By Harshal Vyas, Vice-President and Head – Corporate Strategy, Bajel Projects Limited
In a recent communication to transmission utilities, the Central Electricity Authority (CEA) recommended the usage of 48-fibre optical ground wire (OPGW) instead of 24-fibre OPGW for upcoming projects. OPGW, usually the topmost wire on transmission lines, serves the dual purpose of grounding and telecommunication. The recommendation comes on the back of increasing demand from telecom and internet service providers as the data needs of the country increase. This raises an important question: Were the earlier 24-fibre OPGW cables ever good enough? Perhaps they met the needs at that point in time, but with rising demand, infrastructure requirements have increased. This brings us to the broader question: Is India’s current transmission planning adequate?
Almost a decade ago, the roads sector witnessed inadequate planning. However, the government stepped in with ambitious road projects. For example, in Mumbai, the Atal Setu is an ambitious project that would not have been taken up if only short-term demand was considered. Similarly, the Mumbai metro project highlights the importance of planning 20-30 years ahead.
The National Electricity Plan (NEP) envisages an increase in peak demand from the current 250 GW levels to 458 GW (including demand from green hydrogen and ammonia) by 2032. Generation capacity during the same period is expected to increase from 432 GW currently to 1,000 GW. The plan envisages adding 42 per cent of the transmission line capacity built till 2022 over the next 10 years from 2022-32.
Demand in India is expected to increase further. Electricity consumption by data centres is projected to be 6 per cent of the total consumption by 2030, driven by artificial intelligence, localisation laws and machine learning. India is poised to be one of the fastest-growing major economies in the world, and with rising incomes, aspirations and rapid industrialisation, per capita demand will increase further.
A recent report by the CII titled “Energy Transition for Viksit Bharat 2047” envisages a peak demand of 700 GW by 2047. While the transmission networks planned for 2032 address current projections, evolving energy needs require a more long-term outlook. This includes laying an additional network or uprating and upgrading parts of the existing transmission network. Interstate transmission systems built today are meant to last 25-35 years. Are they sufficient to fulfil the demand towards the end of this period? Even developed economies such as the US are grappling with transmission challenges, highlighting the importance of long-term planning. Should India consider extending its planning horizon to 2047 or beyond? One argument against over-planning is the risk of additional capacity and suboptimal utilisation. Japan’s sprawling metro network caters to urban centres such as Tokyo and the cities of Kyoto and Osaka. Although the networks of Kyoto and Osaka are not fully utilised to optimal capacity as those of Tokyo, the capacity exists nonetheless to accommodate more traffic. India’s metro projects in Tier 1 and 2 cities are planned on this model. The second aspect is that planning requires coordination among various agencies. The NEP takes inputs from the Electric Power Survey (20th EPS), the Ministry of New and Renewable Energy (MNRE)/Solar Energy Corporation of India Limited, private entities, state utilities, etc. The NEP includes additional green hydrogen and ammonia capacity as per MNRE projections. Further, there is uncertainty regarding capex commitments from the public and private sectors over longer periods.
Third, the timeline for drastic cost reductions due to technology advancements remains uncertain. The International Renewable Energy Agency estimates that the levelised cost of hydrogen could drop to $2 per kg by 2030. Government incentives and global commitments to green energy are spurring private sector participation. However, varying forecasts on technology development, ambiguity on global clean energy commitments and the absence of a fixed adoption timeline create uncertainty. Moreover, on the supply side, delays in carbon credit markets, production-linked incentive schemes and solar module manufacturing could hinder renewable adoption. Regulators must strike a balance between realistic developments, future projections and technological dynamics. While overcapacity could pose temporary issues, under-planning creates bottlenecks and hinders growth.
Conclusion
While the current NEP outlines ambitious plans for transmission expansion, there is a growing recognition that a longer-term perspective is also necessary to address future energy needs. The infrastructure sector is considered a growth enabler of the economy, making it is a prerequisite for industrial development. “Induced demand” created by widespread infrastructural development enables wider cyclical economic activity and promotes innovation. Perhaps that is what makes policymaking a challenging task!