Very recently, Power Grid Corporation of India Ltd (PGCIL) won three transmission projects under the tariff-based competitive bidding (TBCB) mechanism.
All the three projects are associated with power evacuation from upcoming solar parks in Rajasthan. These are all part of the Green Energy Corridor (GEC) that involves setting up a power transmission network for evacuation from upcoming solar and wind farms.
The phenomenon of developing large power transmission lines (interregional or interstate) during the TBCB route suffered a prolonged lull period. Given this, the award of these projects is indeed a welcome revival. According to statistics released by Central Electricity Authority (CEA), no TBCB projects were awarded in the whole of 2020. This sluggishness in TBCB activity, though partly explained by the disruptions caused by the pandemic, was nevertheless a prolonged one.
Projects under the GEC are likely to be the mainstay of TBCB-based power transmission projects. They are also expected to be the body of opportunity available for developers, percolating to contractors. It is estimated that GEC projects worth nearly Rs.20,000 crore are likely to be awarded under the TBCB route, in the foreseeable future. This apart, there will be non-GEC TBCB-based projects as well.
It is important that Green Energy Corridor projects are processed and awarded expeditiously. This is so because green energy projects, unlike conventional thermal of hydropower projects, have a much lower gestation period. It is therefore important that power transmission infrastructure is put in place before the wind or solar generation project commissions. This will ensure faster returns on investment to green energy developers, apart from generally shoring up power availability to the nation.
Speaking of the three projects awarded to PGCIL, they involve setting up of evacuation infrastructure for 8.1 GW worth of solar parks/complexes coming up in Rajasthan. This infrastructure comprises a high capacity 765kV and 400kV transmission system interconnecting substations at Bhadla-II, Fatehgarh-II, Sikar and Khetri has been planned. The overall project also involves establishment of new 765/400kV substations at Sikar-II and Narela, and new 400/220kV substations at Bikaner-II and Ramgarh-II.
Shrinking developer base
What is mildly worrisome is that the developer base for TBCB power transmission projects is somewhat shrinking. Right now, prominent developers can be subsumed by three leading names – PGCIL, Sterlite Power and Adani Power. Leading EPC contractors like KEC International, Kalpataru Power Transmission, Larsen & Toubro, etc. are consciously keeping away from the TBCB space. All the same, the fact that the Centre has cleared the proposal of an infrastructure investment trust (InvIT) for power transmission projects by PGCIL is a good sign. Not only will this, unlocking investment in operational assets, it will also provide a broader spectrum of investors to benefit from the Indian power transmission story.
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.