The Centre has proposed an outlay of Rs1.4 lakh crore to build a national power transmission grid that will more than double the transmission capacity in the country to 37,150MW by 2012.
At present, there are five regional grids in India—northern, southern, eastern, northeastern and western—and all of them, except the southern one, are interconnected. Once the national grid is in place, transmission in the entire country will be synchronized, enabling transfer of power across the country.
Such an ambitious effort has become essential as the country’s existing transmission capacity of 16,450MW will not be able to handle the 68,700MW of additional capacity that will be added in the next five years. India has a current power generation capacity of 1.28 lakh MW.
The investments are also seen as critical in cutting down on the so-called aggregate transmission and commercial losses, under which around 40% of the total power generated in the country is lost in distribution. Of this, the major losses are on account of theft, with transmission losses accounting for around 10-15%.
Of the total investments, the inter-state systems will require a funding of Rs75,000 crore, while Rs65,000 crore will be needed for intra-state transmission systems. The Power Grid Corp. of India Ltd (PGCIL) is expected to invest Rs55,000 crore, with the balance coming from the state governments and private sector companies.
“Investments in transmission and distribution have not been commensurate with the investments made in generation,” said R.P. Singh, chairman and managing director of PGCIL, India’s leading power transmission company.
“Investments in transmission and distribution are only 30% of the total investments in the power sector. There should be equal investments in power generation and transmission/distribution sectors,” he said.
The proposed investments in the transmission sector account for 13.5% of the total fund requirement of Rs10.31 lakh crore that is required in the power sector. A large portion of this will go towards creating the national grid.
The huge potential for thermal power generation in the East, and an equally large hydro power potential in the Northeast, have necessitated the development of the national grid. Since the national grid will enable faster trades in power sales, it will reduce costs, some of which may be passed on as lower tariffs to consumers.