Power Grid is using network to improve national telecom connectivity

What does a company do after it has connected the whole country’s electricity grid? It uses the same network to improve national telecommunication connectivity. State-owned behemoth Power Grid Corporation of India is expanding in areas beyond its turf into telecom, railway electrification, state-level power infrastructure and overseas consultancy.

Despite the slowdown in the power sector, which has been troubled with bad loans, Power Grid has remained on a steady profitable path. Its profit in the past three years grew at a compounded annual growth rate (CAGR) of 17.6 per cent, and its return on net worth was 15.7 per cent in 2017-18 (FY18).

As on December 31, 2018, the company owned and operated about 151,000 circuit km (ckm) of transmission lines and 238 sub-stations with a total transformation capacity of approximately 351,800 MVA or mega volt-amperes. The average availability of transmission system and reliability were 99.67 per cent and 0.37 tripping per line respectively for the nine-month period between April 2018 and December 2018.

During FY18, the company had the highest ever capital expenditure of Rs 25,791 crore and its FY19 capex plan is similar. Its gross fixed assets stood at Rs 1.77 trillion in FY18.

“Power Grid continued to excel in project execution and retained its position as the fastest growing electricity utility in Asia for the fifth consecutive year,” said Ravi P Singh, Director (Personnel), who has been holding additional charge as chairman and managing director after I S Jha retired recently. The company is looking for a new head of the organisation.

Singh further said, “We have close to Rs 70,000 crore worth of projects in hand. Our prime focus would be to commission these. With regard to new areas, we are in an advanced stage of forming a joint venture with NTPC for power distribution-related works. We could probably see some of the identified circles being assigned to this entity for operational improvements in the coming year,” said Singh.

Among major projects concluded this year, Power Grid commissioned the Srinagar-Leh transmission system. “Despite severe geographical and climatic challenges, the Ladakh region was finally connected with the main grid,” said Singh. It also finished a Delhi National Capital Territory transmission network in record time. The company forayed into bidding for intra-state transmission projects and secured its first contract in the shape of the Jawaharpur project in Uttar Pradesh.

Power Grid also completed two initial phases of the green energy corridor (GEC) for evacuation of renewable energy. The green corridors project — which is a dedicated transmission network for renewable energy — was envisaged by the company at an estimated cost of Rs 40,000 crore in 2011. With the new government revising the targets five times, a secondary plan for solar parks was also drafted along with a revised transmission plan. Power Grid is connecting solar-rich states in the first phase — Gujarat, Rajasthan, Tamil Nadu and Maharashtra — with the national grid.

While the industrial slowdown has hit the power sector, Power Grid is looking at positive demand growth. For 2017-22, it has envisaged a growth of 107,490 ckm of lines, 333,479 MVA transformers and 14,000 Mw high voltage direct current capacity involving investments ofRs 2.54 trillion.

In its other segments too, Power Grid is expanding its wings. The company is in discussions with leading telecom tower companies such as BSNL and Indus Towers to utilise its existing infrastructure for improving reach and bandwidth connectivity.

In its international consultancy division, where it has clients across 30 countries, it plans to expand in neighbouring countries such as Nepal, Sri Lanka and Bangladesh. It is also looking at emerging markets in African and South American nations as well. Power Grid recently participated in competitive bidding in Brazil for transmission projects. Telecom and consultancy grew at 22 per cent and 14 per cent, respectively, in 2017-18.