With the rising power demand and increasing share of renewable energy in the total energy mix, India is developing new strategies to strengthen its power transmission network. It is estimated that the country’s transmission segment will attract investments of about Rs 3.3 trillion over the next five years. The government is looking to involve the private sector in building the country’s high voltage network, with projects worth Rs 800 million-Rs 1,200 million expected to be bid out in the next six months. There is also a focus on the development of green energy corridors to help the country achieve its renewable energy generation target of 175 GW by 2022. Several regulatory initiatives and structural reforms are under way to increase both grid security and transmission capacity.
Despite these positives, the transmission segment continues to be affected by a number of exogenous issues such as delays in statutory clearances for transmission projects as well as in the commissioning of underlying generation projects. Uncertainty in acquiring right of way (RoW) also results in significant time and cost overruns.
Size and growth
The power transmission segment saw robust capacity addition in 2015-16, with around 28,110 ckt. km of lines and 62,850 MVA transformer capacity being added at 220 kV and above voltage levels. As of March 2016, India’s high voltage network comprised 341,551 ckt. km of 220 kV and above lines. Of this, 46 per cent of the network was operational at 220 kV, 43.1 per cent at 440 kV, 7.1 per cent at 756 kV and 3.8 per cent at 500 kV high voltage direct current (HVDC). In terms of transformer capacity, India had a total of 643,949 MVA at 220 kV and above voltage levels. Of the total MVA capacity as of March 2016, 45.5 per cent was at 220 kV, 32.5 per cent at 400 kV and 22 per cent at 765 kV. The country also had 15,000 MW of HVDC capacity at converter/back-to-back terminal stations. At the end of 2015-16, India’s interregional power transfer capacity stood at 58,050 MW, more than double the capacity at the end of the Eleventh Plan period.
Grid strengthening measures
Recently, the Ministry of Power (MoP) an-nounced several key measures to expedite the construction of transmission projects. In October 2015, the MoP issued guidelines for payment of compensation for damages on transmission corridors in order to expedite the construction of lines. In the same month, the central government proposed the creation of a legal framework to make all interstate transmission of renewable energy free of cost. The central government has also urged states to waive transmission charges for electricity generated from renewable sources.
A proposal to set up a general network access (GNA) – a common mesh of transmission networks – has also been made. The GNA will help reduce the congestion in power transmission and also encourage investment in the segment, which is reeling from a demand-supply mismatch. The Central Electricity Regulatory Commission is expected to present the report on GNA to the MoP soon.
Moreover, the government is seeking to amend the Electricity Act, 2003, to enforce grid discipline as well as open the transmission and distribution segments to competition. The amendments propose a manyfold increase in the penalty for non-compliance with orders relating to grid security for better enforcement.
Restructuring moves
In July 2015, the MoP set up a committee under the Central Electricity Authority (CEA) to hive off the central transmission utility (CTU) function of Power Grid Corporation of India Limited (Powergrid) to promote healthy competition in the transmission segment. Following this, the CEA submitted a feasibility report for a proposal to set up an independent body along the lines of the Power System Operation Corporation under the guidance of the MoP. However, in March 2016, it was announced that the separation of Powergrid’s CTU function was facing considerable delay and was expected to take at least another year.
The decision on the separation of this function has been encouraged due to Powergrid’s participation in tender-based bidding for transmission projects in direct competition with private players, since, as the CTU, it can have easy access to sensitive information. Moreover, Powergrid is looking to diversify its businesses into other domains, especially electricity distribution and trading, once the CTU responsibilities are divested.
Boosting competition
The timely and successful expansion of the country’s transmission grid cannot be achieved without the support and involvement of the private sector. This has been clearly recognised by the government.
In April 2016, the central government announced its plan to award transmission projects, worth Rs 300 billion-Rs 500 billion, associated with 33 new solar parks via tariff-based competitive bidding (TBCB), a more transparent bidding process. Previously, the government had awarded transmission line construction contracts worth Rs 150 billion (associated with six solar plants in five states) to Powergrid on a nomination basis under the Green Corridors I scheme. Participation of the private sector will help expedite the development of transmission corridors for upcoming solar parks in Andhra Pradesh, Madhya Pradesh, Karnataka, Rajasthan and Gujarat.
In September 2015, the CEA’s Empowered Committee on Transmission had identified eight transmission projects worth Rs 94.68 billion to be awarded through the TBCB route. The bidding process for several of these projects has already been initiated. These include the transmission system for immediate evacuation for NTPC’s North Karanpura (3×660 MW) generation project along with the creation of a 400/220 kV substation at Dhanbad (Eastern Region System Strengthening Scheme [ERSS]-XIX); system strengthening in the western region associated with the Khargone thermal power plant (1,320 MW); 765 kV strengthening in the eastern region (ERSS-XVIII); and North Eastern Region Strengthening Scheme (NERSS) II (Part B) and V.
In addition, the bidding process for the Additional Inter-Regional Alternating Current Link for Import into the Southern Region (Warora-Warangal and Chilakaluripeta-Hyderabad-Kurnool 765 kV link), the NERSS VI, creation of new 400 kV gas-insulated switchgear (GIS) substations in Gurgaon and Palwal as a part of the interstate transmission system project, Northern Region System Strengthening Scheme-XXXVI along with line-in-line-out of the 400 kV double-circuit Sikar-Neemrana line at Babai project, NERSS II and Transmission System for Phase I generation projects in Arunachal Pradesh, is also under way.
During 2015-16, six projects were awarded through TBCB, of which five were bagged by private companies and one by Powergrid. Adani Power Limited won three contracts aggregating Rs 3.6 billion – the Additional System Strengthening Project for the Sipat steam-based thermal power station, System Strengthening for Independent Power Producers (IPPs) in Chhattisgarh and Other Generation Projects in the Western Region, and Additional System Streng-thening Scheme for Chhattisgarh IPPs Part B project. Sterlite Grid Limited won one contract worth Rs 4 billion for the connectivity lines for the Maheshwaram (Hyderabad) 765/400 kV pooling station project; Kalpataru Power Transmission Limited won the Rs 18.1 billion project for strengthening the Indian transmission system for transfer of power from new hydroelectric plants in Bhutan; and Powergrid won the project for strengthening of the transmission system beyond Vemagiri, worth Rs 63 billion.
While, the government’s intent of increasing private sector involvement in expanding the country’s high voltage grid is clear, the pace of project award through the TBCB route has been slow. So far, only 22 projects worth roughly
Rs 2.5 billion have been awarded through the bidding route over the last five years. Further, the number of bidders reduced from 12 in 2011 to just 4 in 2015. Also, most international bidders are staying away, citing the small project pipeline and concerns about the dominant incumbent as reasons for doing so.
Strengthening cross-border links
Significant progress has also been made to boost cross-border energy trade, with the recent commissioning of two interconnections – one each with Bangladesh and Nepal. In December 2015, the Northeast India-Bangladesh line linking Tripura in India to Comilla in Bangladesh was commissioned. The link will be used for supplying 100 MW of power from the Paltana power plant in Tripura to Bangladesh to help ease the power shortages of the latter.
In February 2016, the 400 kV Dhalkebar-Muzaffarpur cross-border transmission line, linking the power grids of Nepal and India, was successfully commissioned. Initially, 80 MW of power will be exported from India to Nepal and this will be augmented to 600 MW by end-2017.
Besides the recently commissioned interconnections, India’s power grid is linked to Nepal’s via 22 lines, to Bhutan’s via five links, and to Bangladesh’s via one line.
In addition, six cross-border transmission corridors between India and Nepal have been proposed to promote long-term energy trade between the two neighbours. The six proposed 400 kV lines will be constructed on the Attariya-Uttarakhand, Lamki-Tikuniya, Kohalpur-Rupaidiha, Butwal-Gorakhpur, Muzaffarpur-Dhalkebar and Inaruwa-Bihar corridors. An HVDC undersea link with Sri Lanka is also being planned. The pre-feasibility studies for the project which will link Madurai in India to Trincomalee in Sri Lanka have already been completed. The project is expected to transfer 1,000 MW of power from India to Sri Lanka.
Further, the country is planning a 400 kV link to Bhutan to evacuate hydroelectric power from the latter. There are also discussions under way with Pakistan for a 400 kV line link.
These links are part of the country’s larger plan of creating an integrated South Asian Association for Regional Cooperation power market. An integrated regional grid will help improve the system load factor by utilising load diversity, enhance efficiency and reliability of power supply, lower the reserve margin, and provide economies of scale in power generation.
Conclusion
Investments to the tune of around Rs 3.3 trillion are needed in India’s power transmission segment over the next five-six years to achieve the Twelfth and Thirteenth Plan targets of expanding the country’s 400 kV and above network to over 256,000 ckt. km, and 500,000 MVA of AC capacity and 37,500 MW of HVDC capacity.
These ambitious plans require a commensurate effort from all stakeholders. While Powergrid will remain the dominant player, it will not be able to meet the expansion targets single-handedly. The private sector needs to be involved to help achieve these targets. That said, a conducive investment environment must be provided and barriers discouraging the private sector need to be removed to ensure its timely involvement.
