Harish Agarwal, CEO – Supreme & Co. Pvt. Ltd. Vice President – IEEMA

Harish Agarwal, CEO – Supreme & Co. Pvt. Ltd. Vice President – IEEMA

With an ambitious target to give 24X7 electricity to all, the government is eyeing INR 3 lakh crore worth investments in power transmission and distri...

Sam Cherian, Chairman, Elmeasure India Pvt. Ltd.
Dr. Kazuhiro Imaie, Managing Director of Hitachi Hi-Rel., Ahmedabad, India
Yoshiaki Inayama, MD of Toshiba JSW Power System

With an ambitious target to give 24X7 electricity to all, the government is eyeing INR 3 lakh crore worth investments in power transmission and distribution business, as it gears up to free the sector from a gridlock of fuel scarcity, regulatory clogs and other issues. The government had said that power sector is set for $250 billion investments across different segments, including transmission and distribution.

The New Year is started so what are your plans for this year? What are the initiatives we can see in 2017?

With an ambitious target to give 24X7 electricity to all, the government is eyeing INR 3 lakh crore worth investments in power transmission and distribution business, as it gears up to free the sector from a gridlock of fuel scarcity, regulatory clogs and other issues. The government had said that power sector is set for $250 billion investments across different segments, including transmission and distribution.

Giving a break-up of investments, Power and Coal Minister Piyush Goyal had said renewables is set to get $100 billion, while transmission and distribution segment is likely to attract $50 billion.

So, Centre is planning investments of INR 3 lakh crore in the T&D sector and have already started the Deen Dayal Grameen Jyoti Yojana and Integrated Power Development Scheme. With all this, we think we will be able to reach the length and breadth of the country and enhance the T&D network and make sure everybody gets adequate power.

In the fast growing economy of India, what is the level of impact the transmission and distribution industry brings in and what are its current challenges?

I think if everything goes well, investments in the transmission segment are expected to grow at a robust pace. This will be due to mainly government’s thrust on improving transmission infrastructure, augmentation of inter-state transmission capacity from 59 GW in 2015-16 to 91 GW by 2021-22, development of ‘Green Corridors’, and the rising private sector participation in transmission projects through ‘tariff-based competitive bidding (TBCB)’.

Also, investments in the distribution segment are expected to increase with the implementation of UDAY, as improved liquidity with discoms would be invested in strengthening the distribution infrastructure and reducing AT&C (aggregate technical and commercial) losses. The central government’s funding support through IPDS (Integrated Power Development Scheme) and DDUGJY (Deendayal Upadhyaya Gram Jyoti Yojana) would further assist investment growth in the distribution segment.

One of the critical challenge is timely and effective implementation of the Ujwal Discom Assurance Yojana (UDAY). At present, UDAY is in different stages of implementation in 21 states/union territories, thereby covering states with almost 95% of the outstanding discom debt. I expect the gap between the average cost of supply and the average revenue realised to decline significantly over the next five years.

Another major challenge is Chinese entry into supervisory control and data acquisition (SCADA) systems being added to smarten up city grids raises security fears. SCADA is a computer-based industrial automation control system that maintains balance between demand and supply in the grid.

The Chinese equipment will be increasing the vulnerability of power sector if exposed to suspect individuals, companies and nations which may use such access to their advantage. China has reportedly mounted repeated attacks on Indian computer networks and the information flowing in the Indian grid was more vulnerable than ever to hacking.

 The Government of India is now taking measures to increase healthy competition and a much more open access to the power market amongst private and public companies in the power sector. What initiatives is SUPREME taking in order to prepare with what is expected to be a much more competitive atmosphere?

Key issues faced by transmission project developers include delay in land acquisition as well as obtaining right-of-way and environment clearances. Inadequate investments at the intra-state level, which are restricting the flow of power from surplus to deficit areas, and the ineffective implementation of open access transactions, also pose serious challenges for the transmission segment. There is an urgent need to create liquidity in the market to sustain private interest.

Liquidity in the system will increase in release of orders. However further boost the funding would materialize a large number of projects in transmission segment. We, the industry are therefore cautiously optimistic for at least next 2 quarters of 2016-17.

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