THE power sector in India has seen remarkable transformation in recent years in the area of generation. However, a major obstacle on the way is the failure of the transmission sector to adapt to the rapid changes occurring in the system.

Lack of transmission capacities results in wastage of electricity as states with surplus power are unable to transmit it to those facing an acute scarcity. Northern states such as Punjab, Uttar Pradesh and Rajasthan, where demand for electricity soars during the summer months, are facing an acute shortage of electricity. And because of this shortage, power costs are soaring.

Despite surplus generation in other parts, many independent power producers are unable to supply electricity to power-starved northern states because of lack of transmission facilities. Bottlenecks in the grid caused by severe congestion have resulted in the failure to evacuate about 25,000MW of capacity from the surplus states to the north in recent weeks.

The Power System Operation Corporation (Posoco), a government company which manages the national grid, has reportedly imposed restrictions on transporting power from the eastern region to the north to prevent grid collapse. About three years ago, there were major blackouts across northern, eastern and north-eastern India, affecting more than 600m people, as some of the northern utilities allegedly drew more power.

With the transmission infrastructure unable to support such huge transmission of electricity, there was a grid collapse and the consequent blackout.

Reforms in the electricity sector, especially the entry of private player, have boosted India’s electricity generating capacity. Private companies have also entered the distribution sector, especially in some cities including Delhi, bringing about efficiencies.

But the transmission sector has failed to adapt to the changes, though it was opened up for the private sector about five years ago. While India’s power generation capacity has jumped by 50pc over the last five years to 272,000MW, transmission capacity has increased by just 30pc.

Private players account for 38pc of power generation capacity today, but their share in the transmission sector is just 3pc, according to the Central Electricity Regulatory Commission, the industry watchdog.

The Cerc, in a recent report on congestion, has called for enhancement of transmission capacity through investments from both the public and private sectors.

The Consumer Education Re­search Society (Cers), Ahmed­abad, a power sector NGO, recently wrote to Piyush Goyal, the minister of state with independent charge for power, coal and new and renewable energy, urging privatisation of the transmission sector to boost efficiencies. It also criticised state-owned Power Grid Corporation of India Ltd (PGCIL) for exercising monopoly over the sector.

According to K.K. Bajaj, chief general manager, Cers, “power generation capacity has increased in India but PGCIL has failed to match pace with power generation capacity addition. It has failed to create transmission network in line with commissioning of power projects.” The NGO has called for a dismantling of the monopoly regime in the transmission sector.

The lack of adequate transmission infrastructure deprives consumes of electricity and also results in power plants being forced to shut down or operate at low plant load factors, complained the Cers. It also cites a recent study, which noted that over 3bn units of electricity were wasted in 2014-15 because of congestion on transmission highways. In the previous year, the figure was 5.3bn units, enough to ensure supplies to the national capital for nearly two months.

THE BJP-led National Democratic Alliance (NDA) government, led by Prime Minister Narendra Modi, has aggressive plans for the power sector. It is committed to providing affordable, 24x7 power to all households by 2019, an overly ambitious goal considering the appalling state of power supplies all over India, except in a few cities such as Mumbai and New Delhi.

Worried about the mismatch between its ambitious plans and the reality — especially with the pathetic state of the transmission network — the government is drawing up a 20-year ‘Perspective Transmission plan.’

Of course, PGCIL would continue to play a major role in enhancing the transmission capacities, but the government is seeking more private investments in the sector. India currently has an inter-regional power transfer capacity of 46,450MW – as against a targeted capacity of 65,550MW. The government plans to raise this to 72,250MW by the end of 2016-17.

PGCIL currently operates 113,587 circuit km (Ckm) of transmission lines; it plans to invest about Rs1trn to raise the inter-regional power transfer capacity to 72,250MW. The government also hopes to raise the transmission network to 360,000Ckm by 2017.

The NDA government last year set up an ambitious target of installing 100,000MW of solar power capacity (raising it five times from the previous goal of 20,000MW) and 60,000MW of wind energy capacity by 2022. The government wants to supply this green energy at less than Rs4.5/unit.

India’s current renewable energy capacity is less than 36,000MW, and the government is keen to add a whopping 175,000MW to this over the next seven years.

The biggest obstacle in achieving these goals is again the lack of transmission infrastructure, more so in the case of evacuating green energy. Green energy corridors will have to be set up to link with the national grid.

Solar parks are being planned across the country, but to evacuate this electricity on exclusive ‘green corridors’ will prove to be a challenge. Unlike thermal power, green energy cannot assure stability of the power grid because of fluctuations in capacity, especially during night, or when wind speeds slow down.

Though the government is eager that private companies bid for transmission projects, their response has been lukewarm. In fact recently some private companies pulled out of the auction for two power transmission projects because of uncertainties in the sector.

Published in Dawn,Economic & Business ,July 13th, 2015

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