Transmission sector: removing handicaps
Gireesh B Pradhan
Gireesh Pradhan, addtional secretary ministry of power
Transmission in the Indian power sector has always been the non-glamorous segment, mostly neglected but taken for granted. Over the past few years the pace of investment in this segment has increased as the realization that strengthening both the state and central transmission networks is vital for the power sector.
If one looks at the growth of the transmission lines and associated facilities, the track record is impressive; but if one factors in the vastness of our country and the concentration of our resources, we have a long way to go in expanding transmission lines. Quite apart from the expansion programme, the state transmission lines also need to be upgraded and in some cases replaced, given their vintage. The cash-strapped state utilities till recently have been concentrating their resources on adding generation capacity, which has left little over for investments in transmission.
The central transmission utility, Power Grid, has during the 9th and 10th plan periods sought to build a strong grid that integrates the different regions. Thus, from a level of less than 5,000 Mw of inter-regional transfer capacity at the beginning of the 10th plan, it stands today at over 20,000 Mw. By the end of the 11th plan it could be anywhere between 32,000 and 37,000 Mw. India today has one of the largest HVDC systems in the world and is seriously trying to develop 1,200 kV AC transmission lines. The challenge before the central transmission utility is to build a strong hybrid backbone of UHV lines that will allow for large transfers from one part of the country to the other and integrate the larger capacities that are going to come up both in the public and private sectors. In the coming years, generation capacity location will be severely constrained by a number of factors. Added to that would be the strong push towards renewable energy; a grid that doesn’t plan for the future integration of different sources of power would handicap the growth of the power sector. The future requires a very “smart” grid and Power Grid needs to move fast towards taking all the necessary steps to create the unique Indian “smart grid”.
Historically, it has been the states which have created transmission networks in their states. Most of the larger states were fairly advanced during the 60s and 70s and it was a state utility that first inducted the HVDC system in India. But as mentioned earlier, the priorities for the states came to be generation capacity and later distribution. The ratio of investment, which ideally should have been 2:1:1 amongst the three broad segments of generation, transmission and distribution, was unfortunately given up. The result is that the present intra-state transmission is in dire need of expansion, and more importantly, of strengthening. The restructuring of the monolith boards has allowed the transmission utilities in the states to concentrate on expansion and strengthening, and some states have been able to come up with plans to do so with funding from both domestic and multilateral funding agencies. This area, however, remains one of great concern and the Government of India is attempting to assist the states with both expertise and help in sourcing finances. One of the gaps that many states have is the lack of an integrated approach on transmission planning. Unless this is addressed, problems on the transmission side will remain.
There is a general view that “transmission is a natural monopoly” and thus the private sector has little role to play. This is far from the truth. The private sector has a crucial role to play in a segment that hitherto has been the closed monopoly of state and central utilities. The efficiencies that the private sector brings in are vital for the transmission segment as the ultimate beneficiary is the consumer. The competitive bidding route that is being followed for private players to bid for transmission lines has received enthusiastic support in the private players. Some states too are following the central lead and although still tentative, more and more interest in private sector participation is being shown by states. To the states this also makes perfect financial sense as scarce resources need not be deployed on the projects going through the bidding route.
There is a vital element in the transmission segment that is at the crux of the reform process – “open access”. Open access insofar as the central transmission utility is concerned has by and large been satisfactory. However, with the states it has almost proved a non-starter and in some cases the state governments have misinterpreted the provisions of the Electricity Act, 2003 to actively block such access. States have also been slow in ring-fencing the State Load Dispatch Centres which all the states are committed to do within a set time-frame. State regulators need to play a much more pro-active role in allowing open access. Consumers must have the freedom to procure their power from such sources that give them the assurance of both quality and price. Similarly, power producers within the state should not remain prisoners of the transmission utility in that state. So also it is necessary that intra-state open access is allowed and the fear of the distribution utilities that paying customers would flee should be allayed.
(Views expressed in this article are personal)
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