New Adani transmission lines may lower Mumbai's power tariffs, say experts

Experts foresee two-rupee dip as transmission bottlenecks ease over next few years; Adani group is setting up two dedicated transmission lines covering eastern and western corridors

The decision of the Supreme Court last week to dismiss Tata Power's appeal against the Adani group's transmission project in Mumbai may pave the way for availability of affordable power in the metropolis, say experts.

The Adani group is setting up two dedicated transmission lines in Mumbai, covering the eastern and western corridors of the city. This includes a 1,000-Mw high-voltage direct current (HVDC) link between the 400 kV Kudus and 220 kV Aarey power stations on the western side. And a second 1,000-Mw transmission line between Vikhroli and Kharghar on the eastern side of the city.

"Together, these two transmission lines will bring in 2,000 Mw of power into Mumbai from affordable sources. This will bring down the per-unit power tariff for consumers," says Pramod Deo, energy expert and former chairperson of the Central Electricity Regulatory Commission.

Mumbai-based energy expert Ashok Pendse says that on an average, nearly five million consumers in the city are charged about Rs seven per unit of power. "This could come down by as much as Rs 2 per unit as transmission bottlenecks ease," he says.

The Vikhroli-Kharghar transmission line by the Adani group will come up by the second half of the 2023 calendar year, while the Kudus-Aarey line will be likely completed in another two years, that is, by the end of the 2025 calendar year, industry sources said.

In response to a mail, an Adani Electricity spokesperson said, “Adani Electricity is on target to meet 30 per cent of Mumbai's electricity demand through renewable energy sources. It is currently procuring electricity from a 700 Mw hybrid power plant. The upcoming transmission lines will support Mumbai’s distribution utilities in importing additional renewable energy and help end Mumbai’s current dependence on thermal plants located within city limits.”

Besides Adani Electricity, Tata Power and Brihanmumbai Electric Supply & Transport Undertaking (BEST) supply power in Mumbai. A mail sent to Tata Power on its future plans with regards to power procurement for Mumbai elicited no response till the time of going to press.

But Mumbai's peak power demand currently is around 3,500 Mw. This is growing at the rate of 5-7 per cent per annum, according to analysts' estimates.

The Adani Group, through its Dahanu unit, near Mumbai, generates 500 Mw, which is supplied to its consumers in Mumbai. Around 1,500 Mw more is procured from external sources by the Adani group for supply in Mumbai. This includes renewable energy sources including wind and solar power. The Tata Group, on the other hand, through its units at Trombay and Lonavala, generates close to 1,500 Mw of power, which is supplied to its consumers as well as those of BEST in Mumbai.

With power demand, however, steadily growing in Mumbai, Deo says there will be need for both additional sources of power as well as dedicated transmission lines to ensure power supply is smooth. "Mumbai has traditionally faced a capacity constraint when it comes to power transmission. This will now hopefully get corrected with two dedicated lines (from the Adani group) coming up in the near future," he says.

After several power outages in Mumbai, the Maharashtra Electricity Regulatory Commission (MERC) in 2013 gave its approval to the detailed report of the Aarey-Kudus electricity transmission project of Reliance Energy, led by the Anil Ambani group. However, MERC, which is the nodal agency for all transmission projects within the state, decided to change the scope of the project, sending it back to the drawing board, where it stayed till 2018.