With the first quarter of FY21 ending with little economic activity, Power Grid Corporation of India (PGCIL) has pegged its capital expenditure for the year much lower at Rs.10,500 crore, as against Rs.15,313 crore in FY20.
As of March 31, 2020, PGCIL had projects worth around Rs.52,000 crore in hand, according to the company’s investor presentation promulgated on June 22, 2020, in connection with the company’s annual results for FY20.
These works on hand included Rs.34,000 crore of ongoing projects and Rs.6,000 crore from new projects. The remaining Rs.12,000 crore came from TBCB (tariff-based competitive bidding) projects.
PGCIL sees an immediate opportunity of Rs.39,400 crore from 20 interstate and intrastate projects where the Central PSU has submitted its RfQ or RfP quote. These 20 projects include 14 interstate projects (all envisaging power evacuation from renewable energy projects) with a total investment of Rs.23,400 crore. The remaining are six intrastate projects (four in Jharkhand and two in Madhya Pradesh) with a total project cost of Rs.7,400 crore.
According to information gleaned from the presentation, PGCIL undertook capital expenditure of Rs.15,303 crore in FY20. This included Rs.11,678 crore from RTM (regulated tariff mechanism) projects and the remaining Rs.3,635 crore from TBCB projects.
It is worth mentioning here PGCIL achieved capitalization of Rs.18,234 crore in FY20. Capitalization refers to completion of capital expenditure; it also means conversion of projects into functional assets. A higher rate of capitalization therefore alludes to faster completion of projects, often the result of better project management and execution techniques.
In a general sense, PGCIL envisages the following as the drivers of its power transmission business:
- Substantially low per capita electricity consumption in India vis-a-vis- global average and target to enhance it to 2,984 units (2.5 times the current level) by 2040
- Government’s long term plan of increasing electricity share in energy to 26 per cent by 2040 from 17 per cent in 2016
- Government’s GoI’s thrust on RE Capacity (175 GW by 2022) and commitment to meet the requirement of 40 per cent of installed capacity from non-fossil fuel sources by 2030
- Improved performance of discoms through proposed Amendments to Electricity Act 2003
As of March 31, 2020, PGCIL (along with its subsidiaries and JVs) owned and operated 163,222 ckm of transmission lines along with 248 substations with a combined transformation capacity of 409,898 MVA. The interregional transfer capacity of PGCIL, as of given date, was 87,090 mw that accounted for 85 per cent of India’s overall interregional transmission capacity.
(Featured photograph for illustration only)
