There appears to be some consolidation in the power transmission business with Adani Group’s recent signing of definitive agreements to acquire a large transmission asset of Anil Ambani-controlled Reliance Infrastructure (RInfra) in western India. Once acquired, Adani Group is poised to become the largest independent power transmission company owning and managing over 10,000 circuit km (ckm) of transmission lines.

The share purchase agreement recently signed by Adani Transmission Ltd seeks to wholly acquire the transmission assets relating to the Western Region System Strengthening Scheme (WRSSS) spread over Maharashtra and Gujarat. With a total network of 3,063 km, WRSSS has two components, spread over Maharashtra (2,089 ckm) and Gujarat (974 ckm).

Interestingly, WRSSS was the first interregional transmission system to be awarded under the tariff-based bidding scheme. As a corollary, it becomes India’s first fully privately owned power transmission system. Reliance Infrastructure had won this project, getting the better of several contenders including CPSU Power Grid Corporation of India. It must be remembered that WRSSS was finalized before the formal guidelines on tariff based competitive bidding (TBCB) came into force on January 5, 2011.

For Adani Group, this is the second case of expanding its power transmission portfolio through the inorganic route. In July 2016, Adani Group entered into agreements to acquire two operational transmission lines from GMR Energy, together worth some 400 ckm. Accordingly, it acquired 74 per cent in Maru Transmission Services Company Ltd and 49 per cent stake in Aravali Transmission Services Company Ltd. Both these companies own and operate intrastate transmission lines in Uttar Pradesh. In both the cases, Adani has the option of acquiring 100 per cent stake.

After the acquisition of the WRSSS is complete, Adani Group will have a total portfolio of 10,350 ckm of transmission lines spread across the country, except in the southern and northeastern region. Currently, it has six fully operational lines aggregating 5,450 ckm and with a total transformation capacity of over 12,000 MVA. Besides, transmission lines totaling 1,900 ckm are under construction in states like Rajasthan, Chhattisgarh, Madhya Pradesh, Maharashtra, Jharkhand and Bihar.

Sterlite versus Adani

Sterlite Power and Adani Group are poised to be the most dominating forces in the field of independent power transmission. However, Adani would be larger, in terms of total ckm of network, thanks to the acquisition route. Adani Group’s involvement in power transmission is very diverse. While Sterlite is entirely present in interstate lines, Adani has some projects that are intrastate (both transmission projects acquired from GMR Energy are intrastate lines in Uttar Pradesh.) Adani also has a joint venture with Maharashtra State Power Transmission Company Ltd for a 765kV system for power evacuation from generation plants in northeastern Maharashtra. This JV, Maharashtra Eastern Grid Power Transmission Company Ltd, remains perhaps the first and only joint venture between any state power transmission utility and a private sector enterprise.

Sterlite Power currently has a portfolio of ten transmission lines with a total length of 6,767 ckm and transformation capacity of around 12,600 MVA. The portfolio, comprising 400kV and 765kV lines and with seven substations, spans 15 states of India. Currently, five lines spanning 4,063 ckm and two substations, are operational.

Even though Adani would be the larger player in terms of physical assets, Sterlite Power enjoys the advantage of complete backward integration. Sterlite Power is a producer of power conductors and a full-fledged power transmission contracting and services company as well.

Also read: Newer paradigms in power transmission

RInfra, post-WRSSS

The Western Region System Strengthening Scheme, now changing hands, was the biggest component of RInfra’s power transmission business. RInfra’s power transmission portfolio is now reduced to a 74 per cent stake in Parbati Koldam Transmission Company Ltd, a joint venture with Power Grid Corporation of India for evacuating power from NHPC’s 800-mw Parbati-II and NTPC’s 800-mw Koldam project. Both are hydropower assets. RInfra also owns power transmission lines in Mumbai city, where it is a distribution licensee as well. It may be mentioned that RInfra did show initial interest in interregional transmission projects in the TBCB regime. But after the two projects that it had bid for—North Karanpura and Talcher-II—ran into all sorts of trouble and delays, RInfra has since kept away.