T&D India attempts to outline key contours that will describe the power sector over the next five years. While the primary focus is on the power transmission and distribution (T&D) sector, we are also looking at related areas.
Power Generation
- Traditional coal-fired power plants will lose their prominence making way for renewable sources like solar and wind. With improved domestic coal availability, stranded coal-fired plants are expected to revive leading to an overall reduction in plant load factor (PLF) despite an increase in electricity generation.
- The ultra mega power project series that hasn’t seen much progress beyond the Sasan and the Mundra projects, will slip into oblivion.
Power Transmission
- It is expected that by 2022 India will get its first 1,200kV commercial power transmission line. By current thinking, it would be the Wardha-Aurangabad line in Maharashtra.
- The next five years will see intensification of 400kV and 765kV lines. As of September 2016, the total network of 765/400kV lines, at 1.80 lakh ckm, had already exceeded that of 220kV lines, at 1.20 lakh ckm.
- Power Grid Corporation of India is expected to dominate interregional transmission lines, even in the tariff-based competitive bidding (TBCB) mechanism regime. As of July 31, 2017, the total transmission capacity of inter-regional links was 76,550 mw, with PGCIL’s share close to 80 per cent.
- HVDC technology (typically 500kV and 800kV bipolar lines) will gain traction with participation of both PGCIL and private entities. Currently, there are at least six such lines (aggregating 12,939 ckm) with PGCIL owning four of these (9,454 ckm).
- Forward movement will be visible with respect to high-voltage transnational power transmission lines such as those connecting India with Nepal, Bhutan, Bangladesh, Myanmar, etc.
Village electrification
In around August 2015, a total of 18,452 Indian villages were un-electrified and it was resolved to electrify all of them (as per the definition of an electrified village) in 1,000 days, which is by around May 2018. As of August 20, 2017, only 18 per cent of the target remained to be achieved, excluding 5 per cent of the villages (966 in number) that are uninhabited. The village electrification drive is very much on track. However, the thrust of the government should be in intensifying village electrification as 23 per cent of the total Indian households still do not have an electric connection. In terms of numbers, this is still a staggering 4.19 crore households out of a total of 17.87 crore households.
Power distribution
- Major reforms are expected in the power distribution sector with a view to reducing commercial losses of utilities. With most states now enrolling for the UDAY (Ujwal Discom Assurance Yojana), the positive effects of the revival scheme will be felt. Discoms should be in a better position to undertake capital expenditure for infusing technical efficiency in their operations. A recent government release that participating state government power distribution utilities have achieved net savings of around Rs.15,000 crore till March 2017, following their enrolment in the UDAY scheme. Further, in the participating states, the Average Cost of Supply (ACS) minus Average Revenue Realized (ARR) gap has come down by almost 14 paise per kwh and the AT&C losses have reduced by almost 1 percentage point in FY 17.
- Privatisation of power distribution, even if it means through the distribution franchisee model, should be accelerated through suitable policy interventions.
- Urban centres are likely to see Smart Grid-like features in their power distribution network. Basic features like AMR, AMI, ToD metering should make their presence felt. While privatized power distribution circles already have smart features in their network and also at the consumer’s end, one can expect Smart Grid architecture to slowly percolate into networks of state government-run power distribution utilities.
- Initiatives to curb power theft through technological interventions and other demand side management measures like demand response are expected in the coming years, especially from private power utilities.
Testing of high-voltage equipment
India’s newly-opened testing laboratory, National High Power Test Laboratory Pvt Ltd (NHPTL), started operations in the first week of July this year. Over the next few years, NHPTL is expected to intensify its operations and move to short-circuit testing of transformers of even up to 765kV rating. Even existing laboratories like CPRI and ERDA are expected to augment their capabilities, and extending their scope of activity to renewable energy-related equipment.
Renewables
Perhaps the biggest transformation that we can expect is in the renewable energy sector, particularly solar and wind. The government has set a target of 100 GW of solar capacity by 2022. Though this may not be achieved totally, considering that the cumulative achievement as of June 2017 was a little less than 15 GW, one can expect acceleration in capacity addition in the coming years. States should be more aggressive in solar capacity addition and too much reliance on Central programmes would not be desirable. Wind energy is also expected to see the emergence of tariff-based bidding mechanism, which will bring substantial reduction in tariffs. One can also expect that at least one pilot project of offshore wind energy will be installed by 2022.
Tariffs
Perhaps the most important issue that the power sector will need to deal with is tariffs—be it in the conventional or the renewable energy sector. Solar tariffs, for instance, are falling rapidly and there is every fear that power utilities will dither in honouring their older power purchase agreements, in view of cheaper solar power available subsequently. Such pressure tactics can derail the investment cycle in the solar power industry, adversely affecting goals set out in the National Solar Mission.
Even in the case of coal-fired power plants that are run on imported coal, there are several instances where power producers are unable to sell electricity at tariffs agreed in the power purchase agreements. This has in turn happened as international coal prices have risen due to unforeseen circumstances. While there is no easy way out of such a situation, the government should do all that it can to find a solution that can protect the interests of all stakeholders.
(T&D India sought views from eminent industry players from a diversity of sectors in the power T&D space, on what they feel were the key changes that have taken place in their respective industries over the past three years, and what they expect over the next five years or so. These views, forming the core of the “Power T&D Vision 2022” story, are presented in the following links.)
Tushar Gupta, Executive Director, NTL Lemnis
Ravichandran Purushothaman, President, Danfoss Industries Pvt Ltd
Amit Vaidya, Director — Strategic Customer Team, Sensus India
Hartek Singh, Chairman & Managing Director, Hartek Group
Manas Kundu, Director Energy Solutions, International Copper Association India
Soeb Fatehi, Immediate Past President, COSMA
Vinod Raphael, Country Business Head—OMRON Electronic & Mechanical Components Business, India
