Power transmission shoots in the dark with no set goals

While the central government has clear targets for renewable energy and power distribution sector, the power transmission sector seems to have been left out. Since the start of the financial year, eight projects of Rs 9,635 crore have been announced to be offered through tariff-based competitive bidding (TBCB). However, these projects are at different levels of selection and yet to be awarded. The government plans to offer projects totalling Rs 4,500 crore, but there is no timeline yet.

This comes at a time when the Centre has said Rs 50,000 crore worth of transmission projects will be awarded by the end of the financial year. According to officials, the amount reflects not the number of projects but the opportunity for the sector. Last year, projects worth Rs 18,000 crore were tendered out.

“There is no particular benchmark or cost structure that is being followed to award transmission projects. When we say Rs 50,000 crore, it includes inter- and intra-state corridors, projects that state-owned Power Grid Corporation would build and also the spillover from last year,” said a senior power ministry official. He said the count for the projects would keep increasing as and when the screening committee clears the projects.

The inter-departmental screening committee of the power ministry clears power transmission projects, which then move to the empowered committee that decides whether it would be awarded through TBCB or nominated to Power Grid.

Power transmission sector was opened up to the private sector in 2010. The Central Electricity Regulatory Commission had, in 2011, mandated that power transmission projects should be awarded through TBCB like the case with generation projects. Power Grid was the only company operating in this space till then.

The recently amended National Tariff Policy, 2016, mandates that apart from projects of strategic importance that would be nominated to state-owned Power Grid, all should be awarded through TBCB. However, the perimeter of nomination is not defined.

Executives said the private sector is in a fix over the government projections. “The Centre should encourage states to adopt bidding route to reduce cost, which would help in achieving UDAY (Ujwal Discom Assurance Yojana) targets. In the recent past, TBCB projects have showcased that tariff and costs of competitively bid projects have been at least 30 per cent less than projects awarded under the cost-plus mechanism. State utilities can then deploy their capital to improve operational efficiencies,” said a senior power sector expert.

Tarang, the power ministry’s monitoring portal for power transmission projects, cites 27 inter-state and 11 intra-state projects under the upcoming category. The cost is not mentioned. Intra-state projects fall in the regulatory ambit of the state governments. Most of the intra-state projects are nominated to Power Grid. Of the 27 inter-state projects, the Empowered Committee is yet to decide on the mode of awarding the latest 10 projects.

This year, the focus is on inter-regional corridors and connectivity for mega solar projects coming up in several states. Some of the projects are North Eastern Region Strengthening Scheme, Eastern Region Strengthening Scheme, and transmission system for solar parks in Rajasthan, Gujarat and Karnataka, among others, which would be awarded under the bidding route.