The state of India’s electricity infrastructure, both existing and planned, is a challenging one. With a swiftly growing population, often tightly packed into neighbouring suburbs, coupled with ongoing electrification to improve quality of life, the pressure on India’s grid mounts daily.
IEEFA expect India’s grid to require US$60-80bn over the next five years to service increasing demand and upgrades (1). Around the same investment again will be pumped into renewable generation to add 80GW of solar and wind by 2022.
Transport Minister, Nitin Gadkari, has set out ambitious targets for the electrification of India’s transport with proposals outlining that all two-wheelers be electric by 2025 – over 21 million were sold in the 2018-19 financial year alone. And the minister has set out similar plans for 30 per cent of cars to be electric too. (2)
Electrification, decarbonisation and the necessary grid upgrades to support these initiatives, present an opportunity for India to create a lasting legacy that could service the country for well over 50 years, if the right choices are made.
And that is the crux of the issue.
It is clear that many buyers, both private and public, feel increasingly hampered by the L1 tender framework when full-life costs are not considered as part of the process.
Does the existing framework ensure quality and safety?
The L1 tender framework rewards contracts to the lowest bidder. On the surface it’s a functional way to ensure competitive pricing if the selection of that product has also been based on analysis of the whole supply chain / project / life cycle. However, it’s clear that many buyers, both private and public, feel increasingly hampered by it when these full life costs are not considered as part of the process. Talking to industry colleagues at Elecrama, it’s clear to us that safety is increasingly front of mind. But the framework, which often requires the lowest bidder’s offer to be accepted without well-rounded consideration, does not always support these emerging ambitions. Increasingly, buyers want the option to weigh up a product’s quality, safety and total cost of ownership, which includes maintenance implications.
Some sectors are already beginning to make the move towards a safer way of procurement. In July 2019, Bengaluru’s Minto Ophthalmic Hospital hit the headlines when 24 patients suffered adverse reactions due to a drug procured under the L1 framework (3). The incident prompted a call for an exemption from the rule to allow the hospital to procure better quality, safer drugs with an existing reputation in the market. A positive outcome and one that could help other industries avoid their own near-death experiences.
India’s energy sector is one of them.
The sector uses the same framework and subsequently faces similar issues. But to add a further layer of complexity, it also has the long history of its infrastructure to contend with.
While India’s electricity industry has come a long way in improving standards and practices to close the gap between itself and its international peers, much of India’s electricity infrastructure still does not meet basic safety standards for manufacturing and maintenance. This is not helped by the lack of consideration for quality versus cost in the L1 framework, where the possibility of poorer quality materials slipping through would put the grid at risk.
It seems that the industry is missing an opportunity to ensure that the grid is fit for purpose – reliable, safe, and sustainable – both now and long into the future. In the context of the size of the investment, and how interlinked the modernisation of India’s economy is with these infrastructure goals, should India consider a different way of thinking when it comes to procurement? We think so and so did many colleagues we spoke to during Elecrama.
Moving to a more reliable and flexible grid that can support both renewable generation and electrification means investing in good quality materials and technologies.
A change in mindset
Moving to a more reliable and flexible grid that can support both renewable generation and electrification means investing in good quality materials and technologies that can safeguard the billions of rupees invested in the new grid. What’s more, this focus isn’t just important for new infrastructure, but will benefit India’s existing infrastructure too.
While substandard manufacturing and maintenance practices often create additional supply chain costs, so do less controllable factors like India’s inclement climate, where high humidity, monsoons and summer heat wreak havoc with poorly kitted infrastructure.
You might be surprised to learn that all these factors can be in part alleviated by procuring better quality materials that bring with them a multitude of benefits. In particular, the choice of insulating fluid used as part of every electricity network’s system of transformers can make an astounding difference to safety, reliability, risk and maintenance costs.
Why choose a synthetic ester transformer fluid
While synthetic ester transformer fluid is slightly more expensive up-front in comparison to its natural ester counter-part, it typically works out cheaper in the long run.
That said, because it is slightly more expensive, an L1 framework will often overlook its benefits in favour of an alternative that may not be as fit for purpose. This is in spite of many industry professionals being well versed on the benefits of ester fluids.
This is particularly important when the fluid is being used in older transformers that are less air-tight and are more prone to ruptures or leaks. A synthetic ester will give maintenance crews weeks, even months, to plan and execute a repair, whereas a natural product requires a much quicker response time before it oxidises, solidifies and impacts on transformer performance. Slower oxidation reduces the risk of failure overall and can also have a positive impact on reliability and uptime.
When high moisture tolerance is less of a necessity, the next consideration is fire safety and the need for network operators to safeguard against overloading. This is particularly important as India’s population continues to swell in already built-up areas without a proportionate increase in infrastructure to meet those needs. The choice then comes down to mineral, synthetic or natural esters. Again MIDEL’s 7131 fluid is one of the superior options, boasting a fire point of 316˚C which makes it almost completely fireproof, unlike mineral oil options.
Finally, synthetic esters are also readily biodegradable and non-toxic, which reduces the need for containment areas for new investments, and means that it can be safely stored and used in close proximity to the general public.
India is making great strides forward in modernising its economy, lifting millions out of poverty to improve quality of life. The country has big ambitions to do more and reliable, safe electricity infrastructure is key. With so much on the line, now is the time to revise procurement procedures so that the best materials can be used to help secure the country’s legacy to 2070 and beyond.
About the author: Steve Jones is Sales Director, MIDEL (www.midel.com)
