Electricity is a key driver of economic growth and poverty reduction. Recognizing this, the government of India declared providing electricity to all households at an affordable price by 2012 as its mission and announced the Power for All by 2012 policy. Fulfilling this mission and policy required the generation of an additional 78,600 megawatts (MW) of electricity under the Eleventh Five Year Plan, 2007–2012. In line with its 2006 Integrated Energy Policy, the government also envisioned (i) the development of strong interregional links to transfer 6,000 MW of anticipated surplus power from the northeastern and eastern regions to meet the power deficits in northern and western regions of India, and (ii) increasing transmission capacity to evacuate power from planned hydroelectric projects (HEPs) in the state of Uttarakhand.
The National Electricity Plan, 2005 envisaged an investment of up to $18.75 billion for transmission system development, of which $13.75 billion was to be made by the Power Grid Corporation of India Limited (POWERGRID) for its own facilities and another $5 billion was provisioned for transmission systems linked to generation projects to be undertaken by private developers or public–private partnerships. The National Power Grid Development Investment Program, requested by the government to be funded by a $600 million multitranche financing facility (MFF) approved by the Asian Development Bank (ADB) in March 2008, was part of the $13.75 billion POWERGRID investment plan.
At appraisal, the MFF was to comprise two tranches, with each tranche supporting one of two planned outputs of the investment program. Tranche 1 was to finance output 1, which was to establish a transmission arrangement for the evacuation and reliable transfer of hydropower generated in the Tehri Valley in the state of Uttarakhand to the northern region. Tranche 2 was to fund output 2, consisting of ±800-kilovolt high voltage direct current northeastern–northern/western interconnector, meant to deliver bulk power generated from HEPs in the northeastern region and Bhutan to the power-deficit areas in the northern and western regions.
These outputs were to support the attainment of the program’s envisaged impact to promote sustainable social and economic prosperity and growth in India by providing adequate and reliable power supply, and its expected outcome of enhanced transmission network reliability and efficiency through expansion and augmentation of the national transmission grid.
However, at the request of POWERGRID, output 1 was cancelled because of delays in the construction of the associated HEPs. The funds were subsequently redirected to additional packages under output 2. During the implementation of output 2, POWERGRID added a bi-directional power flow feature between the high-voltage direct current (HVDC) terminals in the Biswanath Chariyali in the northeastern region and Agra in the northern region at a modest cost of about $1 million. Proving to be highly beneficial in mitigating power shortages in the northeastern region during the lean hydropower generation period of November–April, the feature has enhanced the relevance of the program.
Completion of output 2 enabled the program to contribute to increasing the country’s interregional power transmission capacity to 86,450 MW as of March 2018; however, this contribution has been marginal. It has improved transmission network reliability and efficiency between the northeastern and eastern regions, and built a transmission capacity of 6,000 MW between the northern and western regions. Likewise, the program’s contribution to the national power grid has been marginal.
Overall, while the availability of the transmission system created by the program has been greater than the 99% target, utilization of these assets has been suboptimal. Nevertheless, it is expected that the assets will be optimally utilized once the associated HEPs are commissioned, starting in 2019.
POWERGRID was the executing agency. It set up a program management unit to take charge of day-to-day implementation.
