The Indian power transmission segment has grown significantly over the years, making the country’s electricity grid one of the largest synchronous grids in the world. Now, the segment is set for another phase of accelerated growth, driven primarily by the need to evacuate the large influx of renewables. However, the biggest challenges faced by the power transmission segment are right-of-way (RoW) issues, ageing assets, grid stability and security issues with the integration of renewables, and dependence on imported components. Industry experts comment on the sector’s progress, challenges and future outlook…
What is your assessment of the power sector’s progress during the past year?
During the past year, there was an unexpected hike in power demand and many problems relating to fuel shortage arose. However, the government took timely action by way of multiple initiatives. With renewable energy capacity increasing tremendously, the Ministry of Power (MoP) and the Central Electricity Regulatory Commission have introduced various market options for renewable energy trading, including a real-time market in order to mitigate the variability and intermittency of renewable power. Overall, the power sector made progress during the past year.
Hare Ram Panday
The power sector’s progress during the past one year has been tremendous. The sector has seen the introduction of the latest technology, intelligent electronic devices, artificial intelligence and the use of multifacial sources of energy including renewables, which has been increasing at a very fast pace.
High temperature low sag (HTLS) conductors, narrow base, monopoles, multi-circuit towers, long rod polymer insulators and optical ground wire (OPGW) cables have been introduced during the past years. The implementation of substation automation systems in grid substations (GSSs) have made it easy to access the system remotely. In our country, the issue is that most of the investment in the power sector is either through the state government or through the central government. While going for the latest technology such as GSS with unmanned operations, we have to utilise our existing infrastructure, which is massive in the state and central sectors. This needs to be modified and renovated. The central sector has grown at a faster pace than to the state sector, which is partially dependent on the finances of the central sector. In many cases, it appears that states are slower in terms of financial progression, which ultimately affects their infrastructure development.
There has been a paradigm shift in the policies and targets of the power sector in the recent past. The focus now is more on green energy. Conventional coal-based energy production is not being proactively promoted. World energy policies are now focused on achieving a zero-carbon footprint. This is in line with the decisions made at various conclaves, conferences and meetings of different countries. At the Glasgow meeting in 2021, the deadline for developed countries was set as 2030 and for developing countries as 2040 for complete removal of coal-based generating plants. It is important to note that approximately 37 per cent of the total energy requirement of the world comes from coal-based generating plants. In terms of targets set by the country for incorporation of solar and other forms of renewable energy, India is progressing well as per its targets prior to the deadline.
We can discuss this in the context of power utility projects, the performance of utilities, and the industry and technology fronts.
- Utility projects: The impact of the Covid-19 pandemic persisted for nearly six months, from September 2021 to February 2022. This being the most productive period in the year, almost all industries were badly affected, and so was the power sector. Projects were adversely affected and struggled to meet the targets set for financial year 2021-22. However, the next six months brought new hope. Industries started settling down under the new normal conditions and tried to cover their backlogs. For example, we at Gujarat Energy Transmission Corporation Limited (GETCO) are erecting 100 plus substations every year, but could complete only 70 during 2021-22. GETCO has also successfully commissioned the 220/33 kV Dholera and Raghanesda substations (under stopgap arrangements) along with their associated lines to evacuate solar power from the Dholera and Raghanesda solar parks, against all odds.
- Utility performance: It has been generally seen that despite the Covid-19 pandemic, power generation, transmission and distribution utilities maintained their performance. GETCO maintained high key performance indicators during the past year, with 99.91 per cent availability for substations and 99.67 per cent for lines, and losses being reduced to 3.6 per cent.
- Industry and technology fronts: Activities such as material procurement were also impacted. Many activities occurred virtually, such as meetings, discussions, and even material inspection and factory acceptance tests. This encouraged digitalisation and the elimination of paper use. From this, it can be concluded that the power sector displayed appreciable progress during the past year.
The Covid-19 pandemic has affected human life all over the world in the past two years. Responding to the prime minister’s declaration of a nationwide lockdown starting from March 23, 2020, all industrial and commercial establishments across the nation shut down their operations, causing a drastic reduction in electricity demand. Maintaining the availability and reliability of high/low tension power supply to consumers and the required extra high voltage (EHV) grid became a huge challenge, as the employees responsible for its operation and maintenance faced extreme difficulties during their daily commutes. However, even in such difficult conditions, power sector employees carried out their assigned tasks and remained resilient.
During the initial phase of the pandemic, the financial health of the discoms deteriorated largely due to very poor billing and collection efficiency. Subsequently, corrective measures were taken and now it is on par with pre-Covid levels.
The transmission sector witnessed huge challenges due to low loading on EHV transmission lines and substations. This resulted in some pockets encountering voltages over the prescribed limits, putting stress on insulation. Some EHV equipment/lines were kept out of service to address this issue. There were delays in project execution leading to time and cost overruns, as engineering, procurement and construction/turnkey contractors faced a dearth of manpower, especially labourers. This was due to the large-scale migration from the city centres to villages, with sustenance becoming difficult due to rising unemployment. The situation has now almost normalised, but the completion of pending projects remains a challenge.
The average annual increase in power demand of 3-4 per cent declined in financial year 2020-21 and the first two quarters of 2021-22. Since then, however, there has been a rapid increase in power demand due to the waning of the pandemic and the normalisation of industrial and commercial activities. As per the latest data, there has been an increase of 7-8 per cent in power demand, surpassing pre-Covid figures. Further, month-on-month goods and service tax collection has increased, indicating that industries are running full throttle.
It was expected that India would meet its renewable energy generation capacity target of 225 GW by 2022. However, the pandemic badly affected the execution of these projects. Against the targeted addition of 30 GW of solar photovoltaic (PV) capacity each year, we could add only about 10 GW of solar PV capacity last year. However, things are now back to normal, and it is expected that the fast pace of execution and the removal of other bottlenecks will ensure that we reach the capacity addition target by 2030.
What are the biggest issues and challenges facing the power transmission segment?
The power transmission segment faces various bottlenecks in the construction of new projects. The major challenge in the segment is obtaining RoW, with land availability for installing grid substations and laying transmission lines being a legacy issue. In addition to this, forest clearances and limited revenues for transcos for new projects are major challenges. Revenue for research and development (R&D) of new projects and new technologies is also scarce. Huge funds are required for R&D of new projects and upcoming technologies such as gas-insulated switchgear (GIS) substations, digital cities, digital switchyards, digital substations, substation automation, state-wide control centres for substation operation and state-wide optic fibre ground wiring. The current regulated tariff set by the state electricity regulatory commission hardly meets the operations and maintenance (O&M) requirements of the entire transmission company.
Hare Ram Panday
The biggest challenges faced by the power transmission segment are the growing power demand, demand for quality power and demand for 24×7 power.
Providing 24×7 power for all is very challenging for a country like India, which has a rural population of around 80 per cent. Also, 24×7 power calls for redundancy in the system and outages should be minimal. This, in turn, calls for heavy investment in infrastructure. Recently, there has been huge expenditure, funding and development in the distribution sector. So, when the distribution sector has developed to reach every household with its own redundancy system, the transmission system has to be there to supply power without any interruption. For this, proper planning and power management becomes very critical. Further, creation of the transmission system requires huge financial support. With the increasing installation of multiple renewable energy sources, the transmission system has to evolve to evacuate this power, which requires additional infrastructure. The country has to take a long-term vision and anticipate the demand over the next few decades and plan transmission infrastructure that can be built prior to the actual demand to avoid any interruption. Further, the planning by the central and state sectors has to be in sync as many states, including Bihar, depend on power sources from outside the state.
Another issue is that of volatility in renewable energy. If availability is not ensured and until an economical model of energy storage is not available, there is a need to critically think about development of power balancing. Requirement of transmission infrastructure for power balancing varies from state to state, depending on the availability of energy sources in the state. Additionally, a huge transmission network will be required for both the central and state sectors as redundancy in the transmission system will be required to absorb power shortage. For this, utilities will have to create high voltage lines, use high performance conductor and undertake capacity augmentation. Another big challenge is infrastructure creation as India is a densely populated country and the per capita land availability is less in a major part of the country. This gives rise to severe RoW issues in the creation of transmission infrastructure. For this, suitable land compensation is required for the people losing their land.
Various rules and regulations have been issued by regulatory commissions with regard to allowable power interruptions, system outages, quality of power supply, system availability, etc. These have gross impacts on the planning and development of new transmission infrastructure as well as augmentation of transmission capacities. This, again, is capital intensive and state utilities, having limited resources, are finding it difficult to match the financial requirement for new works. Other challenges include dependency on imported components, which often leads to delays in project execution, price variations on account of the Russia-Ukraine war, among others. There is a need to create an inventory of imported components at the national level to ensure their timely availability. In addition, there is a need to standardise the specifications and design for each voltage level to bring uniformity in technical equipment and spares. There is also a limitation of investments and optimisation of investments is required to reduce the impact over tariff.
The development of cost-effective transmission corridors is a big challenge considering increasing population densities, difficult terrain, etc. With the vastness of transmission infrastructure, cybersecurity has become a vital issue. Various guidelines have been issued and teams are working on it. However, this will require continuous efforts to keep the system working safely.
The biggest issues and challenges are…
- Limited RoW: In certain cases, substations could not be commercialised even after construction due to RoW issues pertaining to associated transmission line work, leading to increments in their capital work in progress accounts.
- Scarcity of land for substations in urban areas: Due to the exorbitant cost of private land and the scarcity of government land in urban areas, it is very challenging to construct substations to satisfy the steep load growth in these areas.
- Increasing short circuit levels of substations: The higher rates of demand load necessitate the development of generation sources as well as associated transmission networks to build a strong interconnected network for power transfer. An undesirable consequence of this is increase in power density at individual locations, and resultant increase in the fault levels at those substations. Therefore, to mitigate the higher short circuit levels, we require higher-rated equipment, resulting in higher costs.
- Aged assets: Aged assets with obsolete technology are very difficult to manage and maintain. Such equipment should be replaced in a phased manner to improve operational efficiency.
- Integration of renewable energy: Renewable energy is inherently intermittent. Using large amounts of intermittent power may require upgrades to, or even a redesign of, grid infrastructure. To mitigate this intermittent nature, we require various compensation devices. This leads to power quality issues. Sometimes we need dedicated evacuation lines and substations which cannot be utilised round the clock, particularly for solar parks. Integration of distributed renewable energy is also a major challenge for discoms.
- Grid stability and security: The increasing integration of renewable energy poses a threat to grid stability and security.
- Power sector monetisation and private sector participation.
Global rating agencies are very optimistic about India’s GDP numbers, and have predicted a growth of around 7 per cent for the current fiscal year. Domestic financial institutions including the Reserve Bank of India and the State Bank of India have also forecasted a GDP growth of around 8 per cent. The power sector will obviously play a major role in facilitating the growth in GDP. Maintaining the availability and reliability of power supply to domestic, commercial and industrial consumers, and catering to the rapid increase in demand are the tasks facing the power utilities. There are certain transmission constraints in some important pockets such as the Mumbai Metropolitan Region and the Pune Metropolitan Region, wherein some critical projects need to be put on the fast track.
The upcycle in commodity prices has led to a massive increase in equipment/material costs, which has affected electrical utilities. Cost overruns are affecting many projects due to higher input costs, which, as per vendors claims, are not being fully covered even after statutory price variations as per contractual terms and conditions. This is affecting the business environment.
The poor financial health of state-owned discoms is a chronic issue. The central and state governments have come up with several schemes, infusing thousands of millions of rupees to improve the situation. However, significant improvement is yet to be seen.
At COP26, held at Glasgow in November 2021, India’s prime minister committed to net zero carbon emissions by 2070 and setting up of 500 GW of renewable energy capacity by 2030. This will be a tall order, as several different technicalities, such as integration of renewable energy into the transmission grid, reducing constraints/bottlenecks to facilitate power evacuation, and reactive power management need to be addressed within the time limit.
What is your outlook for the segment in near to medium term?
Load demand growth is high across the states in terms of capacity and energy requirement. With increasing renewable energy penetration throughout the country, load balancing needs to be achieved in a way that regional congestion is avoided and grid stability is secured.
In the evening hours, around 6 p.m., the load requirement peaks. At this time, solar energy is not available. Therefore, demand-side management and load shifting need to be in place to promote renewable sources of energy. In addition to this, there is a need to identify balancing resources. A small battery set might not help to balance these resources; therefore, new assets such as batteries and pumped storage will help provide grid services and transition power in a market-based scenario. Overall, in order to meet the rising energy and peak demand, resource availability, load balancing and energy storage need to be ensured so that energy security is maintained.
Hare Ram Panday
This is an era of transition and accordingly the power sector is also evolving. The power sector has to change as per the evolution of society, at least at the same or at a faster pace. The creation of green transmission corridors with zero/minimal carbon footprint is a big target. The power system has to be robust, intelligent and strong, and have redundancy in the system so that it can absorb any type of shock. The country today is not ready to absorb any type of blackouts. So, the integrated one-grid one-nation system, which we have already implemented, has to be robust and very strong to absorb power outages/imbalances, etc. The transmission segment should look forward for strengthening the state sector. In the state sector, due to prevailing problems of their own, many times they cannot visualise the timely development of infrastructure. So there has to be an integrated approach to take up state development, in line with the national target of development. As per the survey held in 2020, India’s per capita power consumption was 6,438 kWh. However, the world’s average per capita consumption was 25,719 kWh and we have to work very hard to improve.
Going forward, a lot of planning is required as power sector development accounts for the overall development of the country. As per research, power demand in the country is expected to grow at an annual rate of 6.5 per cent between 2022 and 2024.
In India, we are already working on proper planning for evolving the transmission system for target years 2027, 2030 and 2047, which is a very good initiative for formulating a proper road map for the next 25 years.
- Capacity building and development of skilled manpower suitable for O&M of the transmission sector.
- Commercial utilisation of the transmission infrastructure for purposes other than transmission of power, that is, communication through OPGW networks, etc.
- Use of the latest technology/intelligent electronic devices/automation/ global positioning systems/drone applications, etc. for new infrastructure as well as O&M works.
- Minimise transmission losses.
- Develop the system with the help of preventive/predictive/proactive maintenance systems for reduced outages.
- Optimum/Maximum utilisation of the available transmission infrastructure to reduce tariffs.
There is a need to move to automation, monitoring and proactive management systems and, at the same time, identify technologies for economical implementation. In addition, there is a need to create critical teams either at the state sector or the central sector or integrated, so that everything is taken care of right from conception and planning to construction, operations, management, development, and research and development.
In the near future, many developments are likely to take place, which may include:
- Dry air, etc. as a substitute for SF-6.
- Economical model of energy storage systems.
- Insulated crossarms that would reduce the corridor requirement of transmission.
- Bio-degradable substitutes for cross-linked polyethelene compound, which will reduce the cost and weight of EHV cables.
- Use of fibre-reinforced plastics in transmission tower design.
- Manufacture of EHV transformers with vacuum pressure impregnated winding to avoid the influence of moisture.
- Upgradation of protective relays, especially suitable for long transmission lines, subjected to heavy injection of converter-fed power sources.
- Development of energy conservation and efficient equipment.
- Development of power generation from hydrogen.
Moreover, there is huge potential in the transmission segment that is yet to be developed. Cables and use of HTLS conductors have vast potential. It will be difficult to take power from overhead lines in and around cities because of RoW issues. The use of narrow-base towers, monopoles and insulated crossarms will increase to minimise RoW. Further, automation and man-less operations will see greater uptake. Overall, the future is bright for the transmission segment.
The following need to be implemented:
- Uprating/Upgrading of existing transmission lines to transfer more power using the same corridor/right-of-use permissions, reducing carbon footprint.
- Digitalisation for improved decision making, management of aged and critical infrastructure/assets, and enabling automation and in turn enhancing operational efficiency.
- Extensive use of information and communication technology, artificial intelligence, machine learning, etc., to reduce O&M costs.
- Asset management to ensure higher availability and propel reliability indices to the next level.
- Capacity building.
- Safety measures.
- Environment-friendly technologies.
- Real-time grid monitoring, installation of demand management systems and analytics, to capture grid data in real time and analyse it in order to improve reliability.
- Fast-tracking of renewable energy integration projects.
At GETCO our focus is on carrying out prestigious projects of national importance such as the Special Investment Region, the Delhi Mumbai Industrial Corridor, the Railway Container Project, automobile hubs, solar parks, bullet trains, metro projects, ports, as well as other initiatives such as Kisan Suryodaya Yojana, Tribal Area Sub Plan, Sagarkhedu Sarvangi Vikas Yojana, green energy corridors, and battery energy storage systems, for the betterment of the state of Gujarat as well as the country.
With the positive outlook of global rating agencies as well as the central banks, India is set for moderate to robust growth compared to other emerging market economies, in the near to medium term. However, a few intermittent hiccups due to slowdown in the global economy and inflationary pressures cannot be ruled out.
To meet the increasing load demand, the power generation, transmission and distribution segments need to gear up, considering that the last two years did not witness the anticipated load growth due to the pandemic.
Many thermal power generators were affected by coal shortage last year. Generating companies need to proactively look into this issue and take mitigating measures. The establishment of EHV transmission infrastructure by transmission utilities to cater to the evacuation requirements of the 500 GW of renewable energy power anticipated to be installed by 2030 should be planned in accordance with the timelines of renewable energy developers, and executed accordingly. With renewable energy projects receiving “must run” status, project execution timelines need to be perfectly adhered to and delays cannot be tolerated.
With the rapid increase in renewable energy capacity and its integration in the EHV grid, reactive power management problems have also cropped up. To mitigate these, transmission utilities need to adopt flexible alternating current transmission System devices after carrying out detailed system studies.
Overall, the growth outlook for the power sector is quite optimistic, but utilities in all the three segments – generation, transmission and distribution – need to ensure that the expected benchmarks are met.