TSO Focus

Power Grid Corporation of India: Doubling network [free access]

October 1, 2008

India is the fifth biggest power generator in the world. As of March 31, 2008, it had a generation capacity of about 143 GW, with an annual output of over 700 billion units.

The Indian economy is growing by 7-8 per cent per year. Its energy needs are also growing strongly, by 8-10 per cent per year. Over the next four years, by March 2012, the government plans to increase the total power generation capacity to 223 GW, a CAGR of 11.7 per cent.

The power sector in India is still dominated by government-owned units, despite a move in the mid-1990s to open the sector to private participation. The private sector accounts for only 14 per cent of the generation capacity and less than 10 per cent of distribution. Its share of the transmission networks is even more insignificant, at less than 1 per cent.

India has two kinds of transmission companies – a central transmission utility (CTU) and about two dozen state transmission utilities (STUs). The CTU is responsible for transmission between states and between regions. The STUs are responsible for transmission within states.

Power Grid Corporation of India Limited (PGCIL) is the designated central transmission utility. It owns and operates 80 per cent of India’s inter-state transmission networks and, more importantly, accounts for 95 per cent of the transformation capacity at that level.

PGCIL currently (as of September 2008) has a network comprising about 68,000 ct. km of transmission lines and 115 associated EHVAC and HVDC substations with a total transformation capacity of 75,000 MVA.

Matching generation capacity addition

There are two key tasks that PGCIL faces in the short and medium term. One, to expand transmission capacity to match the increase in generation capacity. Two, to complete the development of a national grid that will facilitate movement and trading of power.

Over the next few years, the demand for transmission capacity is expected to increase dramatically, driven primarily by significant increases in generation capacity (12,000-15,000 MW per year versus 4,000-8,000 MW per year in the past) and secondarily by the new emerging requirements of open access, trading and inter-regional transfers. The transmission system has to not only expand in capacity but also be more flexible and have greater margin to enable integration of power sources like merchant plants, captive plants and wind farms.

Transmission requirements are also becoming more complex in nature. An electricity market is beginning to develop in India. Bilateral trades have been taking place for almost five years. The country’s first power exchange became operational in July this year. The regulators have mandated provisioning of open access. A large number of merchant power plants are being developed. Power from these plants will flow in multiple directions, and not always declared months in advance. There will be wider variations in generation and demand on a daily/seasonal basis.

As a result, it has been estimated that the reliability and operation margins would need to be close to 25-30 per cent of the transmission capacity, higher than in the past. The power system needs to have greater redundancies to maintain system parameters.

National Grid development

PGCIL is also responsible for developing a national grid, to enable transfer of power from power-surplus regions to power-deficit regions; to enable optimal development and utilisation of coal and hydro resources that are located far from the consumption centres; and to improve the economy, reliability and quality of power supply.

The national grid is being developed in phases. In the first phase, which was completed in 2002, PGCIL created an interregional power transmission capacity of 5,050 MW. About 2,000 MW of this capacity was created using HVDC back-to-back links. The rest was developed using 400 kV and 220 kV A/C links.

In the second phase, which was completed in 2007, the interregional capacity was increased to about 14,000 MW, through a combination of high capacity A/C (765 kV and 400 kV) and HVDC lines. In this phase, the North-East-West (NEW) grid was formed through the synchronisation of all regional grids, except the southern grid, in August 2006. This is one of the largest synchronously connected grids in the world, handling a total generation capacity of 88,000 MW from 250 power plants. The southern region is also technically connected to this grid, but asynchronously.

In the third phase, which is to be completed by 2012, the interregional power transfer capacity will be further raised to 37,700 MW. At the end of this phase, there will be a ring of 765 kV transmission lines interconnecting the eastern, western and northern regions.
As of September 2008, this interregional transfer capacity stood at about 17,000 MW.

Investment plans

To achieve these challenging tasks, PGCIL has drawn up a very aggressive investment plan for the period 2007-12. It aims to invest INR550 billion during this period, adding about 67,000 ct. km in line length and around 90,000 MVA in transformation capacity. In 2007-08, PGCIL invested over INR66 billion.

Technology choices

PGCIL has tried to be an early adopter of new technologies and is moving towards higher voltage transmission systems. In 2007, it commissioned India’s first 765 kV transmission line and substation.

It is currently focused on introducing 1,200 kV A/C voltage in the country. It is establishing a 1,200 kV ultra high voltage A/C test station at Bina for the development of 1,200 kV equipment. It has also formulated a national plan to implement a + 800 kV, 6,000 MW HVDC bi-pole line that will connect the north-eastern region of the country which is rich in hydro resources to the northern region which has a deficit of power. PGCIL claims that this line would be the first of its kind and also among the largest in the world, carrying power over more than 2,000 km.

It is looking to establish five or six pooling stations across the country and to develop a series of high capacity corridors, using + 800 kV 6,000 MW HVDC and 800 kV/1,200 kV AC corridors.

Changing role

PGCIL is currently also responsible for load despatch at the national and regional levels. It operates five regional load despatch centres. It is also setting up a National Load Despatch Centre in New Delhi with a backup at Kolkata.

In future, however, the government does not want PGCIL to remain both the central transmission utility and the controller of the regional load despatch centres. The policymakers and regulators believe that such a dual role could discourage private sector participation in transmission, which the government wants to promote. In fact, the Indian government has already approved the formation of an independent system operator, similar to agencies in the US and the UK. It would operate as PGCIL’s subsidiary for the first three years of operations and independently thereafter.


The Government of India has, of course, been trying to increase private participation in power transmission for quite some time. It has asked PGCIL to enter into joint ventures with private players for the development of specific transmission lines. In the past, PGCIL has been accused of dragging its feet on these joint ventures, not wanting to give up its monopoly. Of late however, it has made some moves by forming joint ventures with companies like Reliance Infrastructure, Torrent Power and Jayprakash Hydropower. It does have one joint venture with Tata Power Company which is already operational, bringing power from Bhutan into India. The Government of India has also announced more than a dozen new projects that will be reserved for the private sector. PGCIL, therefore, can expect a bit more competition.


Financials

PGCIL had revenues of INR50.82 billion in the latest financial year (ending March 2008), up 25 per cent over the previous year’s figure of INR40.97 billion. Its profit after tax in 2007-08 was INR14.48 billion, 18 per cent higher than the previous year’s INR12.29 billion.

PGCIL went public in September 2007, when it entered the capital market with its IPO, offering 13.6 per cent of its equity. The offer was extremely successful and was oversubscribed by 65 times. The company raised about INR30 billion. The Government of India still holds 86.4 per cent of equity in the company.

Diversification
Over the past few years, PGCIL has attempted to diversify its business. It has built up a telecom network of about 20,000 km on which it offers leased capacity to telecom carriers as well as large enterprise customers. PGCIL also offers consultancy services to other power organisations in India and overseas. In Afghanistan, it is involved with the construction of a 202 km, 220 kV D/C transmission line. It is also laying an under-sea line to transmit power from a generating plant in Sri Lanka to load centres in India. Over 7 per cent of its revenues in 2007-08 came from telecom and consultancy.

Key challenges
The biggest challenges facing PGCIL over the next few years are project management capability as the company seeks to double its network in just five years, manufacturing capacity constraints in India and availability of trained manpower. That said, company officials are confident of addressing each of these challenges.

PGCIL’s Transmission Network (ct. km)

Voltage level

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

765/800 kV

563

563

563

563

1,297

1,667

HVDC

4,368

4,368

4,368

4,368

4,368

4,448

400 kV

31,974

33,306

35,944

40,178

43,776

49,464

220 kV

7,255

7,357

7,710

7,734

7,743

8,124

132 kV

2,048

2,125

2,125

2,241

2,241

2,241

66 kV

37

37

37

37

37

37

Total

46,245

47,756

50,747

55,121

59,462

65,981

% Change

3.26

6.26

8.62

7.87

10.96

Transformation Capacity (MVA)

44,736

46,461

49,442

54,377

59,417

73,000

% Change

3.86

6.42

9.98

9.27

22.86

Source: PGCIL and Ministry of Power

PGCIL's Financials

 

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

Total revenue

25.33

28.06

28.31

35.54

40.82

50.82

Growth rate (%)

-

10.78

0.89

25.54

14.86

25.00

PAT 

6.43

7.48

7.85

10.09

12.29

14.48

Growth rate (%)

-

16.33

4.95

28.54

21.80

18.00

Source: PGCIL

Power Grid's Transmission Network - Planned and Under Construction

India's state-owned transmission utility, Power Grid Corporation of India Limited, is responsible for building and upgrading the country's national grid.
It is undertaking several projects to gear up the grid for future power demand across the
country.
The following are some of its major projects.

Transmission line project

Length (circuit km)

Estimated cost (INR million)

Expected completion date

INTERREGIONAL SYSTEMS

Kahalgaon Stage-II (Phase-II) Transmission System
(400 kV DC Ranchi-Sipat line)

816

5,498.2

Dez/ 08

Barh Thermal Project (3x660 MW) Transmission System (765 kV/400 kV DC lines)

2.447

37,794.6

Sep'09

North-West Transmission Corridor Strengthening Scheme (765 kV/400 kV DC lines)

600

4,831.0

Jan'09

East-West Transmission Corridor Strengthening Scheme (400 kV Ranchi-Rourkela-Raigarh-Raipur line)

1,230

8,037.0

Mar'10

NORTHERN REGION

System Strengthening Scheme in Uttarakhand (400 kV/220 kV lines)

50

764.2

Dec'09

RAPP 5 & 6 Transmission System (440 kV)

448

4,994.5

Dec'08

Koteswar Transmission System (400 kV)

36

2,603.4

Sep'09

Koldam HEP Transmission System (400 kV lines)

396

4,649.1

Sep'10

Parbati-II HEP 400 kV Transmission Lines (to be executed under JV)

129

3,585.0

Sep'10

System Strengthening Scheme in Roorkee
(Rishikesh-Muzaffarnagar 400 kV line at Roorkee)

3

1,099.5

May'09

Northern Region System Strengthening Scheme-V (400 kV lines)

1.222

7,212.5

Jun'09

Parbati-III HEP Transmission System (400 kV lines)

543

5,572.5

Jan'10

URI-II HEP Transmission System (400 kV)

114

2,382.5

May'11

System Strengthening in South-Western Part of Northern Grid (Part-A) Scheme (400 kV DC line)

510

3,812.8

Apr'09

System Strengthening in South-Western Part of Northern Grid (Part-B) Scheme (400 kV Kankroli-Jodhpur line)

187

1,502.6

Oct'09

Northern Region System Strengthening Scheme-VIII (400 kV DC Kankroli-Zerda line)

68

2,206.9

Dec'09

Northern Region System Strengthening Scheme-VI (400 kV Ballabgarh-Bhiwadi line at Gurgaon)

54

1,870.0

July'09

Northern Region System Strengthening Scheme-X (400 kV DC Gorakhpur-Lucknow line)

510

4,083.6

Dec'10

Northern Region System Strengthening Scheme-XI (400 kV DC Meerut-Kaithal line)

320

4,178.0

Dec'10

Northern Region System Strengthening Scheme-XII (400 kV DC Bahadurgarh-Sonepat line)

104

2,615.0

Nov'10

Northern Region System Strengthening Scheme-IX (400 kV DC Kanpur-Ballabgarh line)

788

5,250.0

July'11

WESTERN REGION

Sipat-II Supplementary Transmission System (765 kV/400 kV lines)

1.123

8,136.7

Dec'08

Western Region Strengthening Scheme-II (765 kV/400 kV lines in a JV)

7.075

52,212.3

July'10

Gandhar-II Gas-Fired Plant Transmission System (400 kV DC lines)

850

6,532.1

NA

Western Region Strengthening Scheme- V (400 kV/220 kV lines)

435

4,777.0

Sep'10

Western Region Strengthening Scheme-VI (400 kV DC Dehgam-Pirana line)

112

3,407.0

Nov'10

SOUTHERN REGION

Neyveli TS-II Transmission System (400 kV lines)

830

6,918.3

Mar'09

Kundankulam-APP Transmission System

1.844

17,792.9

Dec '08

System Strengthening-VII of SR

248

2,793.0

July'09

Chaennai NTPC-TNEB JV TPS Transmission System

56

902.6

July'10

EASTERN REGION

Eastern Region Strengthening Scheme-I (400 kV lines)

1.142

9,759.6

Oct'09

Eastern Region Strengthening Scheme-II (400 kV DC Durgapur-Maithon line)

146

2,275.2

Jun'10

DVC and Maithon Right Bank Thermal Project Transmission System (400 kV lines)

320

2,904.9

April'10

 

 


 


 


DC: Direct current
JV: Joint venture; HEP: Hydroelectric plant
TPS: Thermal power station
Source: Power Grid of India Limited



India's Power Sector: Demand and Generation Capacity Estimates and Projections

Capacity Addition Plan (2007-12)






Conventional sources MW  
Coal48,609   
Hydro15,507   
Gas/LNG7,293   
Nuclear3,380   
Lignite2,280   
Source: Central Electricity Authority and Ministry of New and Renewable Energy
Non-conventional sources MW  
Others2,800   
Wind10,500   
Biomass1,700   
Source: Central Electricity Authority and Ministry of New and Renewable Energy
Long Term Power Demand and Capacity Requirement  
    
YearEnergy Requirement (BU)Peak Demand (MW)Total installed capacity (MW)
March 2008 (actual)704108,866143,061
March 20121,097158,000229,648
March 20171,524226,200306,000
March 20222,118323,000425,000
March 20272,866437,000575,000
March 20323,880592,000778,000
Source: Central Electricity Authority   

 

 


11_400

22_400