Amid plans to ramp up target from 175 GW to 227 GW: Transmission wrangles threaten to hold up green energy push
Work on transmission corridors has not taken off; could force agencies to slow down future bids
The country’s flagship renewable energy programme is headed for rough weather on account of procedural wrangles among government agencies, including transmission utility Power Grid Corporation of India Ltd (PGCIL) and planning body Central Electricity Authority (CEA). Work on transmission corridors for future green energy has not taken off and it could force agencies such as the Solar Energy Corporation of India (SECI) — the nodal agency for conducting green project bids — to potentially slow down future bidding process for the wind and solar projects. This is even as the government intends to ramp up the target from 175 GW to 227 GW (one GW or giga watt equal 1000 mega watt or MW).
If SECI goes ahead with fresh renewable energy bidding and awards new projects as per the revised capacity addition plan, the developers apprehend that any delays to the associated interstate transmission capacity could mean bottling up of electricity to be generated by these plants post commissioning, which could hit the developers’ ability to service loans and may create a fresh wave of NPAs in an already embattled sector.
The timeline for project winners under the auctions is just 18 months. The new transmission system and RE pooling stations aggregating to 18,500 MW for evacuating electricity required by the Ministry of New and Renewable Energy (MNRE) in states such as Tamil Nadu, Andhra, Karnataka, Maharashtra Gujarat, Rajasthan should be ready by then. The problem, though, is that developing the associated transmission system from scratch has a longer gestation project, requiring 3-4 years. So, ideally, the transmission systems should run ahead of the schedule of the projects in order for it to come up in time for the commissioning of the project.
Cumulatively, these transmission projects total to 18,500 MW and entail an estimated cost of Rs 25,000 crore. Since contractually the onus is on the project developers to obtain transmission access, there is a brewing concern among renewable project developers that they could end up being penalised if the associated transmission systems are not in place, even though it’s government agencies such as the CEA and the central transmission utility are dragging their feet on the issue.
These concerns have been conveyed to the Secretary, MNRE. It is learnt that PGCIL had a meeting with bid winners, including one earlier this week. PGCIL has asked the MNRE to give them grant which, in effect, could pave the way for avoiding tariff based competitive bidding for transmission system and enable the transmission major to get projects on nomination basis.
The problem is compounded by the fact that RE-rich states such as Gujarat and TN claim they are not interest in developing transmission systems because they have already more than required RE capacity in their portfolio. The opposition by the states on account of increasing transmission tariff and delaying tactics by implementing agencies such as PGCIL in order to circumvent competition from private transmission companies is slowly leading to a situation where the flagship program of the RE development may be in jeopardy.
With new pooling stations getting delayed, there is the possibility that instead of the competitive bidding route in transmissions development, PGCIL could be handed out these projects on a nomination basis, officials involved in the exercise said. The bid winners are facing a double whammy. On the one hand they may be slapped with penalty for non-delivery if powered in time, and on the other hand their IDC (interest during construction) would start piling up due to any delay in commissioning on account of transmission bottleneck.
Of the Centre’s original target for 175GW renewable capacity by 2022 (which has now been ramped up to 227 GW), 60 GW is envisaged to be set up through wind power projects. As part of targeted wind capacity of 60GW by 2022, wind capacity of about 34GW is already achieved in March 2018.
As on date, SECI has conducted bidding for about 6050 MW of wind power projects across India and out of this 4050 MW (Tranche 1, 2 & 3) has already been awarded and remaining 2,000 MW (Tranche 4) has been bid out. Though the bidding was carried out pan India, the bidders have opted to establish 4500 MW (3900 MW at Bhuj PS & 600 MW at Bhachau S/s) of wind power in Gujarat and 1550 MW (950 MW at Tirunelveli; 300 MW at Pugalur; 300 MW at Palakkad) in Tamil Nadu. Further capacities (wind and solar) are being tendered both by SECI as well as thermal utility NTPC Ltd under Interstate schemes. SECI is also targeting 10 GW scheme for ISTS (inter state transmission system) connected wind power projects in current financial year.
In view of the wind capacity expansion plan as well as connectivity applications received in ISTS for wind capacity, it is expected that wind capacity may cross the milestone of 60 GW in next 3-4 years. In the meeting held with the developers it emerged that in general, the developers are interested to get connectivity at 220 kV level of the ISTS pooling station. The transformation capacity at Bhuj pool is not sufficient for accommodating the wind power developers of SECI -3 and 4.
Already, a large number of thermal plants are sick due to issues like lack of coal linkage and lack of demand.