By Mahesh Patil
The power transmission and distribution (T&D) sector is set for a significant growth, driven by increasing electricity demand and focused renewable energy goals. India aims to achieve 500 GW of renewable energy by 2030, almost 3x from 180 GW currently installed, marking the largest push for capital investment in power infrastructure.
However, the transition to renewable energy does not only require investment in generation capacity, but also demands an overhaul of power systems to better handle fluctuations in supply. This makes development of modern and digital grids essential to ensure a reliable energy supply during transformation.
In light of the same, the power ministry recently introduced the National Electricity Plan (NEP) for 2023-32, a strategic roadmap for enhancing and expanding transmission systems, both at the central as well as state levels. The NEP outlines an investment of Rs 9.15 lakh crore to address the growing demand. This includes initiatives like integrating renewable energy sources, developing green hydrogen and launching pumped storage projects.
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An estimated Rs 4.2 lakh crore will be required for T&D projects between 2022 and 2027, while Rs 4.9 lakh crore will be required between 2027 and 2032. The national committee of transmission (NCT) has already approved projects totalling around Rs 2 lakh crore in the last two years. Nine HVDC transmission systems with aggregate transfer capacity of 33.25 GW will also be added by 2032, which will be nearly equal to 33.50 GW currently in operation.
There are export opportunities as well. For instance, Noth America is facing challenges with its aging grid infrastructure, which needs modernisation. Around 70% of the US’ grid infrastructure is more than 30 years old, while the average age of power transformers installed is more than 40 years, signalling huge capex potential in the country. This presents a structural export opportunity to power equipment supplies such as conductors, transformers and cables for India.
On the distribution side, the government is focusing on the health of state electricity boards. The RDSS (Revamped distribution Sector Scheme), launched with an outlay of Rs 2.5 lakh crore, is the biggest driver of capex on the distribution front. Discoms spend Rs 50,000 crore annually. Most of this goes to the unorganised sector.
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