Power Grid Corporation of India (PGCIL) is placing a bet on turnaround of the distribution sector and prospective demand from states.
“In intra-state transmission, Rs 1.5 lakh crore worth of work is expected. The positive impact of UDAY (the scheme for the distribution sector) and the Centre’s various reform programmes in states would kick-start investment in sub-transmission and distribution,” the government-owned company said in a presentation to its investors after the March quarter results.
UDAY or Ujwal Discoms Assurance Yojana is a debt-restructuring programme for state government-owned power distribution companies (discoms) to turn around the financial and operational performance. Most states would have to improve their “last mile” transmission and distribution network to bring down technical and commercial losses. Grid expansion and strengthening are part of the reform.
PGCIL executives say the transmission sector would see Rs 2.6 lakh crore of investment by 2022, with close to 106,000 circuit km of transmission lines and 292,000 MVA of transformational capacity (of substations). If the envisaged Rs 2.6 lakh crore, Rs 1 lakh crore would be invested by PGCIL and the rest awarded to private entities through ‘tariff based competitive bidding (TBCB).
For the coming three years, PGCIL would cumulatively invest Rs 91,000 crore in several projects, said its executives. It has ongoing projects of Rs 1.05 lakh crore and Rs 25,000 crore in the pipeline. The projected investment includes the Green Corridors project, the ambitious alternate transmission network for renewable energy.
PGCIL currently operates close to 140,00 circuit km of transmission lines and 220 substations with transformation capacity of 292,000 MVA.
Apart from conventional power projects, the transmission major is expecting opportunities from new areas such as ultra mega solar parks, electric vehicle charging infrastructure, smart grids and battery storage for renewable energy.
“Among the major driving forces for growth of power transmission would be a continued thrust on seamless and flexible grid interconnection and renewables for energy security & climate change, coupled with improving financial health of discoms. Development of smart cities, growth of the railways network and dedicated freight corridors, coupled with Digital India initiatives, would push power demand,” the company said. Close to 24,000 circuit km of the Indian Railways network needs to be electrified by 2021.
The two other divisions of PGCIL, telecom infrastructure and consultancy, are also slated to see healthy growth. Company executives said they’d leverage the existing telecom infrastructure and run these on cleaner energy.
Net profit increased by 22.2 per cent to Rs 1,916 crore in the March quarter over the same period a year before. Total income grew 17.9 per cent in the period.