The recently-launched “National Electricity Plan” has envisaged India to have nearly 1,900 GVA of transformation capacity by end of FY27. However, going by the actual performance in recent years, the pace of capacity addition needs significant acceleration, if India has to come anywhere close to the projected level.
The National Electricity Plan 2032 (NEP 2032) was recently finalized by the Union power ministry. The broad objectives outlined therein are strongly suggestive of India’s resolve to progress rapidly with its power grid augmentation drive.
By 2032, India is envisaged to have 6.48 lakh ckm of transmission lines, up 34 per cent from the current level. Likewise, transformation capacity is targeted to nearly double from 1,251 GVA now to 2,342 GVA (1 GVA = 1,000 MVA; only 220kV and above lines/substations are being considered in the given target.) All this will contribute towards enhancing interregional transfer capacity to 168 GW by 2032, from around 119 GW now.
Most striking is the projected growth in HVDC-based power transmission. NEP 2032 has formalized HVDC-based power transfer capacity addition of 33.25 GW that would mean nearly emulating the existing base of 33.50 GW, by 2032. This addition is seen coming from nine major HVDC transmission lines, some of which are already in pre-project stages.
The current situation with respect to HVDC technology is tricky. There are only three major suppliers – all multinational giants operating in India – on whom this entire responsibility would squarely rest. Global demand for HVDC, especially for renewable energy evacuation such as that from offshore wind farms, has shot up significantly in recent years.
With the result, the global supply chain is under strain and this is bound to impinge upon India’s HVDC targets. Why HVDC? From a technical standpoint, HVDC is best suited for very long distance power transmission, and this is precisely what India is looking for given that much of the incipient RE capacity is taking root in far-flung areas like Khavda in Gujarat, and Fatehgarh, Bhadla, Bikaner, etc in Rajasthan.
During some recent tenders for HVDC-based ISTS schemes, the Union power ministry had set stringent conditions which were eventually relaxed after long deliberations with HVDC technology suppliers. Extension in completion period to 54 months and lowering of minimum local content (MLC) requirement from 60 per cent to 25 per cent were key relaxations that the Union power ministry consented to.
Clearly, the government is in full cognizance of the fact that HVDC-based transmission lines will have a much longer gestation period — of around five years — as opposed to an average of two years for their EHV AC counterparts.
While the backbone of India’s interregional power transmission will be 765kV AC lines, the role of HVDC technology cannot be undermined. For instance, when offshore wind farms become a reality in India, there will be simply no alternative to HVDC.
It is time that India seriously works towards bringing HVDC technology under the “AatmaNirbhar Bharat” ideology.
The author of this article, Venugopal Pillai, is Editor, T&D India, and may be reached on venugopal.pillai@tndindia.com. Views expressed here are personal.
The current fiscal year, and in particular the past two months, has seen much buoyancy in the interstate transmission system (ISTS) network expansion, under the tariff-based competitive bidding (TBCB) mode.
In the first five months of FY25, a record number of 13 schemes were formally awarded to successful developers. At least four more ISTS-TBCB schemes are likely to come up for award in the coming weeks. Going by the robust bidding pipeline, it strongly appears that FY25 will record the maximum activity in the ISTS-TBCB space – not just in terms of schemes awarded but also in terms of aggregate estimated cost.
In FY24, around 23 ISTS schemes envisaged total outlay of around Rs.45,000 crore were formally transferred to their successful bidders chosen under the TBCB modality.
There have been some radical shifts in the ISTS-TBCB market this year. In FY24 and in the 2-3 preceding years, much of the ISTS schemes awarded under the TBCB route pertained to evacuation of renewable energy (RE), predominantly from Gujarat and Rajasthan. On the other hand, in FY25, while RE evacuation would be the bedrock of the ISTS-TBCB edifice, there would be sprinklings of unprecedented activities like RE evacuation for green hydrogen/ammonia projects, RE transmission for feeding pumped storage schemes, evacuation of nuclear power generation, etc.
More significantly, India’s maiden project for evacuation from offshore wind farms in Gujarat and Tamil Nadu, is likely to be awarded towards the end of FY25. However, this would not be on TBCB basis but under the regulated tariff mechanism (RTM), awarded to Power Grid Corporation of India Ltd (PGCIL). Nevertheless, future schemes for offshore wind energy transmission might fall under the TBCB philosophy, based on learning derived from the initial projects.
Another striking feature of the ISTS-TBCB market is the growing diversity of the developer base. While PGCIL is seen retaining its traditional market share of 50-60 per cent, the remaining market is well distributed between medium and large private entities. It is also worth observing that well-established private power utilities like Tata Power and Torrent Power are actively participating in the bidding process, and have even recorded their first wins. Entities like Techo Electric, Apraava Energy and G R Infraprojects are also making their presence felt in the ISTS development space. It is noteworthy that today the developer base of under-construction ISTS-TBCB projects comprises around 12 players, which is by far the largest seen so far.
While the TBCB philosophy is working well for ISTS development, it must be strongly encouraged at the intrastate level as well. Despite the criticism that TBCB modality might have attracted, it has by now earned a 14-plus year track record of projects commissioned in a cost-effective and time-bound manner.
The author of this article, Venugopal Pillai, is Editor, T&D India. He can be reached on venugopal.pillai@tndindia.com. Views are personal.
Over the past two months or so, there has been inexplicable delay in routine processes associated with transmission projects awarded under the tariff-based competitive bidding (TBCB) route.
In the context of wind energy, which was initiated in the early 1990s and which is perhaps India’s earliest step in energy transition, India has made the next move — offshore wind farms.
In June 2024, the Union Cabinet approved a viability gap funding (VGF) of Rs.6,853 crore for developing 1 GW of offshore wind farms – 500 MW each in Gujarat and Tamil Nadu – through private sector participation.
It is estimated that India has wind energy potential of 30 GW each offshore Gujarat and Tamil Nadu. Efforts are being made to commission at least one 500-MW project offshore Gujarat and another of same capacity in Tamil Nadu, by March 2029 – both under the VGF mechanism.
There are two aspects to offshore wind energy farms – one is development of the wind farms and the other is to develop the power transmission infrastructure. The wind farms will be developed by the private sector, and the initial 1 GW of capacity will be entitled to funding under the VGF mechanism.
As far as power evacuation is concerned, it is estimated that an investment of Rs.18,371 crore will be made in developing infrastructure for transmitting 1.5 GW of offshore wind energy – 500 MW in Gujarat and 1 GW in Tamil Nadu. The Centre has decided that this infrastructure will be developed by Power Grid Corporation of India Ltd (PGCIL) under the regulated tariff mechanism (RTM) route. It is likely that future transmission infrastructure may be developed under the tariff-based competitive bidding (TBCB) route but the initial 1.5 GW will be the mandated responsibility of PGCIL.
While it may be argued that the private sector has been left out, at least to being with, from an exciting area like power transmission from offshore wind farms, there is still tremendous potential for the private sector for equipment supplies and contracting jobs. It may be recalled that the mega HVDC transmission scheme to evacuate solar energy from Leh in the UT of Ladakh has also been entrusted to PGCIL under the RTM route. However, today there are other HVDC-based transmission schemes for renewable energy evacuation being bid under the TBCB route.
Offshore wind energy evacuation will need sophisticated infrastructure like offshore substations that will call for specialized contractors and equipment suppliers. Besides, there will be immense scope for the supply and laying of extra-high voltage (EHV) submarine cables.
Power transmission infrastructure for offshore wind energy therefore presents an exciting opportunity for a big class of equipment suppliers and service providers. It is also likely that future offshore wind energy transmission infrastructure will see the engagement of the private sector as developers, more than just equipment suppliers.
All said, the private sector must harness the abundant opportunity presented by the offshore wind energy ecosystem.
The author of this article, Venugopal Pillai, is Editor, T&D India, and may be reached on venugopal.pillai@tndindia.com. Views are personal.
Apart from putting up power T&D infrastructure from an equipment or hardware perspective, the coming years will witness a sharp focus and growing investment on grid digitization.
State government utilities are now consciously investing in digitizing their grid with a view to improve grid performance, and of course, to mitigate technical and commercial losses. Power Grid Corporation of India Ltd (PGCIL), which today manages over 83 per cent of India’s interregional electricity transfer, has deployed undoubtedly the highest level of technical sophistication in its transmission assets.
For instance, PGCIL has introduced drone patrolling of transmission line-s that will diagnose technical flaws faster, thus reducing downtime. All its substations are remotely monitored. PGCIL is also deploying AI (artificial intelligence) for asset management, apart from pursuing a path-breaking initiative called UDAAN (Unique Digital Analysis of Assets & Network).
Now, what is very inspiring and encouraging is that PGCIL is assisting state government utilities in modernizing intrastate grids. The Central PSU is considering both options – joint ventures with state transcos, and offering consultancy services. A JV with Bihar is already in operation, and one with Rajasthan will be formalized soon. States like Assam and Uttar Pradesh have also evinced interest in similar JVs. PGCIL is also offering high-end consultancy services to Odisha, Madhya Pradesh and Uttar Pradesh to set up transmission asset management centres, for remote monitoring of their substations.
PGCIL has also announced its intentions of actively participating in intrastate grid development under the tariff-based competitive bidding (TBCB) mechanism. Right now, PGCIL is active in only a few states like Uttar Pradesh and Madhya Pradesh, but in the time to come, PGCIL expects to widen its state-level presence.
State transcos need to harness the involvement of private sector players as well as PGCIL, in developing and modernizing their grid. In this reckoning, a growing number of state transcos should put in conscious effort to engage bid process coordinators like PFCCL and RECPDCL to seek developers under the TBCB modality.
As more and more state transcos modernize their network and advance towards the monitoring and maintenance standards of PGCIL, India’s intrastate transmission grid will only get stronger. While the interregional and interstate grid is quite robust, thanks to the involvement of PGCIL and private sector players of high stature, intrastate grids are still very weak. India cannot afford this.
Only if the power grid is comprehensive robust, right from interregional lines to the intrastate level, will India be able to uphold its pledge of reaching electricity to its smallest and remotest end-consumer.
The author, Venugopal Pillai, is Editor T&D India, and may be reached on venugopal.pillai@tndindia.com. Views expressed here are personal.
Fiscal year FY24 that ended on March 31, 2024 saw average performance with respect to power T&D upgrade.
Addition of new power transmission lines (of 220kV or above) stood at 14,203 ckm, down 2.9 per cent from 14,625 ckm added in FY23. Transformation capacity (substations of 220kV or above) was augmented by 70,728 MVA as opposed to 75,902 MVA in FY23 – a decline of 6.8 per cent.
Though transmission line addition was lower in FY24, it is heartening to note that 765kV line addition was inspiring – 2,119 ckm in FY24 as against 1,655 ckm in FY23. All the same, 765kV substation capacity addition was lower at 18,000 MVA in FY24 vis-à-vis 19,500 MVA in FY23.
On the other hand, development of interstate transmission system (ISTS) through the tariff-based competitive bidding (TBCB) showed signs of promise. In FY24, a record number of 23 ISTS-TBCB schemes were awarded as against 18 in FY23. It is also estimated that the total project outlay of these 23 schemes is much higher than of those awarded in FY23. Besides, longstanding players like Tata Power and Apraava Energy debuted in the ISTS-TBCB space in FY24.
The award of such a large number of ISTS-TBCB schemes should result in significant addition of transmission lines and substations in the coming years. ISTS-TBCB schemes will complement the large capacity augmentation envisaged by ISTS schemes under the RTM (regulated tariff mechanism) route as well as intrastate transmission system (InSTS) projects, which, incidentally, are beginning to see widespread deployment of the TBCB modality.
On the power distribution side, the Revamped Distribution Sector Scheme (RDSS) is likely to see accelerated implementation after contract awarding resumes post general elections. A significant number of contracts are already under implementation – both on distribution infrastructure upgrade for loss reduction, and smart metering.
With respect to smart metering, it is estimated that nearly 20 crore smart meters (for consumers) have been sanctioned out of which contracts for 9.5 crore meters have been awarded. Over 20 AMISPs (advanced metering infrastructure service providers) are on the field for smart meter deployment. As these meters will be installed at the consumer premises, project implementation will be a bit tricky.
It is therefore likely that consolidation will take place in the time to come, with larger players acquiring projects of smaller and newer players. Of course, the policy framework will need to evolve to address this eventuality.
Whatever be the transient challenges, it is very clear that India will need to stay committed to expand and strengthen its power T&D infrastructure, with an ultimate objective of achieving a technically and commercially efficient electricity value chain, and of course, electricity access to all.
The author of this article, Venugopal Pillai, is Editor, T&D India, and may be reached on venugopal.pillai@tndindia.com. Views are personal.
The recently concluded fiscal year 2024 (FY24: April 1, 2023 to March 31, 2024) was very eventful for the interstate transmission system (ISTS) market, especially considering schemes bid out under the tariff-based competitive bidding (TBCB) mechanism.
The recently-released draft National Electricity Plan (Vol.2 — Transmission) indicates massive investment of Rs.4.76 trillion in the power transmission sector during the five-year period FY23 to FY27 [April 1, 2023 to March 31, 2027].
In physical terms, the planned addition is 1,23,577 ckm of transmission lines and 7,22,940 MVA of transformation capacity. Interestingly, of the total transformation (substation) capacity envisaged, as much as 4,38,675 MVA (or over 60 per cent) would come on the ISTS side. This effectively means near-doubling of the total ISTS substation capacity that existed as of March 31, 2022.
Based on the actual performance in FY23 and FY24 (up to October 2023), it very much appears transmission infrastructure capacity addition is gaining the desired momentum.
For instance, in FY24 (up to around mid-February 2024) over 20 ISTS schemes have already been awarded under the tariff-based competitive bidding (TBCB) route —by far the highest in any fiscal year so far. Added to this are several schemes allotted under the RTM route.
It is abundantly clear that over the next 2-3 years, hectic activity will be seen in the power transmission space, and that too, involving high-end technology like 765kV AC and HVDC.
Developers will need to strengthen their supply chain management if they have to complete their projects on time. Typically, ISTS-TBCB projects have a stringent gestation period of 18-24 months.
When it comes to HVDC-based transmission systems – there are quite a few that would be coming up for award in TBCB mode – concerns of equipment availability are already surfacing. Though CERC has provided an extension in timelines, developers will need to contend with paucity in supply as there aren’t too many HVDC equipment suppliers even at the global level.
Domestic transformer manufacturers will need to expand their manufacturing, and more importantly, testing capabilities, as the demand for 400kV and 765kV transformers is poised to rise. Reportedly, smaller transformer manufacturers, which were complaining of over-capacity, are now booking orders, as a consequence of bigger players witnessing an overflowing order book.
On a technical note, India’s efforts to complement renewable energy generation with battery energy storage systems (BESS) have not really fructified as expected. This has warranted the need for higher transmission infrastructure, and that too with grid-balancing technology like STATCOM, VSC, etc. This will exert more pressure on equipment suppliers.
ISTS transmission service providers – both Power Grid Corporation of India and the private sector – would need to ensure availability of equipment and services, given the massive quantum of work on hand. Equipment manufacturers would have a expand capacity, whilst ensuring not even the slightest compromise on quality.
It is hoped that by end-FY27, India’s cumulative goal of 5.80 lakh ckm of transmission lines and 18.27 lakh MVA of substation capacity is realized, with little or no shortfall.
The author of this article, Venugopal Pillai, is Editor, T&D India, and may be reached at venugopal.pillai@tndindia.com. Views are persona.
Though power T&D continues to undoubtedly be a thrust area in terms of public and private investment, it is a matter of concern that the pace of transmission infrastructure upgrade of late has been slower than expected.
During the first eight months of FY24, addition of new transmission lines and substation (transformation) capacity has fallen short of target. According to latest statistics released by Central Electricity Authority (CEA), India could add 7,844 ckm of new transmission lines in the April-November period of FY24, meeting only 64 per cent of the targeted 12,236 ckm. In terms of substation capacity addition, the target achievement was barely 57 per cent with actual addition standing at 32,961 MVA.
Falling short of the target, and very significantly at that, is just one aspect. The actual performance in FY24 also does not comparable favourably with that in FY23. In the case of substation capacity, actual addition in FY24 (April to November), was 24.6 per cent lower than in the same period of FY23. When it comes to transmission lines, actual addition in FY24 was only marginally higher than in the previous year.
The shortfall in target achievement is largely arising from poor performance of state transmission utilities, which are mainly associated with 220kV-rated transmission infrastructure. Central utilities, mainly comprising Power Grid Corporation of India Ltd (PGCIL), and private utilities have done relatively better. This is why transmission infrastructure upgrade, at the 765kV level, has not been way off the target.
During FY24, a record number of interstate transmission system (ISTS) schemes have been awarded. The winning developers represent a healthy mix between PGCIL and private developers. This would ensure that the pace of 765kV and 400kV transmission infrastructure addition would be healthy in the coming years. The 220kV upgrade remains a matter of concern as it is largely a state government prerogative.
State government utilities should actively considering engaging private enterprise in transmission network augmentation, through the TBCB (tariff-based competitive bidding) mechanism. Some states like Uttar Pradesh, Madhya Pradesh, Odisha, etc, are working towards it but by and large, the penetration of the TBCB culture in intrastate transmission system (InSTS) projects is still very poor.
The power T&D value chain ranges from extra high-voltage lines for interregional and interstate transmission, to intrastate lines, culminating in the downstream distribution network.
Inadequacies at any stage would be a weak link in the value chain, and would militate against the ultimate objective to reaching electricity to the smallest and remotest consumer.
The author of this article, Venugopal Pillai, is Editor, T&D India, and may be reached on venugopal.pillai@tndindia.com. Views expressed here are personal.
