Chennai: Power transmission segment is expected to receive capital investments of Rs 3 lakh crore between FY24 and FY30.
The capital investment would be spent towards setting up evacuation infrastructure for upcoming renewable energy projects and to improve network reliability amid growing demand. An increase of intra-state network would be required to meet the growing demand and to improve the network reliability, while the inter-state network is required for transfer of surplus capacity from one region to another.
The addition of new transmission lines and transformation capacity have witnessed a healthy growth over the past 10 years at a CAGR of 5.3 per cent and 9 per cent, respectively. This is in line with the growth in the installed generation capacity and electricity demand. The sector’s growth prospects are strong considering the integration of renewables with the grid.
The government’s target to achieve 500-GW non-fossil fuel capacity by FY2030 necessitates the need to augment transmission infrastructure to evacuate the power generated. According to ICRA’s estimate, the installed generation capacity will increase to 670 GW by March 2030 from 416 GW as of March 2023, with the non-fossil capacity increasing to 400 GW by 2030. Still, the capex requirement in transmission infrastructure would remain large.
Under the National Tariff Policy, the adoption by the private sector participation through tariff-based competitive bidding remained slow in the initial years, the same has improved since 2011, with 128 projects awarded so far.
Power transmission projects face execution risks mainly owing to delays in acquiring right of way and forest clearances. The projects awarded by the Central nodal agencies through the TBCB route have faced delays in execution, with only 14 per cent of these commissioned within the scheduled timeline and the balance witnessing delays varying from two months to three years. The extent of the delay remains largely in the 6-12 months range, with the median delay of over eight months.
