Poor T&D to hit generating units

If transmission pricing issues are not sorted out soon, it would be inhibiting to the growth of new merchant power plants in the country, as there is hardly any redundancy in the system that could be traded in the spot market.

"If we are to follow a Western model of spot market for power, where a transmission or distribution company does not know who could be the potential buyer the next day, one needs to have adequate spare capacity in the grid.", said Malay De, chairman and managing director, West Bengal State Electricity Distribution Company Limited (WBSEDCL).

He pointed out that there are serious policy related issues with the construction of transmission lines.

"As it is there is a natural monopoly in the transmission sector, with Power Grid Corporation(PGC) running most transmission lines. Any transmission service provider would only build a new transmission line when it has commitment of charges to be paid for the next 25 years", De explained.

The risk lies entirely with the service user or consumer, and not with the transmission service provider.

De felt that the risk allocation matrix has to be optimally designed.

In the current situations, sub-capacity lines get built, which cannot take the pressure of an excess demand.

On top of this, there is indiscipline in the grid, as many power utilities try to overdraw from the system on account of shortage.

"As one cannot predict this unsettled interchange, a grid operator leaves some safety margin, and as a result, the spare capacity reduces further", De added.

The transmission infrastructure in the entire country needs to have redundancy as one does know who will be the potential buyer in case of a spot sale of power.