In the first week of August, Power Grid Corporation of India Ltd (PGCIL) announced that it commissioned its first-ever intrastate project in the TBCB (tariff-based competitive bidding) route. The project in question was the Jawaharpur-Firozabad transmission schemes in Uttar Pradesh.
There has been welcome news on the high-voltage direct current (HVDC) power transmission front in the past few months. Very recently, the Pugalur-Trichur HVDC line was made fully operational, enabling 2,000 mw of power transfer.
Over the past few weeks, some developments towards making the electrical equipment industry “greener” came to light. Despite the fact that India is augmenting its power T&D infrastructure capacity to meet the growing electricity demand, it needs to be continually conscious of the ecological implications.
Just last week, the government announced that the newly-formed Central Transmission Utility of India Ltd (CTUIL) will start operations from April 1, 2021.
Very recently, Power Grid Corporation of India Ltd (PGCIL) won three transmission projects under the tariff-based competitive bidding (TBCB) mechanism.
In a significant development, Securities & Exchanges Board of India (SEBI) very recently granted the certificate of registration to “Powergrid Infrastructure Investment Trust”, an infrastructure investment trust (InvIT) sponsored by Power Grid Corporation of India Ltd. (PGCIL)
Earlier this month, Power Grid Corporation of India (PGCIL) debuted in the intrastate power transmission space by winning a concession in Uttar Pradesh, under the tariff-based competitive bidding route. The Central utility clinched the transmission scheme associated with the upcoming 2×660-mw Jawaharpur power generation project in Uttar Pradesh.
For PGCIL, which specializes in interregional and even cross-border transmission lines, winning an intrastate project assumes significance. When the TBCB mechanism was launched in January 2011, the initial projects were all of interregional lines—crucial components of the National Grid. It is only in recent years that state governments started using the TBCB mechanism for intrastate lines. However, this culture did not spread widely with only few states like Uttar Pradesh, Haryana, Rajasthan and a few others, deciding to adopt this modality.
Coming back to the concession won by PGCIL, the project special purpose vehicle is “Jawaharpur Firozabad Transmission Ltd,” which was incorporated on August 20, 2018, as a wholly-owned subsidiary of REC Transmission Projects Company Ltd. This SPV has now been transferred to PGCILwho will develop the project on build, own, operate, maintain (BOOM) basis under a 35-year concession period.
The transmission scheme comprises of three broad elements:
The project will also include some more LILOs and a 132kV double-circuit line connecting the upcoming Firozabad substation to Narkhi.
UP takes the lead: It is worth observing that Uttar Pradesh has formalized three intrastate power transmission projects this year. This is a very commendable achievement considering that there was hardly any movement in other states in the intrastate TBCB power transmission space.
Of the three projects that UP formalized this year, one project (the Jawaharpur scheme discussed above) has gone to PGCIL and two have been bagged by Adani Power. In June this year, Adani Transmission Ltd (ATL) clinched the Ghatampur power transmission project under the tariff-based competitive bidding route, marking its first presence in Uttar Pradesh.
The transmission project involves around 900 ckm of transmission lines at 765kV and 400kV levels. Some major 765kV lines include Ghatampur-Agra, Agra-Greater Noida and Ghatampur-Hapur.
Incidentally, the Ghatampur project saw very aggressive bidding at the RfP stage with PGCIL being the only other contender in the race when the project ultimately went to Adani Group.
Very recently, Adani won the transmission scheme involving evacuation infrastructure for the upcoming 2×660-mw Obra-C thermal power project of state government utility Uttar Pradesh Vidyut Utpadan Nigam Ltd (UPVUNL).
Uttar Pradesh is seen to be very aggressive in recent years, in all aspects of the power value chain—generation, transmission and distribution. The northern state is gearing up to meet growing demand from both the industrial and household sector. Under the nationwide household electrification scheme “Saubhagya”, over 68 lakh households have been electrified since October 2017. This represents nearly 30 per cent of the 231 lakh households that have been electrified since the launch of Saubhagya.
UP is doing well to expedite its power generation projects and also step up household electrification. Its effort in accelerating the creating of power transmission infrastructure is a step in the right direction.
The author of this article, Venugopal Pillai, is Editor, T&D India, may be reached on venugopal.pillai@tndindia.com. The views expressed here are personal.
The recently concluded Hanover Messe 2018 had on display a generous array of innovations in the electrical equipment space. It is widely discussed that the ubiquitous transformer hasn’t seen much of a radical change in its design for long years on end. One industry expert remarked that transformers are built in quite the same way as they were during the days of Faraday.
One option by which PGCIL could meaningfully engage in intrastate projects is through joint ventures with state power utilities, at least for specific projects.
Very recenty, there was a news report that Kerala State Electricity Board was seeking the involvement of Power Grid Corporation of India (PGCIL) in the southern state’s ambitious “Transgrid-2.0” project. The Rs.10,000-crore project envisages substantial upgrade to its power transmission network, and that too, with a conscious adoption of modern technology.
It is well known that even if almost all the erstwhile state electricity boards have been split into separate entities for generation, transmission and distribution, most of them still lack the technical expertise or the financial prowess to deal with complexities in their intrastate transmission networks. This is exactly why drawing upon PGCIL’s competency could be harnessed advantageously.
Special Cases
In some deserving cases, PGCIL is carrying out intrastate power transmission upgrade, thanks to extreme conditions that the state government-utilities would find difficult to contend with. For instance, PGCIL is implementing a project worth over Rs.5,000 crore to improve transmission network in topographically-challenging northeastern India, touching all northeastern states except Arunachal Pradesh. However, in Arunachal Pradesh and Sikkim alone, PGCIL has been entrusted with a Rs.4,700-crore project to improve transmission and distribution infrastructure. In Jammu & Kashmir also, PGCIL is involved in a Rs.1,800-project to connect the isolated Leh-Kargil area to the northern grid with a 220kV line. In these cases, PGCIL is playing the role of a “consultant” and has received the mandate from the Central government.
The real problem lies with states that are not “special” like the northeastern ones or Jammu & Kashmir, nor at the other extreme, are fully equipped to deal with their power transmission network.
TBCB might not work
State power utilities of course have the option of using the tariff-based competitive bidding mechanism that can bring in enterprise and investment, in a competitive environment. However, not many states of them have pursued this option aggressively although there are honourable exceptions like Haryana, Uttar Pradesh, Rajasthan, Haryana, etc. All said, the extent to which TBCB has percolated into intrastate projects, at the national level, is still shallow. Even if states float projects on the TBCB mechanism, PGCIL is free to bid just as it has successfully done in interregional lines. In such a case, states stand a potential chance to get PGCIL’s involvement. But the point is: Would PGCIL be excited enough to proactively participate in micro-level intrastate projects?
The JV option
One option by which PGCIL could meaningful engage in intrastate projects is through joint ventures with state power utilities, at least for specific projects. It has done so with Bihar, resulting in the formation of Bihar Grid Company Ltd, a 50:50 joint venture. PGCIL was engaged in similar talks with Odisha but the proposal did not take shape, ostensibly due to insufficient propulsion by the state government.
State governments must draw upon the rich technical and managerial experience of PGCIL and actively consider the joint venture route. To start with, JVs could be formed for specific but complex projects. Quite admittedly, formation of joint ventures would involve extended discussions and procedural formalities. The JV with Bihar, for instance, was formed in 2013 and has had its share of teething troubles. But once again, state governments would do well to realize that roping PGCIL has a JV partner is well worth the effort. For PGCIL too, an equity stake would mean closer bonding with the project, perhaps much more than it would in the capacity of a consultant.
(Photo: RTS Power Corporation)
(This article’s author, Venugopal Pillai, is Editor, T&D India. Views expressed here are personal. The author may be contacted on venugopal.pillai@tndindia.com)
The recent report of the Comptroller and Auditor General (CAG) titled “Competitiveness of BHEL in Emerging Markets” was presented in Parliament on August 8, 2017. The report provides insights on the debacle of BHEL. From FY13 onwards, BHEL’s sales turnover has been on a decline and in FY16, the PSU engineering firm posted its first-ever loss since inception.
A key insight derived from the CAG report is the inability to diversify from the power sector. During the period FY13 to FY16, power sector accounted for nearly 80 per cent of the order inflow of BHEL.
Even within the power sector, the focus has been on the generation side, and this is primarily responsible for BHEL’s steady southward journey. Supercritical power equipment has spelt trouble for BHEL from the onset. It could not get technology partners on time and it took years to BHEL to acquire competence in the field. By then, the Chinese had also made significant inroads and even foreign suppliers were busy with orders. BHEL even tried turn itself into a developer by forging joint venture with state power generation utilities of Tamil Nadu, Karnataka and Maharashtra. While BHEL was to hold minority stake in the joint ventures with an understanding that it would get the mandate to supply main plant equipment. Even this approach was largely unsuccessful.
Related story: BHEL gets “developer” tag
BHEL should have laid focus on the power transmission side given that the investments in the country’s power sector were gradually shifting from generation to T&D.
Take the case of modern T&D equipment like dry transformers, which are critical in power distribution infrastructure in urban areas. It is reliably learnt that BHEL still has not developed expertise in dry transformers. Even take the case of extra high voltage (765kV) gas-insulated switchgear. Suppliers like Areva T&D (later Alstom T&D and now GE T&D) have been cornering big market share in the 756kV power transmission equipment space. Even certain categories like 500 MVA interconnecting transformers was an area that BHEL missed out on.
By and large, BHEL has moved very slowly when it comes to innovative equipment in the power transmission space, especially the 765kV equipment space that is rapidly picking up. What happened in the power generation space to BHEL threatens to repeat itself in the 765kV power transmission space as well.
China was a competition to BHEL in the power generation equipment space, and is also providing to be a strong competitor in the 765kV power transmission equipment space. Let us remind ourselves that Chinese major like TBEA and BTW have already set up shop in India, and have been receiving from utilities like Power Grid Corporation of India. Also, traditional European suppliers like Siemens, ABB and GE (erstwhile Alstom), and big Japanese names like Toshiba are also in the fray. EHV power transmission equipment, especially 765kV GIS, should be a key area for BHEL.
In FY18 so far, BHEL has not reported any significant order in the power transmission space except for a very recent export order for transformer bushings placed by customers in Chile and Estonia. In FY17, the situation was similar with the exception of a 765kV air insulated substation mandate placed by the Tamil Nadu state power transmission utility.
BHEL has been reporting diversification in its order inflows covering areas like solar power, metro coaches, defence, aerospace and even water treatment, but 765kV GIS is an area that BHEL needs to make serious inroads into.
(Photograph showing GIS substation of ABB is for representational purpose only. Photo Courtesy: ABB)
(This article’s author, Venugopal Pillai, is Editor, T&D India. Views expressed here are personal. The author may be contacted on venugopal.pillai@tndindia.com)
