Economy
Gujarat Energy Transmission plans IPO on Centre's directions to raise funds for capex on capacity addition
Summary
Gujarat Energy Transmission Company and other state transcos are considering going public to raise funds for expanding infrastructure to support 500 GW of clean energy by 2030, requiring a total investment of ₹42 trillion in renewable energy.
New Delhi: State transmission companies led by the Gujarat Energy Transmission Company (Getco) are considering going public to raise funds and set up the infrastructure needed to carry 500 GW of clean energy, in keeping with the government’s directions, two people with knowledge of the developments said.
"Several transcos have shown interest in going public. Getco is among the frontrunners," one person said.
"The Centre has given a clear directive that state transcos need to pick up the pace of capacity addition and for the need of capex they would have to find ways to raise funds through asset monetisation or by going public," the second person said.
The push for state transcos to raise funds comes amid the requirement of ₹42 trillion to be invested in the renewable energy space till 2030, of which transmission infrastructure alone would need ₹9.15 trillion.
Set up in 1999, the Gujarat government-backed Getco plans to spend ₹96,000 crore over the next eight years on transmission facilities. In July, theHindu BusinessLine reported that Getco has been spending about ₹4,000 crore every year on transmission infrastructure. Over the next eight years, the company would only have to spend more.
Getco has set up transmission capacity of 73,054 circuit km and 2,203 substations, according to the company’s annual report for FY23. Its gross fixed assets were valued at ₹31,399.88 crore and net profit for FY23 stood at ₹1,256.73 crore.
Queries mailed to the ministry of new and renewable energy and Getco remained unanswered till publishing time.
RE taskforce
The "urgent requirement" of additional capital and scaled up transmission capacity for the targeted 500 GW of non-fossil energy was stressed during the 'Chintan Shivir' held in Bhubaneswar on 14 and 15 November.
Union minister for new and renewable energy Pralhad Joshi emphasised the need to install 288 GW of renewable energy capacity over the next six years and the huge investments required, according to a statement from the ministry on the conclusion of the Bhubaneshwar conclave. The minister noted that the target would require all stakeholders to work together to solve the challenges in the renewable energy space.
The minister also said a dedicated task force with all stakeholders will be set up by the ministry in collaboration with the ministry of power to achieve the goal of 500 GW of renewable energy by 2030.
Although state transcos develop the major part of the electricity transmission networks in the country, the pace of capacity addition has fallen.
Of the targeted 15,253 circuit km of transmission lines to be installed in FY25, state transcos are to be set up 8,254 circuit km, or about 54% of the overall target. Central government-owned companies – primarily Power Grid Corporation of India Ltd – have been allocated 5,413 circuit km and private companies 1,586 circuit km.
Transmission capacity addition has lagged the pace needed to meet energy transition targets. Data from the Central Electricity Authority (CEA) showed that the addition of new power transmission lines fell by half in the April-October period from a year earlier, hampered by a wetter-than-usual monsoon.
The country added 4,762 circuit km of transmission lines during the first seven months of the current fiscal, about 47% lower than the 7,026-circuit km in the year-ago period, the data showed. The capacity added was just about a third of the FY 25 target.
About 1,240 circuit km have been added by central government companies, with the states adding the most at 2,710 circuit km and private companies contributing 812 circuit km, according to the data.
A strong transmission network with adequate storage capacity is crucial for stabilising power supply, more so with increasing renewable energy capacity in the country. It is also needed to connect the Indian grid with the national transmission networks of the UAE, Saudi Arabia, Sri Lanka and Singapore under the One Sun One World One Grid initiative.
National plan
In October, the ministry of power launched the Nation Electricity Plan (Transmission) prepared by the CEA. The plan takes into consideration the requirement of storage systems – 47 GW of battery energy storage systems and 31 GW of pumped storage plants – to be developed along with renewable energy. The plan is for the transmission system to deliver power to green hydrogen and green ammonia manufacturing hubs at the coastal locations of Mundra, Kandla, Gopalpur, Paradeep, Tuticorin, Vizag, and Mangalore, among others.
As per the National Electricity Plan, over 191,000 circuit km of transmission lines and 1,270 GVA (gigavolt-ampere) of transformation capacity are planned to be added during the 10-year period from FY23 to FY32 (at 220 kV and above voltage level).
In addition, 33 GW of HVDC (high voltage direct current) bi-pole links are also planned. The bipolar configuration provides redundancy in case of failure of one monopole and is preferred for high power transmissions above 1,500-2,000 MW.
Inter-regional transmission capacity is expected to increase to 143 GW by 2027 and further to 168 GW by 2032 from the present level of 119 GW.
The transmission plan also covers interconnections with Nepal, Bhutan, Myanmar, Bangladesh, Sri Lanka as well as probable interconnections with Saudi Arabia and the UAE, among others.
