The cutting-edge STATCOM order and what this means for Techno Electric.
STATCOM represents one of the most exciting opportunities in India's transmission space.
STATCOM, simplistically explained, works like a thermostat. It addresses
a transmission network's dynamic response requirements especially when
the network is periodically fed by renewable energy. The solution makes it
possible to deliver full reactive current even during voltage declines. Inefficient
power management can result in high network losses, network overloading,
unacceptable voltage levels, voltage inconsistency and even power outages. The
result is that power consumers get stable and consistent power at all times.
Over the last two decades, advancements in STATCOM technology based on the
voltage source converter concept have resulted in significant benefits. STATCOM
systems offer rapid response to systemic malfunctions, ensures improved voltage
and power system stabilisation, enhances reliability, real and reactive power flow
control, and increases power transfer limits. Even as a number of countries have
invested extensively in STATCOM over the years India has been a late entrant. Only
in the last year after the new government had assumed office did India begin
to invest in STATCOM, closing an important technology gap in its transmission
The STATCOM space represents a large opportunity. The Government plans to
install 50 STATCOMs at a total investment of around Rs 8,000 crore over a period of
three to five years.
Techno Electric emerged as the first service provider to win comprehensive
STATCOM orders aggregating Rs 268 crore at Solapur, Satna and Aurangabad,
jointly with the Chinese company Rongxin.
This successful order will serve as a formidable prequalification credential for the
Company to enjoy a head start towards acquiring more and larger orders over the
The 'Green Energy Corridor' represents India's most exciting sunrise opportunity.
India has commissioned 33 GW of renewable
energy as on December, 2014. The country now
expects to commission 250 GW (7.5x its retrospective
capacity) over the next seven years.
The Central Government has rolled out the ambitious 'green energy corridor' project
at an estimated cost of C430 billion to facilitate the flow of renewable energy into the
national grid. The project will be implemented with the assistance of Germany which
has promised to provide developmental and technical assistance worth Euro 1 billion for the
The Indian Government has already created green corridors in Rajasthan, Gujarat and
Tamil Nadu in the first phase followed by Maharashtra, Andhra Pradesh and Madhya
Pradesh in the second phase (funded by KFW, Germany).
What this significant green energy investment will require is more than just a linear
increase in generating capacity. The significant scale will warrant the creation of a 'green
energy corridor' to integrate renewable energy capacities into the national grid. The
'green energy corridor' will need to integrate renewable energy (solar and wind) with
conventional power stations.
This extensive integration will need players at ease with this specialised technology.
This extensive integration will need service providers who understand the complexities
of conventional and renewable energy.
This extensive integration will need service providers who have managed to combine
scale with sophistication.
Techno Electric is thus, at the right place at the right time.
Case in point: The Company reinforced its credentials in this niche through a 400
kV GIS solution in Tuticorin and a 765 kV AIS solution in Ajmer and Chittorgarh - a
cumulative Rs 370 crore opportunity to be delivered by March, 2017.
The EPC space continues to be the mainstay of the company's business, generating surpluses for downstream annuity investments.
If there is one word that is being discussed
with increasing seriousness within the
Indian government, it is 'transmission'.
Since the 10th Five Year Plan, India has added 1,16,307 circuit
kilometres of transmission capacity. PGCIL operates around 113,587
circuit kilometres of transmission lines and plans to spend Rs 1 trillion to
increase India's inter-regional power transfer capacity from 46,450 MW
to 72,250 MW by 2017. The capital expenditure planned by PGCIL for the
current year is Rs 32,500 crore (Source: Live mint, June, 2015).
The Company enjoys an entrenched presence in India's EPC space for
more than three decades. It has lent an able hand in the creation of
nearly half of India's installed thermal capacity. It has played a pivotal role
in building the country's national grid for interregional transmission.
Techno Electric has more than just showcased its competencies in
project execution, cutting-edge methodologies and timely project
completion. It has facilitated India's graduation to the next level of
When India selected to graduate from the 400 kV substation segment
to 765 kV and higher, Techno Electric provided the competence that
catalysed this transition. The result is that even as the 765 kV segment
now accounts for the largest portion of the orders, the Company enjoys a
leading position in this segment.
The result was that EPC order book grew from Rs 1,200 crore at the close
of 2013-14 to Rs 2,025 crore at the close of the year under review.