India plans to invest 10 billion USD in new transmission lines

India plans to invest 10 billion USD in new transmission lines


Date: January 12th 2017

According to Sterlite Power Transmission Ltd, India's largest private power grid operator, India will spend $ 10 billion a year on new transmission lines to meet growing demand in underserved areas.

Pratik Agarwal, chief executive of Strait Transit, said India lacks a sufficient transmission infrastructure to connect growing power capacity to areas where surges in electricity are taking place. The central government may invest $ 6 billion a year, with the remaining funds coming from the states.

"The future of electricity in India should be a great increase, more than in the past 3-4 years of electricity consumption." Agarwal said, "the energy industry is not concerned about power generation, but power transmission.

The demand for transmission infrastructure is being driven by Prime Minister Moody's to 2019 national supply of affordable, uninterrupted power targets. According to the Central Electricity Authority, by March 2022, India's peak electricity demand is expected to grow by more than 53% to 235 GW.

Agarwal pointed out that the government's rural electrification program will promote the investment needs of the power value chain. The realization of the millions of people in the villages and towns will require more power lines.

"We need to spend a lot of money on the transmission," says Anuj Upadhyay, an analyst at Emkay Global Financial Services Inc. "While there is a lot of power generation capacity, there is no electricity in many places due to transmission constraints."

Agarwal's estimates of transmission expenditures are beyond the government's recent projections. The Central Electricity Authority estimates that a total of 2.6 trillion rupees will be spent in the next five years by March 2022, or about $ 7.6 billion a year to increase 62,137 miles of transmission lines and 200,000 MVA of transmission capacity.