The power supply situation in
India has two primary
concerns—quantitative and
qualitative. There are not only power
shortages but even the quality of
power supply is not up to the mark.
This explains the need and the
existence of a very large industry—
generally referred to as the "power
backup" industry—that not only
ensures power supply at all times but
also makes sure that the raw grid
power supply is filtered into true sine
wave (pure) quality. Hence, the power
backup equipment is often referred to
as a power conditioning equipment.
It is estimated that lack of quality
power is chiefly responsible for
damage to sensitive electronic
hardware like computers, printers,
medical and telecom equipment, etc.
The power backup industry is
estimated to be over $1 billion and
includes batteries (at the lower end) and
uninterruptible power supplies (UPS) and
inverters at the higher end. In the Indian
context, UPS and inverters are the major
power conditioning equipment used,
depending on the nature of application.
A UPS refers to a power backup
system where the backup power
duration is very limited, usually less
than an hour. The UPS system can be
online, which is connected to the load at
all times, or offline where the UPS
comes into play only when there is a grid
supply failure. The reason why the
power duration time in UPS is limited is
that there is a backup system like a diesel
generator that comes into play very
soon after grid supply fails. In the Indian
context, the online UPS finds major
application and is used in desktop
computers, hospitals, data centres,
telecom exchanges, etc.
A typical backup device like UPS or
inverter has two major components—
battery and power electronics. Due to
a lower backup time, the battery
accounts for only 30 per cent of the
total system cost, unlike in inverters
where backup time is much higher.
An inverter refers to a power backup
source where the backup time is
usually high, ranging from one hour to
eight hours. Inverters are used in areas
where there are planned power cuts
and load shedding. Inverters have a
much higher rating in terms of kVA
and the battery accounts for up to 60
per cent of the system cost.
The total market size for UPS and
inverters is estimated to be around 6.5
million units per year. Out of this,
around 35 per cent is accounted for
UPS in the sub-5KVA range. Within
this, 70 per cent is taken up by the sub-
600VA range, which typically finds
application in desktop computers.
The demand for low-rating UPS is
linked to the growth in desktop
computers. The UPS segment saw its
highest annual growth of around 18-
20 per cent in the 5-6 years prior to the
global recession of 2008. In 2009 and
2010, the growth rate nearly halved.
Experts feel that the spurt in the sale
of laptops, notebooks and netbook,
has resulted in lower desktop sales.
This has depressed the sale of UPS,
mainly in the sub-600VA category.
The highest revenue earning segment
is the 10-100kVA segment coming
from industrial UPS like the online
and line-interactive systems.
Leading players catering to the
Indian UPS market are APC (a unit of
Schneider), Emerson, Numeric Power
Systems, DB Power, Eaton, etc. These
five players account for half of the
market size, in terms of revenue.
The market for inverters is much
smaller than UPS in volume terms. An
estimated 1.8 million inverters are
sold in India per year with over half of
them in the 1.5kVA range. Power outages (planned power cuts) are the
main business driver for inverters.
Sales of inverters pick up in the
summer season when power
shortages peak. Over the past few
years, a trend of purchasing higherrating
inverters-those that can
support air conditioners apart from
other low-wattage appliances-is being
seen. Just like the UPS segment, the
inverter is also flooded with
unbranded products, mainly in tier-II
and tier-III cities. The power
electronics that goes into inverters is
usually sourced from China and
Taiwan, with the domestic
manufacturing base virtually absent.
There is tremendous pricing pressure
which results in domestic products
unable to compete with imported
(Chinese) brands. This has brought
about a situation where
manufacturers find it profitable to
simply trade in imported inverters.
Outlook: The market for UPS,
inverters and other power
conditioning equipment will
continue to remain upbeat, although
the high growth rates seen in the pre-
2008 period might not be sustained.
Although India has aimed at
attaining a "power for all" situation
by March 2012, power shortages are
likely to persist in the foreseeable
future. Besides, pure quality power is
still at a distance, which means that
power conditioning equipment
would be used more for the
"qualitative" aspect, even if not for
the "quantitative" one.
The IT and IT-enabled service sectors
will continue their high growth rates,
which means that industries like
telecom, banking and financial services,
data centres, etc would continue to
drive demand for UPS and inverters.
Even healthcare—a sector that needs
uninterruptible power supply and pure
power to protect sensitive equipment—
will significantly drive demand.
To some extent demand for power
conditioning equipment will subside
with the advent of battery-operated
devices. An important example of this
phenomenon is the advent of laptops
and netbooks that saw sales of desktop
computers slide. This in turn
diminished demand for UPS.
One trend that experts feel would
emerge in the coming years is efficient
and greener equipment. A solar powered
inverter is a case in point.
Currently, these inverters are expensive
but as technology evolves, they might
become more affordable.
While one can be assured of a steadily
growing demand for power
conditioning equipment in India, there
are concerns about the maturity of the
industry. There is very little production
of power electronics components in
India. As such, India is heavily
dependent on imports. There is need for
the component industry to evolve,
which can make the industry survive
the onslaught of imported equipment
from China and Taiwan where the
industry is fully integrated.