Quality is the fundamental basis for any product to succeed in the marketplace--especially so in the case of electrical insulators because of the vital role they play in keeping electrical networks operating. And assuring quality means good design, good raw materials, and proper manufacturing techniques. At the same time, price is also important in this business, particularly so since it is so competitive. Therefore, quality and price are critical issues for both suppliers and users of insulators.
Silicone rubber composite insulators have been used in China now for more than twenty years. Pollution flashover events, which used to occur frequently on porcelain or glass insulators, have been reduced significantly by wide application of these insulators. Indeed, outages related to pollution flashovers on the power system of the State Grid Corporation of China were far less than cause by other factors, such as ice flashover, lightning flashover, external force damage, bird streamers, wind flashover, among others. Once a largely unknown product, the silicone rubber insulator has now become both welcome and widely accepted.
For example, in the new 1000kV UHV AC demonstration project, which was put into operation in January of this year, 7200 such insulators were used and account for at least 2/3 of all suspension strings on the line. Moreover, some 35,000 silicone insulators will be used on the ±800 kV UHV DC lines planned to be put into operation at the end of this year and next. Clearly, the total market for composite insulators have grown significantly and more and more manufacturers are eager to grab their share of this business.
Over the past twenty years, the typical market price for composite insulators in China has not increased, but rather decreased-steadily and significantly. In fact, the price of silicone insulators for 110-500kV systems is now much lower than at the start of their use. Accounting for inflation, this means that the extent of the price decrease is really quite dramatic.
Because of economies of scale, it is natural that manufacturing costs have also gone down with the increase in typical batch size. Also, suppliers realize that keeping prices low is a very effective tool in encouraging even greater use of these insulators. At the same time, new suppliers entering the business often adopt a strategy of low price in order to win share from existing manufacturers. And this means that these existing suppliers have to decrease their price as well to maintain their market share.
However, there is a clear danger in this situation. If prices fall too fast and too low, there will be little profit left for manufacturers. And that means that manufacturers have to find ways to cut costs, over and above only through economies of scale. That creates a situation where either insulator quality will become doubtful or manufacturers decide to discontinue supplying certain types of products. For example, the previous leading Chinese manufacturers have lost most of their market share for lower voltage silicone insulators, i.e. 35kV, 110kV and 220kV.
During the past five to six years, the process of call for tenders in China has resulted in utilities adopting a policy where the supplier with the lowest price will automatically win the contract. Unfortunately, this has only made matters worse by accelerating the process of price-cutting. This means that insulator quality, especially over the long term, is doubtful. The question therefore arises how best to keep a balance between quality and price and this is now being asked more and more frequently.
But to answer this one must first distinguish between good quality and poor quality silicone insulators. So, what constitutes good quality?
Good quality should be judged by insulator performance over long-term operation on the network--something that is not easy to assess beforehand when the insulator is manufactured and purchased by the customer. Rather, this is judged purely by the results of testing. If the insulator passes the test, it is a qualified product. But the fact is that it is hard to predict a composite insulator's long-term performance before it is put into operation by usi9ng present international standards alone. And it is equally hard to distinguish a high quality silicone insulator form one that only passes the required tests.
To assess expected long-term performance, different Chinese utilities have different requirements. For example, some utilities feel a composite insulator is of sifficiently high quality if it can perform sagely for ten years. Then, these utilities often decide to replace the old composite insulators with new ones--no matter whether they are still good nor not. Apparently, they feel that ten years with almost no maintenance is good enough and already much better than the porcelain insulators used before, which required much maintenance. They do not want to take the risk that these new composite insulators might fail after more than ten years in service.
Other utilities in China insist that a good quality silicone rubber insulator should be safe in operation for more than twenty or thirty years. Few look to such life spans as forty or fifty years. Of course, different life expectancy requirement will have a great influence on costs and test standards,
Generally, it is fair to say that the price of 35-220kV silicone insulators in China has been cut too much while the price of 500kV AC units has also dropped too significantly. Therefore, it is important to adopt higher test standards in order to guarantee good long-term performance. And it is important to maintain the right balance between quality and price for these products.
Hopefully, this ongoing battle between price and quality will not extend to insulators for strategic lines such as ±500kV or ±800kV HVDC lines where the transmission capacities are 3000 MW and 6400MW respectively--nor to 1000kV UHV AC lines.
