India Contemplating Separate Transmission Entity

Proposed Indian Central Transmission Utility Stated To Be Helpful In Expanding Renewable Power
06:16 AM (Beijing Time) - 24. November 2016

Key Takeaways

  • The Government of India is planning to set up a central transmission utility (CTU), which will plan inter-state electricity transmission network and have operational and financial autonomy
  • Renewable energy sector in the country to benefit as the administration believes it would address the issue of transmission being faced by project developers
  • So far, the Power Grid Corporation of India Limited has been essaying the role of a central transmission utility in the country

The Indian Minister heading the Ministry of New and Renewable Energy (MNRE), Piyush Goyal has stated that his government is planning to create a separate Central Transmission Utility (CTU). If created, it will have the task of planning the inter-state electricity transmission network.

Goyal informed the upper house of the Indian Parliament, the Rajya Sabha, that this entity is envisaged to have “operational and financial autonomy which will discharge the statutory functions of the CTU along with other functions which among other things includes Power System Planning.” It is still not a final plan as the proposal is said to be at a preliminary stage.

The functions, as defined for this new proposed entity, are currently executed by Power System Operation Corp, part of the Power Grid Corporation of India Limited (PGICL), which manages the electricity grid in the country, facilitating transfer of electricity within and across regions and trans-national exchange of power, according to an agency report from the Press Trust of India (PTI).

Power transportation and transmission issues in India are creating problems for solar power as well. Solar power project developers have complained of solar power generation being curtailed by utilities as they would give preference to conventional sources of electricity over renewables. The MNRE has issued orders to the Central Electricity Regulatory Commission (CERC) to focus on renewables first, but the problems have persisted (see MNRE Backing Solar). In the current fiscal year, India is expecting to commission 11,068 MW solar power capacity (see India Adds Nearly 2 GW PV Since April). With more solar power along with other renewables set to come online rapidly, the government is looking at managing this power efficiently.

In October 2016, the government also revised its National Tariff Policy and waived the inter-state transmission charges for solar and wind power projects commissioned by a certain date (see Transmission Charges Waived In India).

Clean energy research and consultancy firm Mercom Capital Group said that with the setting up of a CTU, the government will be able to easily monitor and regulate the power sector in the country. Quoting an unnamed official from the Ministry of Power, it said, “transmission is one of the factors due to which renewable energy sector and the power sector as a whole is suffering, it is also one of the main reasons why developers and projects are facing losses; the government has been trying to bring about reform, to achieve this a new and transparent entity is required.”

Speaking to Indian business daily Business Standard, Goyal said, “We have already decided to do that (separate CTU from PGCIL). All the study and paperwork is going on. I agree that CTU should be a separate entity. PowerGrid acted like a support to these institutions till they become strong and centralised.”

Goyal had previously said that PGCIL is seeking a $1 billion loan from the Asian Development Bank (ADB) for a green energy transmission corridor.

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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Anu Bhambhani