1. Power Grid has some distance to go

Power Grid has some distance to go

The parliamentary report on its performance comments on congestion in Southern India

By: | Updated: March 30, 2016 1:28 AM

It may have done well but its efforts to upgrade the country’s transmission sector haven’t been enough, yet. That is the verdict of the parliamentary committee on public undertakings that submitted its report on the Power Grid Corp (PGCIL), the state-run power transmission giant, last month.

Drawing upon the comptroller and auditor general’s (CAG’s) audit of the company’s performance in the 2007-2012 period, the panel praised PGCIL for successfully putting in place a national grid by integrating all five regions on 31st December, 2013. However they highlighted that congestion still existed on the grid, especially for power flow to the southern region. This meant that despite its existence, the benefits of the national grid weren’t trickling down to consumers.

Power Grid has a virtual monopoly over inter-state transmission systems in the country, accounting for nearly 97% of all lines—120,000 circuit kilometers (CKM) of transmission lines (mostly ISTS) and a power transformation capacity of 240,954 MVA. Unlike in generation, private sector participation in transmission has only recently come of age with companies like Adani Transmission, Sterlite Grid, Kalpatru Power and Essel Infra winning projects through competitive bidding in the last one year.

The report said, “The committee feels that the grid should also be capable of meeting deficit in a particular region like the southern region from a surplus region like the western or eastern region, as observed by C&AG in their audit report. Only then can the actual purpose of having a National Grid be considered to be accomplished.”

PGCIL, in its response, while agreeing that the current capacity for power flow to southern regions was inadequate, held that capacity augmentation was a continuous process based on upcoming generation capacity.

On congestion, the company told the committee, “Some congestion being encountered in transfer of power towards the southern region would be removed with the progressive commissioning of inter-regional transmission lines already under implementation.” It highlighted that only 0.3% of the total energy generated was lost due to transmission congestion in FY15. The inter-regional power transmission capacity is targeted to reach 72,250 MW by FY17 from the current capacity of a little above 50,000 MW.

The report also lamented the regional variation in prices of electricity sold on the power exchange. It said: “Apart from ensuring electricity transfer at cheaper prices across the grid, it is also important to ensure that benefits of the formation of national electricity grid, particularity the fall in prices, trickle down to the end user of power, which, in view of the committee, is not happening presently.”

PGCIL contested the conclusion, saying that with the availability of more transmission corridors that reduce congestion, the effect on prices would be visible. At the same time, zero congestion for 365 days in a year could mean over-investment in transmission. It could also see many power stations with higher fuel cost that are located downstream closing down.

The parliamentary committee further pointed out that Power Grid had not been using the important technical parameter of total transfer capacity (TTC) to grant medium-term open access to clients. This, it felt, presented an unclear picture to potential users of the transmission corridor since use of the transmission capacity (TC) parameter could be misleading. TTC, which is a measure of the capacity of a corridor as a whole to reliably move power from one region to another, is often less than the transmission capacity due to system limitations.

“Considering TTC as an important yardstick to evaluate capacity augmentation of grid, the audit has also highlighted that during the XIth plan, as against the cumulative transmission capacity of 26,050 MW, the total transfer capacity was only 11,530 MW,” the report said.

Although Power Grid explained the difficulties in declaring TTC years in advance citing uncertainties in the commissioning schedule of generating stations, the committee asked the power ministry to firm up its view on use of TTC as a benchmark for granting open access and mandate Power Grid to disclose the same at least four years in advance. Power Grid, which also acts as the central transmission utility (CTU) in charge of granting access to consumers, has declared TTC only for the next fiscal year as opposed to the electricity regulator mandating TTC declaration of four years.

PGCIL apprised the committee of the changes in environment and forest clearance norms and compensation for right of way (RoW) that are expected to facilitate projects. It said it could start work on transmission corridors right after the first stage of forest clearance, with the new norms allowing a working permit for linear projects even as stage 2 clearances were awaited. The new norms, along with higher compensation for RoW, would cut down project implementation time, it said.

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