‘Genset market to grow at 8-10% CAGR in long term’

This genset is from the CPCB II compliant X-series family catering to 20 - 40 kVA.

Cummins Power Generation India is the leading manufacturer and market leader of diesel fuel power systems. It is a single window provider of complete power solutions offering top-of-the-line products (diesel and gas) and services.

Amit Kumar, Vice President, Power Generation Business, Cummins India Limited told Sandeep Menezes that the new CPCB II emission norms are aimed at reduction of pollutants by approximately 50 per cent which will contribute to a cleaner environment.

Amit Kumar

Amit Kumar

Excerpts from the interview:

Tell us about Cummins Group’s recently introduced Power Generation product line which is compliant with the new CPCB II norms?

Central Pollution and Control Board has released the new genset emission norms (CPCB II) which will be effective on 1st Apr 2014. Recognizing the importance of adhering to cleaner standards and the necessity of upgrading the emission norms for the betterment of the environment, Cummins has already commenced production of the new series of generator sets and engines at its manufacturing plants.

This new series of Cummins generator sets/ engines comprises of all the nodes up to 800kw covered under the new CPCB II norms. So far, nearly 60 units have been field tested, successfully operating for more than 7,000 hours at customer sites across India. The new series of generator sets are equipped with advanced emission-reduction technologies exceeding the mandated emission standards. In addition, technological innovation has eliminated the need for diesel particulate filters by deploying a high-pressure fuel injection system that significantly optimizes fuel efficiency.

How will the new environmental norms (CPCB II) change business dynamics across the diesel generator sets segment in India?

The CPCB II norm, which is a next level of emissions after CPCB I, has come after a gap of eight years. The new levels are directly in line with the Euro Stage III A and U.S. EPA norms and demand a quantum jump in emission reduction. Moreover, the Indian norms are more stringent than EU norms in a way that they are applicable for all power generation applications up to 800kw, unlike EU norms applicable up to 560 kW for mobile sets.

Do you feel the introduction of CPCB II norms will lead to higher prices thereby slower market growth?

As emission regulations are becoming more stringent, new and advanced technological solutions are being adapted for combustion optimization. Higher fuel system pressure result in improved in-cylinder combustion process. Also air handling, after treatment, filtration and control systems has undergone a modification. This change in technology and material will impact genset prices which are likely to go up 15-20 per cent.

How will the introduction of CPCB II compliant products benefit consumers?

The new CPCB II emission norms are aimed at reduction of pollutants by approximately 50 per cent which will contribute to a cleaner environment. Cummins has launched similar products in the past in the U.S. and European markets that adhere to the US EPA and EU norms respectively. For CPCB II, Cummins will leverage this proven technology and experience in leading the emissions change in India, ensuring a smooth transition for customers.

What is the current and future estimated market growth across India’s generator sets segment? Tell us about the main drivers for this growth?

The growth is linked to various factors like industry growth, market segments, investments, power deficits, Government policies and other factors that affect the Indian growth story. The key sectors which have been driving growth for gensets are construction, IT/ITES, realty, hospitality, textiles, auto & auto ancillaries, food processing, telecom, data centers, infrastructure, pharma and manufacturing sectors.

While the short term outlook continues to be uncertain and low key, as evident from the sharp decline in 2013-14, we expect the market to grow at 8-10 per cent CAGR in the long term.

How does India’s generator sets segment differ vis-à-vis other nations?

CPCB II norms are in general similar to EU Stage III A and US EPA Tier 3 norms. The difference between EU Stage IIIA and CPCB II is that EU III A is applicable for rental (mobile) gensets only and is applicable up to 560kw and mobile gensets typically contribute to 5 per cent of EU market. CPCB II is applicable for all gensets till 800kw. Hence, the challenge for the Indian genset industry is much bigger than the European market.

What is the future business strategy of Cummins Group in India’s generator sets segment?

Meeting emission regulations is a critical element for Cummins’ global success. The company believes its technical expertise gives it a competitive advantage in this business environment.

Being one of the leading global manufacturers and supplier of gensets across the world, Cummins will continue to deliver value to its customers with uniquely matched and integrated power solutions for every application through advance customer engineering.

Top