In a recent interview with Power Line, Pratik Agarwal, Managing Director and Chairman, Sterlite Power Limited and Serentica Renewables, discussed the current state of the power sector, transmission challenges and future trends. He also shared insights into Sterlite Power’s strategies and priorities moving forward. Excerpts…
What is your assessment of the current state of the power sector? How has the sector performed in the past one year or so?
The power sector in 2024 has shown significant progress, reflecting both achievements and ongoing challenges. Over the past year, the government has taken significant steps to facilitate this growth, including policy reforms, improvements in the ease of doing business and the implementation of renewable purchase obligations. However, the sector has been facing challenges owing to global supply chain disruptions, fluctuating coal prices and the rising demand for power as industries and households recover post-pandemic.
While thermal is expected to remain the mainstay for some time, its share is gradually declining. As of August 31, 2024, India’s installed capacity is 450 GW, with 153 GW coming from renewable energy sources alone. This clearly demonstrates that the country is backing its vision with a strong on-ground performance as it marches towards its ambitious 500 GW renewable energy target.
No system is complete without a robust transmission network. However, India’s transmission infrastructure continues to lag behind, posing a significant challenge in power evacuation from renewable projects. While, the sector has seen improvements in grid modernisation efforts, with a focus on smart grids and digital technologies, the intermittency of renewable energy sources has underscored the need for advanced energy storage systems to ensure grid stability. Overall, while the sector has made significant strides in renewable energy integration, sustaining this momentum will require substantial investments in infrastructure, grid resilience and policy certainty.
What are the unresolved challenges in the transmission segment?
The transmission segment is witnessing rapid growth in terms of installed capacity, with significant expansions expected in the future. While the tariff based competitive bidding process has matured over the years to become the mainstay development model, a few challenges remain as given below.
Requirement to increase private sector investments: In several renewable-rich states, delays in grid connectivity pose significant risks, particularly in areas where high voltage direct current (HVDC) systems are not expected to be operational until 2028. These delays threaten the timely commissioning of solar projects, making large-scale investments in transmission infrastructure essential to prevent disruptions. As per the minutes of the 23rd meeting of the National Committee on Transmission, projects worth more than Rs 870 billion are in the pipeline. It is the need of the hour to ensure adequate participation from the private sector for a holistic growth.
Interconnection issues: At present, the upcoming renewable energy projects are dependent on the timely completion of transmission projects for the evacuation of power. However, as per the existing mechanisms, if a developer achieves the deemed commercial operation date, that is, completes the project before the downstream network is ready, it receives 50 per cent of the tariff for the first six months. This aspect makes the project loss-making in the first six months, and disincentivises developers to adopt any technological advancements for faster execution.
Supply chain constraints: With the introduction of renewable energy, the country now requires advanced technologies such as HVDC and STATCOM. Clarity in policy, especially concerning domestic manufacturing requirements, will be vital for driving growth in the industry and ensuring long-term stability in the transmission sector.
Risk mitigation mechanism: A linear project such as transmission is fraught with risks. This project must pass through several districts, land ownerships and terrain types. Further, disruption in any one section can disrupt the entire transmission line. Therefore, it is essential that such projects of national importance are de-risked as much as possible. One such risk is “change in law”, which arises from changes in central or state regulations. Therefore, it is crucial to develop a mechanism to provide timely relief to the developers.
Enhancing grid resilience: With the country targeting the addition of 50 GW of renewable capacity each year, the existing growth in transmission systems is insufficient to facilitate timely power evacuation, leading to potential bottlenecks. While battery storage is currently the primary solution, there is a critical need to explore alternative technologies to enhance resilience and reduce costs.
What opportunities do you see for private developers in the transmission sector over the next one to two years?
There is a substantial gap in transmission infrastructure, particularly in renewable-rich states. Private developers can play a crucial role in bridging this gap by investing in and developing new transmission lines, especially in regions facing grid connectivity delays. The government’s focus on privatisation and reforms, such as the push for competitive bidding in transmission projects, create further opportunities for private participation. Additionally, the rise of green energy corridors and HVDC systems presents avenues for private developers to invest in advanced transmission technologies that ensure efficient power evacuation from renewable sources. Private sector involvement in grid modernisation initiatives, including smart grids and digital technologies, will also be crucial for enhancing grid resilience and stability as renewable energy integration intensifies.
In the short term, the emphasis on energy storage solutions, driven by the intermittency of renewable energy, opens up prospects for developers to integrate storage with transmission projects, thereby creating more resilient and flexible grid systems. With supportive regulatory frameworks, growing demand and a clear focus on renewable energy, private developers have a unique opportunity to make significant contributions to India’s evolving transmission segment.
What are the new and emerging requirements of the transmission grid?
One of the key requirements of the transmission grid is the expansion and modernisation of infrastructure to help achieve India’s target of 500 GW of renewable energy by 2030. As more wind and solar projects come online, the grid must evolve to handle increased electricity volumes and ensure efficient power evacuation, especially in renewable-rich states.Transporting power over long distances through HVDC will be a game changer. However, it should be technologically agnostic so that developers are incentivised to build capacities efficiently.
The establishment of submarine cable systems will be another requirement. With the government planning to auction 37 GW of wind capacity, India will need to develop the necessary supply chains to support this.
As land becomes a scarce resource and right-of-way (RoW) issues become more profound, upgrading existing corridors will also be necessary. In this regard, planners should consider RoW width reduction technologies such as HTLS and monopoles.
Grid flexibility and resilience are also critical, requiring advanced energy storage solutions, FACT devices and smart grids to manage the intermittency of renewables and enhance stability. Decentralisation and digitalisation are emerging trends, as smaller-scale renewables and rooftop solar demand a more intelligent grid capable of real-time monitoring and automation to optimise performance and prevent disruptions.
Cross-border connectivity is gaining importance as India aims to share and balance power regionally, necessitating infrastructure upgrades and
regulatory alignment.
What are some of the latest technologies being deployed by Sterlite Power?
Our latest advancements include the deployment of high-performance conductors, such as aluminium conductor steel supported and aluminium conductor composite reinforced. These conductors are designed to enhance thermal and electrical performance, enabling higher transmission capacities and reduced line losses. In urban and challenging terrains, where traditional solutions may not suffice, we are increasingly utilising medium voltage covered conductors. These conductors require less clearance than conventional overhead lines, making them ideal for densely populated areas and difficult terrain.
Meanwhile, our projects are incorporating HVDC technology, which is crucial for efficient long-distance and offshore power transmission. HVDC technology enables us to transfer power over extensive distances with minimal losses, facilitating the integration of remote renewable energy sources into the grid.
To support the rise of digital infrastructure, we are expanding our optical ground wire solutions, including options with 96 and 144 fibres. These solutions provide robust communication capabilities essential for modern grid management and the adoption of advanced digital technologies.
Our commitment to sustainability is also reflected in our manufacturing practices. We have implemented zero waste-to-landfill initiatives, reduced greenhouse gas emissions and integrated rooftop solar systems and water harvesting technologies at our facilities. These efforts not only enhance the efficiency and reliability of our projects but also contribute to our broader goals of environmental responsibility and innovation. Through these technological advancements, Sterlite Power continues to lead the industry in delivering cutting-edge solutions that address the evolving needs of the power transmission sector while promoting a sustainable future.
What have been the key business highlights for Sterlite Power in the past year?
We manage a diverse portfolio of 33 transmission projects across India and Brazil, spanning 16,529 ckt km, with a total capex of approximately Rs 450 billion. In 2023, we achieved a significant milestone by completing the Lakadia-Vadodara Transmission Project in Gujarat, India’s largest green energy corridor. This investment of Rs 20.24 billion is capable of evacuating up to 5,000 MW of power, making it a crucial component of the 30,000 MW hybrid renewable energy park in Kutch, which is set to become the world’s largest.
This year, we also secured major green energy transmission projects in Rajasthan, including Parts G and F. These projects involve a 700 km transmission line designed to evacuate over 20 GW of renewable energy from the state’s renewable energy zones (REZs). Additionally, we have just commissioned our flagship Mumbai Urja Marg project, which is another critical ISTS project with the potential to deliver 4,000 MW of green power to Mumbai, facilitating the city’s transition from thermal power plants.
One of our major developments in financial year 2024 was securing the Khavda Phase IV (7 GW): Part C project, a green energy transmission system in Gujarat. This is Sterlite Power’s second green energy transmission project in the state, and fifth overall. The project involves the construction of a 258 km 765 kV transmission corridor and a 6,000 MVA GIS substation, among other critical components. It will play a pivotal role in evacuating 7 GW of renewable energy from the Khavda renewable energy park, which is part of India’s largest hybrid solar and wind park.
Our Global Products and Services (GPS) segment has demonstrated strong performance. In the second quarter of financial year 2024, we secured new orders worth approximately Rs 20 billion, a substantial increase from the previous quarter. The total order intake for the first half of FY24 reached Rs 33 billion, highlighting robust market momentum driven by rising global demand for high-voltage cables, optical ground wires and other transmission components. We have secured Rs 24 billion in funding from REC Power Development and Consultancy Limited for the Beawar transmission project. We are also exploring equity investments, debt financing and green financing to support our expansion and sustainability goals. Our partnership with GIC to create a $1 billion platform for power transmission in India underscores our commitment to infrastructure development and the nation’s energy transition.
What are your top priorities for Sterlite Power in the next one to two years?
Sterlite Power remains focused on three strategic priorities over the next one to two years – expanding our transmission infrastructure, growing our GPS business and accelerating green energy initiatives to support India’s renewable energy transition.
Transmission infrastructure expansion: We are committed to significantly expanding our transmission build-own-transfer portfolio, currently valued at approximately Rs 120 billion. Over the next five years, our goal is to increase this to Rs 400 billion by taking on complex, high-impact projects. These include key initiatives such as green energy corridors in Rajasthan and Gujarat, as well as the recently completed Lakadia-Vadodara transmission project, which delivers 5,000 MW of renewable energy from Kutch to the national grid.
Growth of GPS: Sterlite Power’s GPS business continues to witness remarkable expansion, driven by high-performance, green products, and specialised engineering, procurement and construction services. In the first quarter of FY25, we secured orders worth Rs 15 billion across both domestic and international markets, reflecting a 15 per cent quarter-on-quarter increase in our order book. With this latest addition, our total order book has now surpassed Rs 65.6 billion. This growth aligns with the ongoing surge in the transmission sector and India’s strong economic outlook, reinforcing our strategic goals to expand in global markets, including Latin America, Africa and the US.
Green energy projects: We are actively supporting India’s renewable energy targets through large-scale green energy corridor projects. Notable among these are the REZs, which will help evacuate 20 GW of renewable power, and the Kishtwar Transmission Project, crucial for hydropower evacuation in Jammu & Kashmir.Additionally, by leveraging advanced technologies such as drones, LIDAR and helicranes, we aim to enhance operational efficiency and deliver world-class projects that are vital to India’s energy future.
What is the outlook for the power sector in the near to medium term?
India’s power sector is on the cusp of a significant transformation. With peak demand projected to exceed 400 GW by 2031-32, there is an urgent need for a robust and expanded power infrastructure. The disruptions caused by electric vehicles, smart buildings, green hydrogen and data centres will only continue to drive up demand.
The government’s ambitious goal of achieving 500 GW of renewable energy capacity by 2030, combined with the growing contributions from solar and wind energy, signals a decisive shift towards cleaner energy sources. This transition will be driven by a series of supportive policies aimed at promoting energy efficiency and sustainability. In addition, with foreign direct investments in the sector exceeding $18 billion, the stage is set for further growth and innovation.
In the near to medium term, we foresee an increase in public-private partnerships, which will be crucial in scaling up renewable energy integration and modernising the grid. Key initiatives such as the development of green energy corridors, the roll-out of enhanced smart meters and a focus on energy storage solutions will be instrumental in managing the growing power demand while ensuring grid reliability.