The new single circuit corridor would enable southern region to import an additional 2,100 Mw power

Earlier this week, state-owned power transmission utility, Powergrid (PGCIL) commissioned the first of the two 765 Kilo Volt (Kv) Alternating Current (AC) power lines between Sholapur in Maharashtra (western region) and Raichur in Karnataka (southern region) at a cost of Rs 815 crore.
When commissioned, both the lines would finally end the decades of isolation of the southern region’s four states — Andhra Pradesh, Karnataka, Tamil Nadu and Kerala — from the national grid.

PGCIL is claiming that it has ensured a pan-India synchronous grid. This means the ability of the national as well as the regional grids to withstand sudden power surges and tripping has improved. However, it might be too early to rejoice.

Though the transmission corridor has been readied six months ahead of schedule, PGCIL could go slow on releasing the entire capacity as it fears the integration with the power deficit southern region would put the entire national grid at risk if adequate care is not taken.

While the new single circuit corridor would enable the region to import an additional 2,100 Megawatt (Mw) power, PGCIL might partly restrict electricity flow till December this year, according to sources.

“We had information that for the first six months, no commercial operations would be allowed on this line,” said a senior official of Grid Operations in AP Transco. The blackout of the northern region that occurred in July this year made PGCIL cautious as the southern grid, which faces a peak deficit of 8,000 Mw during summer, would make both sides vulnerable in case of seamless integration, he said.

A senior PGCIL official, who took part in the ongoing testing process of the Sholapur-Raichur corridor, admitted the company would release capacity gradually, starting with 50 Mw. “It might take some time before we are really able to put the entire capacity to use,” he said on condition of anonymity. The power ministry is understood to have asked PGCIL to expedite the project to tackle shortages in view of the upcoming general elections. The project was originally planned to be complete by May this year, the official said.

Tamil Nadu is already understood to have entered into long-term power purchase pacts with companies in the northern region to buy 5,000 Mw using the new corridor capacity. Andhra Pradesh had also entered into pacts for the supply of 550 Mw with KSK Mahanadi last year. The second circuit line of a similar capacity is expected to be ready in six months.

An official from AP Transco said the state transmission company might not get more than 500 Mw capacity allocation on this corridor even if the PGCIL releases the entire capacity given the prevailing competition among large southern states. “However, we hope to manage the situation due to additional generation from 2,000 Mw capacity addition in Andhra Pradesh this year. Similarly, the Kudankulam plant in Tamil Nadu would also help that state to ease the power supply situation there,” he said.

Prior to the new corridor, power consumers in the southern region had been grappling with a severe crunch in availability, despite the region housing significant hydro and gas resources. The southern grid had an access to a transmission capacity of 1,300 Mw shared by all four states. The region’s power deficit was (and is)  three times and its spot power prices are double of the national average. The region registered a deficit of 12.5 per cent between April and November in the current financial year as against the national average of 4.2 per cent. Spot prices in the region too are currently hovering over Rs 5 a unit, as against less than Rs 3 per unit in the rest of the country.

K Vijayanand, managing director of the state-owned power utility AP Genco, said the new transmission capacity would bring down power prices in the southern region in the long run as it would change the supply-demand situation.

Rajesh Mediratta, Director-Business Development at the Indian Energy Exchange confirmed spot prices in the southern region are higher as compared to other regions because of constraints in power flow. “While the Raichur-Sholapur line will improve connectivity, the benefits accruing from the commissioning of a single 765 Kv AC line in the near future are still uncertain. Transmission capacity will definitely improve when both circuits are in place but till that time, it might be operated without scheduling transactions on this corridor to maintain margins for contingency,” he said.

AC transmission links are less costly and more flexible than Direct Current or DC lines but cannot be used to regulate power flow. However, experts say the new links would improve the stability of the national power grid system. Grid security improves with more inter-regional links that can absorb sudden load variations in the event of tripping.

source: http://www.business-standard.com / Business Standard / Home> Economy & Policy> News / by  Dasarath Reddy & Sudheer Pal Singh  / Hyderabad – New Delhi – January 04th, 2014