NATURAL GAS GENSETS
The government of India’s keen observance of causes of pollution and reducing the effects of industrial emission levels. In 2018 the National Green Tribunal (NGT) made a recommendation to the pollution control agencies under the Central Pollution Control Board (CPCB) to decrease emissions emanating from industries. To facilitate, it was suggested that any industry using a boiler, furnace, or Genset that uses solid or liquid fuel should move to Natural Gas which is less polluting and more cost-effective. Specifically, any Genset below 800KW should (a) install an emission control device or (b) replace it with a Natural Gas Genset or (c) retrofit the existing Genset for partial gas usage.
Indian manufacturers, homes, hospitals, malls, hotels, data centers, educational institutions have always used diesel-powered gensets for backup power that kick in at the time of a power outage. Companies like Cummins, Perkins, Volvo, MTU, Kirloskar Oil (KOEL), Caterpillar, Ashok Leyland (Leypower), Mahindra Powerol, Eicher, Greaves Cotton, and imports from China have dominated the 142,857 gensets sold annually in the Indian market. Mahindra has been the foremost supplier in the low horsepower (LHP) segment having sold in excess of 100,000 units to the telecom industry for powering cellular towers.
The slowdown in the telecom industry and infrastructure projects impacted sales which declined to 30,000 units of low horsepower Gensets in FY2018. Expected growth in industry volume in 2018-2021 to be 10% CAGR. This growth would be driven by rising demand in the key end markets of infrastructure (roads, metro rail, railways), commercial (IT, ITES, Data Centres, Hotels, malls, hospitals, educational institutions), and manufacturing.
Growth in the Genset industry is linked to base power deficit and as a backup in the commercial, industrial and residential sectors. This standby power is considered to dominate the Indian market and is presumed to be the fastest-growing operating segment as it offers instantaneous power backup to all major electrical, mechanical, and electronic devices in order to function and perform non-stop operations.
A revival in economic growth would drive up both manufacturing and power deficit, in turn resulting in higher demand for Gensets as a hedge against any power cuts.
The usage of Natural Gas Gensets to generate power is expensive. While the cost of power produced by renewable sources has declined to Rs.3/unit, and the cost of power produced by using coal is Rs.4/unit, the cost of power produced by using Diesel Gensets is approx. Rs.27/unit due to the rising diesel prices. However, 85-90% demand for backup power using gensets would continue given that the power distribution network is still patchy in India and breakdowns take an indefinite time to repair. Apart from the cost, transporting diesel is a recurring job because it has to be brought in by road tankers and stored in underground tanks. Finally, given the trend of environmental awareness, diesel is also considered to be a major air pollutant.
It is for these reasons that installing Natural Gas Gensets or moving on to other renewable resources seems like a rational, economical and practical option.