Column: Transforming power transmission

Jun 18 2014, 01:03 IST
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SummaryA key reform for the power sector would be to push private investment in the transmission business

In July 2012, over 620 million Indians faced a power blackout due to the cascading failure of the northern and eastern grids. With miners trapped underground, metro services shut down in the capital and hundreds of trains stalled across the nation, the country came to a grinding halt. The global media did not mince words.

“How could a superpower run out of power?” wondered The Daily Mail. 

“The widespread power blackouts that hit India’s (Baa3 stable) north, east and northeast regions on Monday and Tuesday have had a credit negative effect on the country’s economic activity,” Moody’s Investors Service said.

The government prepared a recommendation report within two weeks. Power Grid Corporation has swiftly implemented many of the action items. Yet, the national capital has once against faced a power blackout, thus raising some fundamental questions. When will the country have a truly robust transmission network? How will the government ensure that it is able to transport all the energy that India is capable of producing? Will the public sector be able to handle the entire country’s bulk transmission requirements?

It is time to prioritise investments in transmission.

What New Delhi has been facing for the past few days, is a microcosm of what the rest of the country faces every day. While residents of Delhi suffered from peak summer heat, there was surplus power capacity lying idle in the surrounding areas of Delhi. This phenomenon occurs daily on a much larger scale in the rest of the country. On one hand brand-new power plants in Chhattisgarh and Orissa are lying idle due to lack of connectivity. At the same time, industrial consumers in Tamil Nadu and Kerala are paying R9 per unit and are still facing regular load shedding.

Despite having installed power generation capacity of over 225 GW and a power demand of only 135 GW (as of May 2013), the country is still experiencing peak deficits. Yes, a large part of the problem is fuel availability, lack of railway links, delays in environmental clearances. But an equally large problem is the lack of evacuation capacity, which is often overlooked by most, apart from when there is a grid collapse.

The country’s natural resources are skewed towards the East, while the biggest demand will continue to be in the North and the West. In 2015 and 2016 alone, over 30,000 MWs of power generation capacity will be added in coal-rich states of

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