The demand for alternators in Indian market and the impact of Pandemic on the Power sector

Sameer Wagh
Sr. General Manager – Sale, Distribution, Service &  IT

Mecc Alte synchronous Alternators coupled with a prime mover are used for power generation. 

  • On the basis of end-use segments, the market has been bifurcated into commercial, institutional, industrial, residential & agricultural sectors. Among these, the commercial sector accounts for the majority of the Indian market. 
  • On the basis of fuel, non-renewable fuels such as fossil fuels, such as diesel, gas, coal, etc., represent the biggest segment. They are followed by natural fuels which include wind, water, solar, etc. 
  • On the basis of voltage, 220-440V alternators represent the largest segment, holding the majority of the market share. 220-440V alternators are followed by >440V and <220V.
  • The market has also been segregated on the basis of rated power into < 1, 1kVA-5kVA, 5kVA- 30 kVA, > 30 kVA-500 kVA, 500 kVA-1500 kVA, 1500kVA-5000kVA and > 5000 kVA. Amongst these, the > 30 kVA-500 kVA segment accounts for the majority of the market share, representing the leading segment.                               

The evergreen commercial market forms the base market and is topped up by other segments like the industrial, institutional, agricultural which keep varying.

Commercial applications are further subcategorized into retail establishments, telecom towers, hospitals, hotels, and others. Telecom sector resurge started in 2006-2007 and had remained buoyant for a decade before stabilising, but can see a resurge in the near future due to government initiatives in the Digital Communication Policy. 

Till the beginning of COVID era, synchronous Alternator market grew at a CAGR of @ 5 % in the last decade and is projected to demonstrate a CAGR of 10% in the next decade.

The power sector witnessed significant impact although power-related services come under the essential services category. While COVID-19 related restrictions are easing, parts of the economy are starting to reopen and recover; Government has started withdrawing all restrictions except few, but again its huge uncertainty still continues to prevail regarding what the future will look like.

The demand for power fell steeply on account of the drop in commercial and industrial activity. The supply followed suit with marginal generators shutting down. Surprisingly, renewables increased its relative share in the generation mix. 

Drop in sales @ 20 per cent during the lockdown, led to a drop-in revenue from the Commercial and Industrial segments and revenue collections declined by over 80 per cent, significantly affecting the financial and liquidity position of players in the sector. Now, demand has started to recover as the lockdown is being eased out and as facilities are opening. In addition, the liquidity infusion announced by the government has eased out the immediate cash stress. 

Also, the awareness and acceptance to digital technologies has increased worldwide, one example is the drive for online systems and tools even as basic as online file management required for business continuity and effective functioning.

The Diesel Generator and hence the synchronous Alternator market follows the Power sector in India and it is no stranger to crisis. Having suffered due to government efforts towards lowering the greenhouse gas emissions, vexatious regulatory inconsistency and rising petroleum prices. Even then, the challenges precipitated by Covid-19 and the consequent nationwide lockdown are unique and devastating, and is threatening to push an already moribund sector over the edge.

India is expected to register a growth post COVID-19, owing to increasing adoption to cater rising power consumption in the industrial sector of our developing nation.

The Indian manufacturing industry is poised to grow on account of government initiatives such as Make in India; support and outreach programs for micro, small, and medium enterprises (MSMEs), and investments in industrial corridors. This, in turn, is likely to generate a high demand for backup power supply from the manufacturing industry, for meeting centralized, captive, and uninterrupted power supply needs.

With the setting up of new facilities, the sale of generators and thus alternators is likely to rise, in order to meet the demand for continuous power supply. Owing to such factors, the Indian alternator market is expected to witness growth in the coming years

The Indian construction industry is witnessing notable growth on account of the investments by private and public players, expansion of urban housing infrastructure, and development of commercial installations (such as telecom towers and logistics centres). This, in turn, is propelling the installation of DG sets, in order to provide power at construction sites, wherein the work is conducted round the clock.

In addition, the country is also expected to witness the construction and localization of data centres, owing to the supportive government policies and data protection laws. This is further expected to generate a significant demand for power, in turn, augmenting the India diesel genset market and thus the alternator growth in the next decade.