tend to get delayed.

LEADING POWER CONDUCTOR COMPANIES
Company	Capacity	Manufacturing Locations
	(tpa)
Sterlite Technologies	160,000	Orissa, Uttarakhand, D&N Haveli
Apar Industries	73,000	D&N Haveli, Himachal Pradesh
Diamond Power & Infrastructure	50,500	Gujarat, D&N Haveli

Going forward, the case for using underground EHV cables or overhead aerial bunched cables, in place of bare overhead conductors, could get stronger. As more and more urban power distribution circles get into private sector hands, the inclination to use superior and cost-effective technology, despite the high initial costs, would naturally get sharper. This could somewhat diminish the market size for distribution conductors, but all for a good cause. However, for power transmission conductors, mainly ACSR conductors, prospects are very encouraging. In summary, conductors are set to score high in the Indian power play.

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