“Ministry of Power is working on all fronts: EODB, demand generation in supporting the transmission industry” – Sanjiv Nandan Sahai, Secretary, Ministry of Power

New Delhi: While addressing the Inaugural Session of the CII Transmission Lines Conference 2020 and releasing, CII’s Report on Making the Indian Transmission Line Industry Globally Competitive – A few imperatives Shri Sanjiv Nandan Sahai, Secretary – Ministry of Power, Government of India, said that this is an opportune time to have deep discussions about the transmission industry. The report provides the overview of the Indian transmission lines industry’s regulatory interface and the major challenges that the industry faces today. The Report delves into what needs to be done to remove such roadblocks and improve the industry’s competitiveness. These include recommendations for matching up to global competitiveness, combating the Covid-19 pandemic and Strengthening the Make in India initiative. Power secretary highlighted the Atmanirbhar Bharat creation and steps being taken in creating new manufacturing zones and test facilities. He also highlighted the need to work with SEBs to help create transmission infrastructure with least cost solutions.

Shri Sahai said that while the industry wants huge government investments to continue in the transmission sector but the costs that it imposes on the DISCOMS should also be considered. He cited data from 2010 to 2019 which suggests the interstate transmission and distribution prices have grown at a CAGR of over 22% which is having adverse impact on the DISCOMS and is creating other distortions.

He added that the Ministry, in one of its recent studies, found that while more investments are bound to happen in the sector, there is a lot of unutilised capacity lying with the industry. Shri Sahai said that investments in transmission will be driven by establishment of the Green Energy Corridor, and integration facilitation of solar parks, among other things.

Shri Sahai highlighted that Ladakh is going to attract major investments owing to its high insulation and the Ministry is preparing a Detailed Project Report for the same. He said that the Ministry of Power has taken several steps recently in order to enhance ease of doing business, generate higher demand and support the domestic transmission industry. He said that in July 2020, the Ministry made testing of imported equipment mandatory keeping in view the nation’s security and as a measure of support for the domestic industry. In order to facilitate faster testing procedures, the Ministry is working with the industry and India’s premier institutions (like CPRI) to develop better testing facilities. Secretary also invited suggestions from the industry in order to improve the testing procedures and standards in India to match those at the global level.

In order to promote ease of doing business, the secretary asserted that the Ministry of Power remains responsive to the industry’s need. In order to provide a level playing field, Shri Sahai said that the Ministry has taken certain measures which would eventually make it easier for the private transmission industry to invest. He added that based on requests received from transmission licensees, due to COVID-19 pandemic, COD of under construction transmission projects have been extended by 5 months. Further, two stage bidding process has been converted into single stage which would mean faster bidding, faster execution and greater demand, Shri Sahai added. He also said that industry’s issues with related to contracts have also been dealt with, including capping penalties. On demand front, the Secretary said that the Ministry of Power made it mandatory for all state government-funded schemes to follow the Atmanirbhar Bharat Public Procurement Order.

In his address, Shri K Sreekant, Chairman & Managing Director – Power Grid Corporation of India Limited, said that the domestic transmission industry has played a major role in development of a robust national grid. Cost per unit of transmission has grown significantly with growing network and this is a major concern for the distribution utilities which encourages resistance from building transmission lines. On the other hand, 450 GW target and increasing use of electricity is there. These are opposing forces. Recent Slowdown in domestic market offers an opportunity for the domestic players to deploy surplus capacities for the export markets. Most of the equipment used in transmission is available in India, still transmission towers are being imported. This calls for industry’s investments in such products where import substitution could be made possible at competitive prices. PowerGrid is also looking for building connectivity with Sri Lanka and Bangladesh and more integration with Nepal & Bhutan.

In his address, Mr Manish Mohnot, Chairman – CII Transmission Line Division & Managing Director & Chief Executive Officer – Kalpataru Power Transmission Limited, said that the past year has laid the foundation for several radical transitions, reaffirming the confidence in the Indian growth story. He added that the Government’s aggressive push towards ‘Atmanirbhar Bharat’, improvement in World Bank Ranking for Ease of Doing Business – ‘getting electricity’ to Rank 22 in 2019, guidelines by GOI to support contracting firms by up to 6 months extensions and partial reduction of bank guarantees, a renewed focus on digital and AI and a commitment by prime minister Shri Modi to not only meet but exceed Paris agreement targets with big step of 450 GW renewables by 2020, all of these are set to unleash ample opportunities across the entire value chain. He also mentioned the volatility in steel prices which government shall look into.

In his remarks, Mr T Madhavadas, Co – Chairman, CII Transmission Line Division & Whole Time Director & Senior Executive Vice President (Utilities), Larsen & Toubro Limited said that India’s Transmission industry needs to look outward, embrace technological changes and become more agile.

The Conference witnessed wider participation and rich deliberations by senior Government officials and senior industry representatives/ CXOs from the transmission lines industry and allied industries. The topics ranging from creating an integrated SAARC grid, supporting government vision of 450 GW solar by creating enabling transmission infrastructure, digital solutions for innovation were deliberated in panel discussions. Speakers raised challenges for government to look into such as volatility in steel prices, providing grants for innovation , finding solutions to do away with L1 process while adopting innovation, creation of SAARC grid, supporting with right export incentives and putting in place bilateral treaties for avoiding double taxation , managing local regulatory framework with other nations to support Indian Transmission industry.