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APR 22 2016

Power transmission fails to attract investment

  • Economic Times, ET Bureau / Hyderabad
  • Created: Fri 22nd APR 2016

Piyush Goyal, minister of state for coal, power and renewable energy, had said on several occasions last year that transmission would be the next sunrise industry and the government would auction projects worth Rs 1 lakh crore during 2015-16.


As the power sector enters a new financial year with a record generation capacity in conventional and renewable energy, investment in transmission is clearly lagging. Of the committed Rs 1 lakh crore, projects worth Rs 18,000 crore were tendered out.

Aimed at power evacuation mainly in east and south India, these were inter-state transmission corridors in Chhattisgarh, Odisha, Andhra Pradesh, Telangana and some parts of north India.

A total of 13 projects went under tariff-based competitive bidding during 2015-16 at a cumulative estimated cost of Rs 18,300 crore. Three projects each were won by Sterlite Grid, Essel Infra, Adani Power and state-owned Power Grid Corporation of India. One was won by Kalpataru Power. These projects were shortlisted by the Central Electricity Authority. Power Finance Corporation and Rural Electrification Corporation conducted the auctions.

“In the next 12 months, at least Rs 1 lakh crore of transmission capacity will be bid out. And, I see global players coming to India. It’s a great annuity business,” Goyal had told this newspaper in June 2015.

While auctioned projects witnessed close bidding, many players left the business for lack of opportunities, said a Delhi-based power sector expert. “Whether it is European major Isolux Corsan or Indian companies like L&T, most of the noted names have either slowed down or stopped participating because big projects are not being offered,” he said.

Power transmission was opened up to the private sector in 2010 with the award of the western regional system strengthening to Reliance Infra and the east-north interconnection line to Sterlite Energy. The CERC in 2011 ruled power transmission projects should be awarded through competitive bidding like generation projects. Power Grid was the only company operating in this area till then.

The recently amended National Tariff Policy requires projects apart from those of strategic importance, which are to be nominated to Power Grid, be auctioned. “The tariff policy does not mention the demarcation, but the government is working towards awarding as many projects through bidding,” a power ministry official said.

A government statement recently said Power Grid commissioned transmission projects worth Rs 30,300 crore during 2015-16, the highest ever by the company. Power Grid executives said it would continue to participate in auctions because “nominating a project was at the discretion of the government”.  Six projects totalling over Rs 9,000 crore will be auctioned in 2016-17.

The first phase of the green corridors costing Rs 40,000 crore is being built by Power Grid, nominated to it last year. The second phase of the green corridors costing Rs 50,000 crore is likely to be auctioned.

TEPID RESPONSE
 

Project

Date of Award

Estimated cost (Rs cr)

Bidder

Gurgaon

2016 March

1,000

Sterlite Grid

NRSS 36

2016 March

500

Essel

Warangal

2016 Feb

3,000

Essel

OPGC

2015 Dec

1,000

Sterlite Grid

Beyond Vemagiri

2015 Nov

3,000

PGCIL

HEPs Bhutan

2015 Nov

1,200

Essel

ATS Tanda

2015 Oct

350

KPTL

Maheshwaram

2015 July

400

Sterlite Grid

Chhatisgarh A

2015 July

1,100

Adani

Chhatisgarh B

2015 July

1,500

Adani

Sipat

2015 July

750

Adani

Gadarwara A

2015 April

2,300

PGCIL

Gadarwara B

2015 April

2,200

PGCIL

Total FY16

 

18,300

 

Source: PFC & REC

 

Tags

Delhi Himachal Pradesh TOTAL Adani Enterprise Limited Tanda TPS Bhutan Odisha Andhra Pradesh Telangana Adani Power Ltd Reliance Infra Sterlite Energy Limited Renewable Energy Certificates Power Grid Power Finance Corporation Finance Grid Renewable Energy Central Electricity Regulatory Commission Coal Tariff Energy Central Electricity Authority Minister of State Sterlite Rural Electrification Corporation Rural Power Tariff policy Electricity India National Tariff Policy REC

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