Building a robust intra-state transmission sector to achieve India's renewable energy goals

The increase in Indian electricity demand and corresponding generation capacity addition has driven transmission network expansion at a fast pace in the last few years. For reliable delivery of power, it is critical that transmission infrastructure is developed in a coordinated fashion to match growth in demand and generation. But as a social good, grid expansion must also be delivered in a cost-competitive way.

Over the years, the government has initiated various programs, such as Integrated Power Development Scheme (IPDS) and Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), to build and strengthen the distribution and sub-transmission network in India. A key strength is that India now has a single national synchronous grid with limited inter-regional congestion, and with scope for expanded international connectivity as well. However, important state transmission lines across India remain congested and constrained.

In July 2012 half of India’s population experienced grid failure. In October 2020, Mumbai was left in the dark after grid failure resulted in massive power outages, affecting homes and businesses across the financial capital. To ensure better quality and higher reliability of power into the future, transmission investment is needed to augment and strengthen the system.

With the rising share of renewable energy (RE), transmission infrastructure development will be critical to optimally balance ever-higher levels of increasingly low cost but variable RE. Most of the RE generation capacity is connected to state transmission utilities (STUs) so the efficiency and reliability of intra-state transmission networks will be key for evacuation of power.

Despite tremendous growth, the state-level transmission sector continues to be plagued by issues such as right of way, inadequate investment, lack of financing access for state discoms and lack of competition in intra-state transmission development. The intra-state network development is lagging as development is based on a cost-plus regime due to various factors. It is necessary to augment and improve reliability at the state grid level. Unless the weakest link of state-level transmission grid is addressed, there is no point solely investing upstream as the network infrastructure will remain under-utilised.