As per estimates by Central Electricity Authority (CEA), there are around 46,000 MW of generation assets which are stranded for the lack of last mile connectivity and evacuation related issues. Setting up this capacity will require an investment of Rs 2.5-3 trillion over the next five years.
Power transmission sector in India acts a pivotal role in supplying ertlectricity to the end consumers. It is imperative to note that the growth of power sector is dependent on the development of a robust and non collapsible transmission infrastructure. Post FY 2015, the country has witnessed a robust growth in the terms of renewable capacity addition, with solar being the flag bearer of this growth. Courtesy this, the country witnessed a shift in terms of power generation mix with renewable energy catering to 18.20 per cent of the total installed capacity.
Having said so, India looks to cross 400 GW mark in terms of installed capacity by FY 2022 meaning heavy transition from current inter regional transmission capacity of 78 GW. Dedicated green energy corridors and enhancement of transformation capacity of existing sub stations, along with setting up of new sub stations will primarily drive the opportunity galore in the sector in near future. Also, since the current power traction dynamics in the country is shaping up more in the favour of open access transactions, a robust and more enabled power transmission infrastructure should be developed in order to facilitate, what is termed as "True Open Access".
India's peak load demand is only 164 GW of the achieved installed capacity, and aggravating this situation further, some of India's power surplus regions do not have adequate power evacuation infrastructure which could alleviate the recurring supply shortages in other parts of the nation.
To overcome the problem, the government has initiated schemes such as Saubhagya, which will help in providing electricity to each and every household in the country by December 2018, creating a massive opportunity for transmission companies; apart from emphasising on Green Corridors and Inter State Transmission System (ISTS) based transmission projects at an investment of over Rs 1 trillion. The government also initiated competitive bidding of the projects to involve the private sector companies in executing large transmission projects. The T&D segment in India is estimated to witness a planned investment of $75 billion in the next five-seven years. Transmission projects worth Rs 1 trillion are expected to come up for bidding in the next 12-18 months.
The transmission sector would largely be driven by the booming renewable generation in the country. The government's plan to take renewables to 175 GW by 2020 would not see the light of the day without a significant ramp of transmission. The sector has not been coming up in the recent years as fast as required for evacuating low gestation period renewable projects. This has even forced SECI to take back the award of generation of renewables during the last few months.
This lack of transmission poses a major threat to renewables' story. Ved Mani Tiwari, Chief Executive Officer (Global Infra Business), Sterlite Power Transmission says, "The country would require the transmission ramp up at central level itself of about Rs 1 trillion, starting from now, to effectively ensure that no renewable generation projects are bottled up as they come up by 2020. A similar amount of network building is required at the state level too to effectively absorb the low-cost renewable power."
The history of TBCB in the country shows that the fastest and least cost ramp up of transmission could be achieved through TBCB only. This route of project execution has ensured that the consumer is required to pay for transmission infrastructure, lesser by at least 30 per cent as compared to the traditional cost-plus mode of project execution where the government awards projects on nomination basis.
Green energy corridors
These are high voltage inter-state and intra-state transmission lines which are being created to evacuate wind and solar electricity from the remote corners of the country connecting rich renewable energy states with non-renewable energy states. The plan also calls for strengthening the control infrastructure and establishing Renewable Energy Management Centres (REMC) at load dispatch centers at state, regional and national levels.
There has already been enough progress towards the development of the Green Energy Corridor and more funds have been made available for fiscal year FY19. The Standing Committee on Energy in its report stated that the government has allocated Rs 6 billion towards the Green Energy Corridor for FY19 and the programme is targeting a cumulative physical goal of 3,000 circuit kilometers (ckt-kms) of transmission lines this year. The target for 2020 is 8,500 circuit km.
However, the Standing Committee pointed out that there is a mismatch between this year's goal and the funds allocated. The target for transmission line installations in FY19 is more than five times as large as the physical target for 2017-18 but the budget is only increased by 20 per cent. "For FY18, Rs 5 billion was provided for the installation of 350 circuit km of transmission lines and for FY19, Rs 6 billion is being allocated for the installation of 1,900 circuit km of transmission lines," the Committee noted, citing its apprehension if the Green Energy Corridor target could be attained in the next couple of years as still 5,500 km needs to be constructed.
ISTS-based Transmission Projects
Under this system, the developer is responsible for creating the transmission infrastructure from its generating assets to the nearest substation. It should be noted that revenue for ISTS projects is assured through long-term (30-35 years) transmission service agreements and is delinked from the quantum of electricity transmitted. The revenue is contingent on maintaining line availability above 98 percent. But this is easily achievable through routine Operations and Maintenance (O&M) and is not technically challenging.
The SECI conducted India's first auction of wind power projects in February 2017 in which tariff of Rs 3.46 was discovered, which was much lower than Feed-in-Tariffs (FiT) in vogue those days. This was a 1,000 MW bid for projects to be connected on ISTS, wherein the power generated from one renewable resource-rich state could be transmitted to other renewable deficient states. Mytrah, Inox, Ostro, Green Infra and Adani were winners of the bid.
"The first auction also signified a major shift from the earlier regime of state-specific FiT model to a Pan-India, market-driven mechanism," the SECI said in a release. In all, the SECI issued five tenders for wind power projects of cumulative capacity of 7,250 MW of which 6,050 MW capacity was awarded. Besides SECI and NTPC being central agencies, the state agencies of Tamil Nadu, Maharashtra and Gujarat have brought out bids and awarded projects based on tendering.
The competitive bidding has also helped in arriving at market-driven tariffs for transmission projects. Experts believe that as the size of investments required in the transmission segment is fairly large and the execution of new projects requires managerial and technical bandwidth, it was imperative that other players would be introduced in the field beside PGCIL.
"The private players have been able to use the competitive bidding process to its advantage by offering better tariffs while exploiting their technical strengths and financial flexibility. Transmission has also attracted interest from international companies seeking growth markets and having a lower cost of funds. All in all, this has been a largely win-win for the stakeholders," Salil Garg, Director-Corporate, India Ratings, said.
Monopoles: A cost effective proposition
A monopole tower is a new type of electricity and Wi-Fi transmission tower which takes up less space as compared to the conventional lattice tower. With states like Uttar Pradesh, Bihar, Madhya Pradesh, Rajasthan, Karnataka and Haryana embarking more on monopoles, the demand for this neglected industry is likely to witness an upward trend.
Advantages of monopoles in comparison to conventional towers are: Lesser right of way (RoW), better appearance, less components resulting in faster installation, better reliability under extreme conditions, design flexibility, vandalism proof, reliable performance and longer service life.
A case in point is, recently, the Delhi Metro Rail Corporation (DMRC) for the first time, installed six monopole towers for Uttar Pradesh Power Transmission Corporation (UPPTCL) at Noida Sector 34 on its under-construction corridor from Noida Sector 34 to Electronic City. These towers are 61.2 mts high, the highest for any monopole tower in India.
The electricity transmission lines of UPPTCL were infringing the alignment of the corridor in Sector 34, hence DMRC decided to raise the height of these transmission lines. The area is heavily populated and also sees a great volume of traffic on a daily basis, hence raising the height of the towers was not an easy task.
The decision to install monopole towers was taken to reduce land requirement and save land cost. The space required by a conventional transmission tower was 245 sq mts per tower, whereas one monopole tower required only 33.26 sq mts land. Each monopole tower weighs around 40 tonnes.
To further curtail the requirement of land, two transmission lines were clubbed into one monopole tower, it said. The monopole towers were erected using heavy duty cranes of 400 tonne capacity. Heavy machinery and trailers were also used in the erection of these towers, which was extremely difficult considering the densely populated area.
DMRC took adequate safety precautions while erecting the towers and testing of the entire structure was done by experts from IIT Mumbai and IIT Roorkee. This completely elevated corridor from Noida Sector 34 to Electronic City is approximately 6.8 kms long and comprises six stations.
Industry Ripe For M&A
The transmission line business enjoys a longer asset life of 50 years as compared to other infrastructure projects such as roads. They also have higher payment security and lower counter party risk because payments come through the Power Grid Corporation of India, which acts as the central transmission utility. Also, transmission projects receive tariffs based on the availability of transmission line and not the quantum of power transmitted through it, which makes the asset a safe bet for investors.
Several debt-laden power firms have put up their operational transmission assets for sale to pay off their loans. The biggest example would be the sale of 3,063 circuit km of transmission line by Reliance Infrastructure for Rs 10 billion to Adani Transmission to pay off its debt. Adani also bought Reliance Infrastructure's distribution business in Mumbai for Rs 180 billion.
Adani Transmission, with a cumulative transmission network of 12,000 circuit km, is the largest in the segment in India. It is reported that renewable energy company Greenko Group has been eying operational assets for a while and was in talks with Essel Infraprojects to buy five of its transmission projects. Besides, Tata Power, Sterling and Wilson, a Shapoorji Pallonji Group company has also evinced interest in buying out transmission assets.
Resolving the challenges
Integrating the new capacity with a nascent grid poses a formidable challenge. India's solar power generation has gone up by more than 40 times from 0.5 MW in 2011 to 22 GW now, but the T&D infrastructure is far from prepared to evacuate the kind of solar power being injected into the grid.
The evacuation for wind power projects can be resolved through better planning and co-ordination amongst the various agencies, i.e., PGCIL, SECI, NTPC, MNRE and the Ministry of Power. He notes, "It is important that evacuation issues are addressed before bidding for the renewable power projects starts instead of solving the issue after bidding. We are already seeing positive developments towards this wherein, the nodal agency for the development of renewable power, SECI is keeping the central transmission utility in confidence prior to the bidding and also sharing its 3-5 year development plans so that the CTU has ample time and direction to build evacuation infrastructure accordingly," Garg, India Ratings said.
"With the transmission system failing to keep pace with the increase in solar power generation, the glaring mismatch is bound to put immense pressure on the present transmission infrastructure, a situation which we can ill-afford bearing in mind the high stakes in the solar sector," Simarpreet Singh, Director, Strategy, Hartek Group. Singh further says, "With the evacuation system not yet ready, we are witnessing a situation where solar plants are being constrained to restrict generation, which is resulting in huge financial losses for developers. Consequently, the preparations for the next round of auctions are also in limbo."
Though the government has embarked on a USD 3.5-billion Green Energy Corridors (GEC) programme to overcome these challenges of power evacuation by strengthening the grid network, it is a daunting task which has to be taken up on a war footing to be able to deliver the desired results. The biggest challenge before India is to ensure that transmission systems are in place before the solar projects are ready. Considering that executing transmission projects takes up to five years as compared to 12-18 month for solar projects, we need to act urgently and decisively.
Maintaining grid stability can pose a major problem when a large amount of solar power is injected into the grid. The situation can, however, be overcome with modern technological breakthroughs and advancements like smart grids, monopoles and storage solutions.
Crisil Research has estimated that investments of Rs 9-9.5 trillion will come into the power sector over the next five years. However, the share of investments by the generation segment is expected to be significantly lower at 30 per cent over the forecast period as compared to 51 per cent over the last five year. Because the investments in transmission were not undertaken while the generation capacity was being built, particularly in the south and north-eastern region, transmission capacity and particularly inter-state transmission needs investments soon.
Sabyasachi Majumdar, Senior Vice President and Group Head, ICRA Ratings said that the new wind energy projects need to bulk up their transmission capacities or face lower tariffs. "Prolonged delays in securing (grid) connectivity would impact the project commissioning timelines (for new wind projects) and in turn, affect the viability of the projects for the winning developer. Delays beyond six months from scheduled commissioning date would result in a reduction in PPA tariff."
Monopoles: Is it costly or cost effective?
According Sanjiv Bhandoh, General Manager - Projects, TLT EPC, Bajaj Electricals, the only thing which seems to be a disadvantage is the cost of monopole, which is not a factor, when you consider the complete solution it provides and the life-cycle cost of lines running through urban and suburban areas is comparatively less with use of poles. "Monopoles are not only structures, but are solutions," he said. Bhandoh outlines how with the multi-purpose use of monopoles the implementing agencies can bring down the cost. Since space is a constraint in urban areas, monopole can be used as a smart pole and accommodate space for Wi-Fi infrastructure, surveillance systems, EV charging station, solar lighting to name a few.
According to him, the cost can further come down if the industry avoids sheet wastage and designs its monopoles accordingly. For example, with 92 monopoles to erect, Bajaj Electricals has done the foundation in just 45 days, which brings down the fixed cost erection. Considering that the entire erection is equipment oriented, there is minimal human intervention, which in turn saves labour cost. Bajaj was the first to design, manufacture and erect steel monopoles in India, and now it continues to bring in an expertise of over 10 years to the table.
The Bajaj EPC Power Transmission segment was the first and the only one in India to design, type test, manufacture and install monopoles of 400 kV double-circuit line with a height of 42 m for Power Grid Corporation of India Limited for their project line from Dadri to Ballabhgarh. Apart from PGCIL, another notable project where BEL displayed its expertise is UPPTCL-132 kV 90-degree deviation monopole line at Agra. The steel monopole structures are designed as per ASCE/ASTM manual 72. Right now, Bajaj is executing 400 kV monopole project for UPPTCL at Noida, which is India's largest ever.
It is expected that in the years to come, with better designing taking place, the cost of monopoles will likely to cost 1.25 times of the conventional tower than the earlier 2.5X charge. That being said, there is a major demand for understanding the concept of monopoles from states namely Uttar Pradesh, Bihar, Madhya Pradesh, Rajasthan, Karnataka, Haryana to name a few. These states have shown interest and have started adopting the concept of monopole as a solution and an alternative. In fact, said Devesh Bansal, Director, Skipper, "PGCIL, too has come out with tenders for Monopoles installation and type testing of monopoles upto 765 kV."
Deepak Lakhpati, Chief Design Officer, Sterlite Power is of the opinion that in recent times, monopoles are being installed very selectively for a very few road crossings and metro constructions in major cities. But for longer lines, it is still an expensive option, unless the market size improves and reduces the cost.
Lakhpati and Bandoh suggest that, once the Indian standard for designing and installation of monopoles is developed and released, there is a necessity to include it in the request for proposals by the authorities like how Bihar did. Only then will the market perception about monopoles change.
Monopoles are advantageous due to visual impactful and better suited where ROW is not available to install lattice towers. Monopole is much faster to install, comes in slip joint or flange joint for connections and hence does not contribute to shortages at site as commonly experienced in lattice towers. Monopole infrastructure is a single pile foundation and much faster to execute compared to four open foundations of a transmission tower.
However, the differences between monopoles and conventional towers are not so glaring except for shape and geometry. Monopoles can carry equal loads with ease and still can serve longer. Due to flexibility built in, monopoles are less susceptible to failure during severe wind storms, which is not the case with conventional towers.
"The load carrying capacity of a lattice tower is upto 1,200 kV and higher whereas for the Monopoles it is upto 765 kV only, with no major difference in the frequency levels. Yes, they both can be adapted to both AC / DC lines," said DC Bagde, Managing Director, Transrail Lighting.
ôThere is no difference in power carrying capabilities between monopoles and lattice towers as long as the electrical clearance is maintained. They can be adopted by both AV & DC lines,ö mentioned Lakhpati. However, Lakhpati demand a code of practice for design and installation of monopoles in India, which is currently off the radar when it comes to Indian standard for designing of monopoles.
There are a few differences between lattice towers and monopoles. Lattice towers, as the name denotes is a cantilever tower made up of angular steel pieces. As such, lattice tower calls for four foundations, while monopole may require only one.
For a typical 220 kV double circuit monopole of 300 metres with a ZEBRA conductor the differences in the structure will be as follows: Lattice may require higher land base than a monopole, weight of the monopoles is higher compared to that of the tower, RCC work for the monopole will be seven times that of the tower, steel required for monopole is at least five times more than that of the tower and lastly, monopole is costlier compared to the lattice tower.
Availability of space: Space consumed by a monopole compared to a lattice structure of same capacity is almost 70 per cent less. Hence, monopole structures become suitable for heavily populated and congested areas like metros and other cities
Easy installation: As the number of components used in monopoles are much lesser than the lattice tower structure the installation times are much lower
Designing: Due to its built-in flexibility and lower aerodynamic coefficient poles are subjected to lesser wind load as compared to conventional tower structure
Aesthetically pleasing: Occupying lesser space makes Monopoles look aesthetically smarter Protection against vandalism: Since poles being more continuum type structures, they offer more resistance to vandalism
Difficulty in transportation: Monopoles require heavy cranes for their deployment and installation.
Limits transmission of high voltage current: Manufacturing limitations for voltage higher than 765kV.