Influx of sub-standard CRGO & poor quality Transformers can trip Modi's 24X7 power supply dream
Updated: Sep 07, 2015 03:44:32pm
New Delhi, Sept 7 (KNN) The Modi government's plan to ensure 24X7 power supply to everyone in the country in next five years could trip over poor-quality transformers installed by distribution utilities. The failure rate of transformers in India is abnormally high -- 20-25 per cent compared to the global average of less than 2 per cent and as low as 0.5 per cent in some developed countries. Transformers are the key to ensuring uninterrupted power supply to consumers.
Globally, power transformers are supposed to have life of over 25 years but in India their life is much shorter and reliability much lower, thanks to widespread use of non-prime, sub-standard CRGO steel by manufacturers.
Significantly, India does not have any manufacturing facility for CRGO steel even as the government has envisaged ambitious capacity addition programme to meet the electricity requirement of a fast-growing economy. The power industry’s entire demand of the electrical steel, estimated at 3 lakh tonnes/year, is met with imports.
But the alarming thing, according to sources in the government, is that most of CRGO steel imported into the country is of scrap grade and when used in transformer manufacturing, it badly compromises their performance and durability. Despite quality control restrictions imposed by the steel ministry, unhindered import of low-quality steel continues as it comes at dirt cheap prices – scrap-grade steel costs just about half the market price of prime-grade. CRGO steel, a critical component, accounts for over half the cost of transformers.
In what is a growing trend, manufacturers using non-prime steel quote significantly low prices in tender for supply of transformers to utilities, pushing out of business suppliers of high-quality equipment. This malpractice has got so deeply entrenched in the industry that measures like quality control put in place by the Centre to check import of non-prime CRGO are proving futile.
The public procurement practice followed by state-owned utilities to award supply to the lowest bidder (LI) without bothering much about quality is also not helping the matter either. Unscrupulous suppliers are exploiting this policy anomaly to sell their low-quality transformers to utilities.
The cost economics of cheap-quality transformers may not be as attractive as it appears to utilities if not just price tag but curtailed life span of equipment too is taken into account. Rather, the dubious quality of transformers makes them too expensive it. And it is electricity consumers who have to reimburse expenditure made by utilities on account of transformer purchases. That means consumers will pay the price.
The situation is so alarming that even Power Minister Piyush Goyal has voiced concern over the growing usage of sub-standard CRGO steel in transformer manufacturing. However, given that other concerned ministries are not on the same page, it might not be easy for Goyal to check this menace.
The Modi government has unveiled ambitious expenditure plans to strengthen power transmission and distribution network in a bid to meet the goal of uninterrupted power supply to all by 2019. However, it is doubtful if the goal will be ever achieved given the growing usage of sub-standard CRGO steel which is the main cause of the peculiarly high failure rates of transformers in the country. (KNN/NM)
Globally, power transformers are supposed to have life of over 25 years but in India their life is much shorter and reliability much lower, thanks to widespread use of non-prime, sub-standard CRGO steel by manufacturers.
Significantly, India does not have any manufacturing facility for CRGO steel even as the government has envisaged ambitious capacity addition programme to meet the electricity requirement of a fast-growing economy. The power industry’s entire demand of the electrical steel, estimated at 3 lakh tonnes/year, is met with imports.
But the alarming thing, according to sources in the government, is that most of CRGO steel imported into the country is of scrap grade and when used in transformer manufacturing, it badly compromises their performance and durability. Despite quality control restrictions imposed by the steel ministry, unhindered import of low-quality steel continues as it comes at dirt cheap prices – scrap-grade steel costs just about half the market price of prime-grade. CRGO steel, a critical component, accounts for over half the cost of transformers.
In what is a growing trend, manufacturers using non-prime steel quote significantly low prices in tender for supply of transformers to utilities, pushing out of business suppliers of high-quality equipment. This malpractice has got so deeply entrenched in the industry that measures like quality control put in place by the Centre to check import of non-prime CRGO are proving futile.
The public procurement practice followed by state-owned utilities to award supply to the lowest bidder (LI) without bothering much about quality is also not helping the matter either. Unscrupulous suppliers are exploiting this policy anomaly to sell their low-quality transformers to utilities.
The cost economics of cheap-quality transformers may not be as attractive as it appears to utilities if not just price tag but curtailed life span of equipment too is taken into account. Rather, the dubious quality of transformers makes them too expensive it. And it is electricity consumers who have to reimburse expenditure made by utilities on account of transformer purchases. That means consumers will pay the price.
The situation is so alarming that even Power Minister Piyush Goyal has voiced concern over the growing usage of sub-standard CRGO steel in transformer manufacturing. However, given that other concerned ministries are not on the same page, it might not be easy for Goyal to check this menace.
The Modi government has unveiled ambitious expenditure plans to strengthen power transmission and distribution network in a bid to meet the goal of uninterrupted power supply to all by 2019. However, it is doubtful if the goal will be ever achieved given the growing usage of sub-standard CRGO steel which is the main cause of the peculiarly high failure rates of transformers in the country. (KNN/NM)
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