The impact of electricity on development is deeply underrated. At one stroke, reliable electricity supply can lead to improved health, improved productivity and unlimited access to the world outside. The power transmission grid is a vital element of the electricity value chain that merits immediate attention in the context of India’s power sector vision.
I remember my early years in Patna without reliable electricity supply. India has come a long way since then. GoI’s Saubhagya scheme that envisions electrifying every house in India by December 2018 is to be lauded.
This effort will ensure that development with electrification is served with last-mile issues resolved. Combined with direct benefit transfer (DBT), this landmark reform can ensure that the burden of distribution companies comes down with an increase in consumer base.
An enabling policy environment has resulted in significant enhancement of power generation in the conventional and non-conventional generation space. Reduction in power prices has prepared the ground for realising the dream of 24×7 delivery of affordable energy. India’s renewable energy programme, among the largest in the world, is transforming generation at an unprecedented scale.
Prime Minister Narendra Modi’s vision of adding 175GW of renewable energy generation is commendable. It reflects India’s commitment to sustainability and climate change.
While both ends of the electricity spectrum are undergoing massive reforms, it is important to prepare the power transmission backbone for the future.
Infrastructure investments that are created ahead of demand play a vital role in spurring demand and leading to better economic growth. The ambitious Rs 5 lakh crore Bharatmala programme in the road sector is a good example of a programme not driven purely by demand, but by larger economic and social considerations.
A similar ambitious programme in the transmission sector is currently underway in Brazil. The transmission sector is being viewed as an engine for economic growth in that country, with planned investments of more than $30 billion in the next five years.
The impact of power generation on the transmission grid in India is expected to change significantly with a greater share of renewable energy generation. Upfront investment in creating a strong and reliable power transmission network will ensure that the grid is ready to take on the new generation paradigm. The grid failures in July 2012 affected nearly half of India’s population, making it one of the largest outages by the number of people affected. We can ill-afford a similar situation in digitally connected India.
So, it is important that investments are done not only for meeting or spurring demand but also to ensure better quality and higher reliability of power. In this context, planning for contingency lines along important corridors also become critical.
The mode of development of transmission projects is as important as planning for the expansion of the future grid. A recent Crisil report has rated the power transmission sector as the most attractive for infrastructure investment in India. The success of Inter-State Transmission System public-private partnership projects on the tariff-based competitive bidding model is testimony to the robustness of the PPP model of the sector.
In some cases, tariffs have reduced by 30% and project execution time by 40%. Additionally, the Revised Tariff Policy of 2016 has recommended the competitive bidding model for intra-state projects. A big measure of success for the transmission grid is the creation of intra-state networks that will bring electricity closer to the consumer.
It is time the states adopt a successful central model for building the network and reap the benefits of private participation. This will ensure that the states can focus their energies on distribution reform and last-mile connectivity, and at the same time, bring down the tariff for the end-consumer.
While we are reforming the demand and supply ends, let us prepare our grid for adequate capacity and reliability to ensure high quality of power transmission. It is the right time to take the electricity dream forward and translate the fruits for 30 crore Indians who are without electricity.
The writer is chairman, Vedanta Resources
DISCLAIMER : Views expressed above are the author’s own.