Interstate power transmission projects are expected to dominate the long-term capex plans of Power Grid Corporation of India Ltd (PGCIL).
Addressing an investor conference discussing PGCIL’s performance during Q1 of FY24, K. Sreekant, Chairman & Managing Director, PGCIL, said that much of the company’s capital expenditure over the next nine years, which is up to 2032, would be dominated by interstate power transmission projects.
These interstate projects would include both RTM (regulated tariff mechanism) and TBCB (tariff-based competitive bidding) modes.
According to analysis by T&D India, PGCIL has had a successful time with interstate TBCB projects in FY24, winning at least eight projects during the first four months (April to July) of the ongoing fiscal year.
Speaking of intrastate projects, which are mostly under the TBCB route, PGCIL expects to invest Rs.37,000 crore over the next nine years, which is up to 2032. The Central PSU is quite active in the intrastate TBCB space. In Uttar Pradesh itself, PGCIL is associated with four schemes apart from having commissioned one in Madhya Pradesh. The opportunity basket for intrastate TBCB schemes is inherently small with only a few states – Uttar Pradesh, Madhya Pradesh and more recently, Odisha — adopting this modality in developing their intrastate transmission network.
In the cross-border power transmission space, PGCIL expects capex of Rs.10,000 crore while another Rs.7,500 crore would be invested in international projects. In the coming years, PGCIL will be seen getting active in Kenya’s power transmission space, under a programme headed by Africa50.
Over 90 per cent of PGCIL’s capex up to 2032, will be in PGCIL’s core area of power transmission covering interstate, intrastate, cross-border and international projects.
The remaining 10 per cent or so will be invested in relatively new and non-core areas like solar power, smart metering and data centres. As already reported, PGCIL has already clinched a big smart metering order in Gujarat, entailing the deployment of 67 lakh smart meters.
Also read: PGCIL Will Surpass FY24 Capex Target, Says CMD
PGCIL, it is learnt, will be implementing its non-core projects through a new subsidiary Powergrid Energy Services Ltd. The PSU has already created another subsidiary Powergrid Teleservices Ltd for housing all its telecom-related activities.
