The Union government is proposing a massive investment of Rs46,000 crore to set up new power transmission capacity, which, by 2012, could move 46,000MW of power from the North-East region and Bhutan.
The investment, to be undertaken jointly with private companies, will entail setting up 12 high-capacity transmission corridors through the region, which resembles a chicken neck and connects the North-East to the rest of India.
The government plans to start work on the project during the current 11th Plan period (2007-12), using a public-private partnership model.
India’s total transmission capacity of 16,500MW is not sufficient to handle the 78,570MW of additional capacity that the government has targeted over the next five years.
As a result, the transmission sector has been a key focus for the government and it has already proposed an outlay of Rs14 trillion to build a national power transmission grid that will more than double the transmission capacity in the country to 37,150MW by 2012.
The proposed Rs46,000 crore investment is separate from the investments planned for the national power transmission grid.
The total hydropower generation potential of the North-East, including Bhutan, is about 58,000MW. With the local demand in the region expected to go up to around 12,000MW, the transmission capacity of the new system works out to be around 46,000MW.
“Though there is a huge hydroelectric power generation capacity in the North-East, a majority of which is concentrated in Arunachal Pradesh, the present transmission capacities are not enough to transfer it. We are working on a proposal to set up a new network, a decision on which will be taken shortly,” said a senior government official working in the energy sector, who did not wish to be identified.
The investments include the substation costs that will not only help in tiding over the transmission capacity constraints for the region, but also benefit other, power-deficient, states. If built, the network could enable faster trades in power and reduce costs.
“It is a good idea, as India has already signed an umbrella agreement with Bhutan for power utilization,” notes Shubhranshu Patnaik, anexecutive director at audit firm PricewaterhouseCoopers. “However, the alternatives have to be looked into. The feasibility of the project has to be established as the chicken neck has some issues due to the limited right of way and ecology of the area. There is an alternative available through West Bengal.”
“Investments in transmission and distribution have not been commensurate with the investments made in generation. Investments in transmission and distribution are only 30% of the total investments in the power sector. There should be equal investments, to the tune of 50% each, in power generation and transmission/distribution sectors,” R.P. Singh, chairman and managing director of Power Grid Corp. of India Ltd, India’s leading power transmission company, had said in an earlier conversation with Mint.
Some 40% of India’s power is lost in transmission, adding to the severe and growing power shortages in the country.
While there are normal losses during transmission, much of India’s power wastages stem from theft and unauthorized use. The power ministry has a target of bringing down such losses to 15% by the end of 2012.
That target is considered ambitious as typically, anything under 20% is considered an acceptable loss in many developed economies, according to experts.
But the power ministry’s performance in the current Plan has come under severe criticism by the Planning Commission, which is concerned that the losses are stubbornly close to 40%.
The commission now wants various states to bring down the losses to 15% by the end of the next Plan, or 2012. Power shortages remain a major concern for India both in terms of supplying households in peak winter and summer months, as well as a key for economic expansion.