For Indu Shekhar Jha, Chairman and Managing Director of the state-promoted transmission giant Power Grid Corporation of India (PGCIL), the priority lies in a different set of tasks. Unlike his predecessors, he is neither designing new projects nor struggling with congestion issues. Instead, he is working on boosting the country's transmission capacity that will ensure seamless power flow from renewable energy sources. Known as the green energy corridor, this Rs 43,000 crore project was envisaged in 2013 and involves grid extensions and upgrades for connecting renewable energy plants to the national grid. While new and upgraded transmission lines will resolve intermittency issues that often plague green power sources, inter-regional and intra-regional transmission networks, and in many cases, intra-state evacuation systems, are being revved up to meet current and future demand. All these must be top priorities if India is to make good its Paris climate agreement and achieve Prime Minister Narendra Modi's target of integrating 175 gigawatt (GW) green power by 2022.
Where India Stands
So, what is the situation on the ground? India has five interconnected transmission regions which operate as a well-synchronised national power grid. Its capacity was increased to transmit 7,22,949 Mega Volt Amp (MVA) by the end of the financial year (FY) 2016/17 from 5,30,546 MVA in 2013/14. The network was also expanded from 2,91,336 circuit km (CKM) to 3,66,634 CKM during the period. India is expected to add another 1,00,000 CKM by 2022.
The numbers look impressive, but are these enough to meet the generation-transmission gaps? According to a report by industry watchdog Central Electricity Authority (CEA), the current transmission projects, those under construction and in the planning phase, should be adequate as the country has installed capacity of 329.3 GW and peak power demand of 159.8 GW. CEA has projected peak demand at 235 GW and power requirement at 1,611 billion units by the end of 2021/22. It will be around 17 per cent and 15.4 per cent lower than the corresponding projections by the 18th Energy Power Survey Report.
Such projections should not be a matter of concern. According to Power Minister Piyush Goyal, increasing energy efficiency and upgraded infrastructure will reduce wastage (hence, the projected fall in consumption) and cut down aggregate technical and commercial losses. The use of LED lights and energy-efficient appliances has helped India reduce its annual peak demand by at least 20 GW. One can expect more when the country adopts smart grids at the local level, the minister points out.
Jha, however, expects demand to rise shortly. "This is a temporary mode. The density of electricity consumption is increasing. We are also expecting economic activity to pick up soon. We have to be ready before the tide arrives," he says.
Staying future-ready is not braggadocio if one takes a close look at the organisation he heads. As the central transmission utility, PGCIL does the wheeling of power generated by all central units and inter-state independent power producers. It also undertakes inter-state grid upgrades. On the other hand, state transmission utilities (STUs) look after intra-state transmissions and grid upgrades.
In Driver's Seat
In 2016, the government brought in a new clause mandating that all projects of strategic importance would be nominated to state-run Power Grid instead of allocation via tariff-based competitive bidding. The policy shift has put the company back in the driver's seat, and it is now fully responsible for implementing critical projects such as the green corridor. State governments, too, find it convenient to work with it, either via the nomination route or through joint ventures.
Jha's workload has increased as the Power Ministry has kept the private sector at bay as far as the green corridor is concerned. According to ministry officials, Power Grid will set up new transmission lines as well as pooling stations. Speed is of crucial importance here and so Power Grid is roped in for major time-bound projects such as developing transmission lines to connect solar parks and inter-state transmission systems. Among these are four 765 kilovolt (kV) Bikaner-Moga transmission lines, which will help evacuate green energy from Rajasthan to North India.
The company has completed the first leg of the Green Corridor project - a 500 MVA transmission system for the Ultra Mega Solar Park (UMSP) in Anantpur, Andhra Pradesh. Now, Jha plans to implement similar systems for eight other UMSPs across seven states. In May this year, work started on the 800 kV UHVDC (ultra high voltage direct current) Raigarh-Pugalur transmission system that will connect Raigarh in Central India to Pugalur in Tamil Nadu.
There is more to the report card. Over the past three years, the national grid's strength improved from 33,950 MW to 75,050 MW. Also, the southern grid has been fully synchronised with the western grid with the commissioning of the 765 kV Raichur-Solapur transmission system.
"Nowadays, you more or less pay the same tariff for electricity across the country. It means congestion issues are over," says Deepak Amitabh, Chairman and Managing Director of Power Trading Corporation, India's biggest electricity trading company. It is another feather in Jha's cap.
Some private players cry foul as Power Grid is allotted work via the 'nomination' mode. But according to some solar park developers, the catch lies in implementation issues that might have tilted the scale. "Getting right of way for transmission lines involves extensive negotiations with farmers and other stakeholders," one of them points out. "It is nearly impossible for foreign investors or outsiders to get it done. That is why a PSU is in charge and it is working."
Will Green Power Thrive?
For Jha, the biggest challenge is the implementation of the green corridor. To start with, a sync between solar parks and corresponding transmission projects is not easy. A solar park can be built in about 18 months or less while a transmission facility takes at least 24 months. Again, it is difficult to get finance for a solar evacuation project as cable utilisation is at 20 per cent or less. Also, green energy units are scattered all over the country and it is not easy to sync them.
But the biggest bottleneck is the lack of low-cost financing. Private players working on transmission projects are finding it difficult to achieve financial closure as lenders are not enthusiastic about the sector. Worse, public sector companies are yet to start investing in such projects. For instance, Centre-backed Power Finance Corporation and Rural Electrification Corporation fund states to undertake distribution reforms, but no investment is made in transmission projects. State-promoted transmission companies are pushing for tariff-based bids to usher in more private investments, but the response is still sluggish. Despite policy push and the '24x7 power for all by 2022' scheme, which has opened up investment opportunities worth `12 lakh crore, the projects allocated to the private sector slumped to `9,800 crore in 2016/17 from `21,200 crore in the previous year.
Funding issues do not seem to worry Jha, who has a financial plan in place. "Forty per cent money comes from the clean energy fund of the Ministry of New and Renewable Energy; another 40 per cent is soft debt [from the likes of Asian Development Bank and KfW], and the rest comes from state transmission companies." Confidence is the keyword for him and he may need every bit of it with huge and complex tasks on his plate. ~