PGCIL to invest $10.7 billion in transmission

These transmission links are expected to help draw electricity from the power projects developed by independent power producers in the eastern and southern regions of the country. The proposed corridor network will assist in transmitting the power to the energy-starved western and northern states.

The transmission corridor project will include four high-capacity lines of 765 kilovolts (kV) and one 800-kV link.

Sources have said that the initial tendering formalities and detailed project report preparation are in progress. On commencing operations, long-term power access of about 55,000 megawatts (MW) is expected to be facilitated through the network. The transmission corridor proposes to link private coal-fired power projects in Chattisgarh, Orissa and Jharkhand, as well as power plants using imported coal in Tamil Nadu and Andhra Pradesh.

According to government estimates, PGCIL has reportedly received 222 applications for interstate long-term access, with generating capacity and transfer of nearly 199,000 MW and 159,000 MW, respectively, in the next three to four years. Of these, 94 applications, representing long-term transfer of 55,000 MW, have been approved.

PGCIL's current national and interstate grid transmission capacity is about 20,800 MW. By 2010, this will increase to 37,700 MW. During the ongoing 11th Five-Year Plan period (2007-12), India plans to add 78,577 MW of generating capacity. Independent and private power projects are likely to account for 34% of this new capacity.

PGCIL is among the largest energy-transmission utilities in the world. The company operates 71,500 circuit-kilometers of energy transmission network, accounting for 45% of the power transfer in the country. In 2008-09, PGCIL's revenue of $1.43 billion generated a profit of $362.4 million.

In a related development, PGCIL is expected to announce its follow-on public offer in early 2010. Company officials have confirmed that this will be a fresh issue and will consist of further disinvestment of the government's stake in PGCIL. PGCIL is expected to offer 15% equity to generate about $642.9 million. Two domestic bonds of $428.6 million each are also expected to be issued. In September 2007, the government offloaded 382 million shares to disinvest a 5% stake in PGCIL.

New power projects and the expansion of transmission links are critical to meet India's surging energy demand. In 2009-10, the country's peak power deficit is expected to reach 12.6%, compared to 11.9% during the previous fiscal year.