Mumbai: India’s state-run power companies are furiously fuelling growth in the transmission sector but find slack generation capacity addition a hobble, industry officials and analysts said.
India plans to add 78,500 MW power by end 2012, mostly from the eastern and north-eastern regions of the country, while the major consumer load centres are in western and southern regions, requiring a strong national transmission grid.
“It is only transmission sector which is sustaining whole of the power sector at this moment,” S. K. Chaturvedi, chairman of Power Grid, the central transmission company that transmits 45-50% of power in India, said.
The sector is likely to see close to 20% growth in the near term and likely to pick up as we near 2012, as additional generation projects would go upstream, analysts said.
Nearly three quarters of the Rs550 billion that the Power Grid is expected to spend on strengthening transmission grids by 2012 has already tied up from various sources, Chaturvedi said, on the sidelines of a weekend conference on transmission and distribution.
It intends to spend Rs120 billion for FY10 versus Rs80.95 billion last year, setting a scorching pace.
On the other hand, it has disbursed orders worth Rs150 billion in the Jan-March to private firms, Chaturvedi added.
The companies that received these orders include Areva T&D, Crompton Greaves, KEC International and Kalpataru Power.
Power Grid has completed transmission projects for 20,800 MW power against its 11th plan target of 37,800 MW, but the generation addition not keeping pace may prove regressive, a company official said.
“The 78.7GW capacity addition program is...well behind its timetable, with only 14 percent of the total plan completed during the first 19 months of the 11 th Plan,” Fitch Ratings said in its recent note.
The government’s nudge to utilise funds quickly has been a booster for Power Grid, said S. Majumdar, director projects.
“The second benefit is that projects are now getting executed at lesser costs,” he said, adding that the bids recieved are cheaper.