Power producers can transfer power beyond state limits

September 17, 2009: Power producers of the country now do not have to worry about setting up dedicated lines to transmit the power they generate.

Producers with capacity of at least 250 MW will be allowed to transfer power beyond their state limits through a contract for three to 25 years, a notification of Central Electricity Regulator Commission (CERC) has provided.

One of the important features of the notification is that irrespective of ownership, the power producer will be connected to the grid directly and it will not be required to construct a dedicated transmission line.

According to the notification issued in August 2009, bulk consumers with at least 100 MW load can choose to connect to interstate transmission system. The new norms enable medium and long-term "open access" or easy transfer of power across states. "Medium open access" refers to transfer of power for three months to three years and "long-term open access" is for a period of 12 to 25 years.

For thermal power producers with a capacity of at least 500 MW and hydro power makers with capacity of at least 250 MW capacities, the Central Electricity Authority (CEA) and Central Transmission Utility (CTU) will plan the transmission line.

The chairman of CERC, Pramod Deo, said in media reports that Power Grid Corporation of India is being entrusted with the task of constructing transmission lines linking the thermal plants of at least 500 MW capacity and hydroelectric units of over 250 MW capacity to the grid. "This will reduce costs for private sector companies setting up generation projects. Power Grid anyway gets assured returns on its investments," Deo said. He also said that this programme will benefit hydro plants more as they are located in far-flung places.

The new norms will also benefit consumers like steel and cement manufacturers as they will now get access to the inter-state transmission system as long as they withdraw up to 100 MW from the grid, under the new rules. In January 2008, CERC had come up with short-term open access norms that allowed free flow of electricity across states for a period of up to one month at a time.

The Electricity Act 2003 envisages non-discriminatory open access to India's power transmission systems to power producers and consumers alike.

The director of finance at Power Grid, J. Sridharan, said in media reports that it all started with requests from small developers in some states wanting to be connected to the grid. "Some private developers of small generation plants in Orissa, Chhattisgarh and Jharkhand came to us seeking long-term open access," Sridharan said.

He also said the Eleventh Plan outlay of Rs 55,000 crore for Power Grid has already been earmarked for various projects and the company needs additional resources to construct transmission lines under the new norms.

Source: Coal Insights