Digital India - After effects of Demonitization

Demonetization's Aftereffects 

Another mile stone for India’s solar power program

4 MW horizontal single axis tracker in Vellakoil, Tamil Nadu

Shortfalls in rain, availability of water in rivers and growing atmosphere pollution is not only threatening the water supply to agriculture and cities but also raising questions about the viability of future electricity production by means of water intensive methods like thermal and hydro. Electricity became a crucial element in modern life to such an extent that, it acquired a position next to air, water, food and shelter. Raising concerns about safety and high initial investment already made nuclear power production unattractive.

It is at this juncture we are getting some good news from Rewa Ultra Mega Solar Project’s bidding. Bid for three units in Rewa – each will have an installed capacity of 250 MW – was won by won by Mahindra renewables, ACME Solar Holdings and Sweden’s Solengeri Power. Total installed capacity of this project is 750MW.

Mahindra renewables, ACME Solar Holdings and Solengeri Power quoted 2.979/KWh, 2.97/KWh and 2.974/KWh for first year. Under Rewa’s power purchase agreement there is an escalation price of 5paisa/ unit in tariff for next 15 years. As per Mint reports levelled tariff over 15 years will be 3.30 INR/Unit.

What make this number path breaking is, it is the first time we are witnessing a below 3 INR price for solar power. Till now the record was 4.34INR/Unit. Even the average price for electricity from highly polluting but cheap coal plants of NTPC stands at 3.2 INR/ Unit.

If these private companies which are going to operate Rewa are able to produce power sustainably (only time can tell) then lot of new projects will definitely come up. Even now many foreign funds are keen on investing in India’s renewable sector. However, to mature, the industry has to demonstrate that even without government subsidies it has a sustainable future.

In any case renewables share in Indian electricity production is going to increase. As per a BP estimate it will it 8% (from current 2%) by 2035. As of December 2015, we have an installed capacity of 9012.69MW.

Sajeev

References
1. Livemint

Photo Courtesy: Wikipedia

Future of Manufacturing and factory jobs

India Government already made manufacturing as national priority again. As we can’t do much more with agriculture; and services may already be approaching its peak this may be an area left for bold steps. In addition to that, when we are buying most of important items from overseas these type of policy changes make sense.

The question is how far we can go; more than that how far we are willing to go?

By the way we are not alone here. Even in US where new president is trying to make his mark on everything, is also doing the same job - to bring all manufacturing jobs back to US. Again, the question is how many manufacturing jobs can be brought back? More than that, what type of manufacturing jobs will that be? A closer look at this problem reveals some interesting patterns.

Manufacturing is looking for two main things - cheap labour and facilities for mass production. As the world now have some very good supply chains, it is not difficult to manufacture anything anywhere and supply the same in any nook and corner of planet earth. Even now, engineering goods are moving from EU, US and China to all parts of the world.

Well, cheap labour leads the way. Over a period of time due to the availability of cheap labour some jobs easily shifted from western Europe to eastern Europe; from Europe and US to east Asia and finally to China. This phenomenon raised wages in China and some of those jobs started looking for new green pastures where wages are still low; towards Vietnam, Cambodia, Bangladesh etc.

But this time there will be a difference. Chinese are doing something unexpected. They are importing industrial robots and slowly moving towards the mass production of the same. Chinese factory floors are seeing less and less human foot-prints. Many are in the process of shifting jobs from human’s hands to electronic hands. ABB’s and other multinational companies’ robots are working 24/7 on factory floors.

At the same time, China will not let US, EU or Japanese robotic companies have the last laugh. They are making their own robots which like many other Chinese products may not be as precise as imported ones but nevertheless do the job. After a while quality will also come.

As far as numbers are concerned, China became world’s largest market for industrial robots as early as 2013. This is not only going to give solution for ageing Chinese population and fix imperfections in manufacturing high-end equipment’s bit will also make sure that the country will remain global factory hub for years to come.

Will Trump be able to bring manufacturing jobs back?

So, what is going to happen to Trump’s proclamation of bringing back factory jobs to US? Well, he may be able to do so. The difference may be the fact that, those factories may no longer employee humans but may run with robots imported from China! Even without imported Chinese robots, this is going to happen. Contrary to popular perceptions, US manufacture a lot. For e.g. in 2016 US manufactured more than any other year in their history but with leaner workforce ratio. The US manufactured 85% more goods in 2016 but with 75% of the workforce compared to 1987.

Is US doing something to get back the crown of manufacturing industrial robots? I don’t think they are doing much. In Beijing, everything is different. There is a well-planned policy to make China a global robotic hub. At the time of speaking, there might be more than 100 companies engaged in building robots. Central and regional government are giving a lot of subsidies. True, this type of centralized approaches will generate a lot of waste. But think about a worst-case scenario where only 50% of those companies survive; then also there will be more than 50 companies with the sophisticated technology to build industrial robots.

What India is doing

There are some flickers here and there. I believe that the government is yet to think seriously about the future of manufacturing from a factory floor perspective. It is not enough to build factories, but those factories should also be able to compete with Foxconn, ABB, Flextronics etc of the world. Simply building more factories will certainly enhance the capacity and productivity but may not be sustainable in the long run.

Brabo

Last week TAL Manufacturing Solutions (an arm of Tata Motors) unveiled new robot- Brabo. This is coming with a payload of 2,5, 10 kgs. Brabo developed with a small budget of 20 crores is fully indigenous except its motor (company states that they will manufacture motors in India soon). As per TAL Brabo have 360-degree vision with flip back capabilities and can be used for CNC machine handling, Vision and Inspection in assembly lines, materials handling, pick and place materials etc. As per company claims users can recover the cost (4.75L to 6.5Lakkh) within 15 to 18 months of operation. In addition to that, Bramo is claimed to have the capacity to finish work in 2-3 days which an operator may take 7 days.

Required Big Shifts in Policy

Adoption of industrial robots in all manufacturing is not yet fully graduated, which leave as some more time to tweak the policy. As robotic manufacturing is accompanied by Big data, Analytics, Autonomous systems, IoT, Augmented reality and Cyber-security where India already have considerable potential there is still time to make our mark in the future.

Going forward we need comprehensive policy to address new shifts in manufacturing. Government needs to do come up with well-crafted plans, proper incentives to make manufacturing of industrial robots in India a national priority.

The question is, are we willing to do it? The decisions we are going to take in next few years will make or break India’s future in manufacturing. Right decisions will make us a global hub on manufacturing, the wrong ones will make sure that we are going to miss this manufacturing revolution as well; just like we missed the earlier two.

Sajeev.

References

http://www.tal.co.in/robotics/

The British Legacy In Bridges – Indian Railways

We started using railways long back. As back as 1953 for passenger transportation and some more decades back in mining areas. A lot of tracks were built during British colonial era. Post-independence we continued the process of building new routes, changing the gauges albeit at a lower speed than required. In many previous articles, we talked about this in length. Today we will look at some mind-blowing numbers (this will blow the mind of people who are going to use those railway assets as well).

In Indian railway system,
Total number of bridges - Over 1,36,000.
Bridges which are more than 140 years old – Over 6,000 (4.41%+)
Bridges which are more than 100 years old (including 140+) – Over 35,000 (25.7%+)
Rate of Replacement of Bridges – as per the claims 600/year.
Years required to replace all 140+ years old bridges – 10 Years
Tracks which already past their prime – 1,15,000 KM.

Numbers are from BS.

To be fair to British, bridges built during British era were very good. In my town, there are two river bridges built during colonial era – one of it is still in use. The other one was decommissioned more than a decade back. Interestingly the new bridge came up near decommissioned one had holes with in some months of its operation and shutdown twice for repairs.

However, this need not be the case everywhere.

Very old bridges are indeed a safety concern. The faster we replace it the better.

Sajeev.

Happy Republic Day

Today India is celebrating the anniversary of adopting new constitution and the beginning of a new journey. When many countries which got independence around the same era moved away from democratic and republican values, we firmly stood on the path and continued our journey. Thousands of years of shared culture and values only made our resolve stronger. Let’s build more on this foundation and realize the dreams.

Happy Republic Day to all of you…

Sajeev