Power Ministry approves Inter-state projects worth Rs 15,893 cr

December 9, 2021

Union power minister, R K Singh, approved 23 new inter-state transmission system projects of worth Rs 15,893 crore.

About inter-state transmission system (ISTS) projects

  • Out of 23 ISTS project, 13 projects are having an estimated cost of Rs 14,766 crore. These projects will be developed under Tariff Based Competitive Bidding (TBCB).
  • While, 10 projects having an estimated cost of Rs 1,127 crore will developed under Regulated Tariff Mechanism (RTM).
  • The new transmission projects will facilitate:
  1. Evacuation system for 14 GW of renewable projects in Rajasthan
  2. 5 GW of RE projects in Gujarat
  3. 1 GW Neemuch Solar Park in Madhya Pradesh and
  4. Feeding areas near Akhnoor & Jammu region by setting up a Siot Substation in Jammu.

Who approved the projects?

The new projects were approved after examining the recommendations of National Committee on Transmission. Approval was given in accordance with the National Tariff Policy 2016, which provides that ISTS project is developed through TBCB.

Significance of the project

Transmission network expansion under these projects will provide for seamless transfer of power from power surplus regions to power deficit regions. Thus, it will optimise the use of generation resources and meet the demands of end consumers without any transmission limitations. It would further assist the growth of renewable energy-based capacity.

Tariff-based competitive bids

TBCB are the best way to transmit green energy at minimum cost to the masses. Under these norms, developers with lowest average electricity tariffs from a proposed project get to set it up, as opposed to “cost-plus model” in which projects were set up through pacts with distribution utilities.

National Tariff Policy 2016

The National Tariff Policy 2016 provides for imposition of penalties on the distribution companies for power cuts. However, it provides exceptions in case of Acts of God or technical faults. As per the policy, the State Electricity Regulatory Commissions (SERC) and Joint Electricity Regulatory Commissions (JERC) have been mandated not to consider Aggregate Technical and Commercial (AT&C) losses of more than 15% for determination of tariff. It also brought cross subsidy between ±20% of the average cost of supply.

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