Early commissioning of transmission projects to be incentivised: Power Ministry.

Transmission projects won under tariff based competitive bidding and those awarded to Power Grid Corporation for system strengthening will now benefit from early commissioning of projects.

The Power Ministry has issued an order allowing such projects to start getting transmission charge from the date of commercial operations, even if it is ahead of schedule.

While the transmission charge will start to accrue early for such projects, the length of applicability of tariff will remain unchanged at 25 or 35 years as may be the case.

The order was issued this week, subject to be implemented with effect from June 12. Therefore, transmission projects commissioned ahead of schedule after June 12 will also be eligible for the incentive.

An industry official said that it was important to give a shot in the arm to developers to commission transmission projects on time to reduce congestion in the grid systems. However, they feel that the policy could have been more liberal by offering tangible benefits to the developers.

'This policy will certainly benefit the grid as lines can be commissioned on the day they are ready, rather than waiting for the contractual code. However, since the total number of tariff years remains unchanged, and no additional bonus is provided, there isn’t material benefit for transmission developers,' he said.

The move comes as northern States suffer from transmission constraints.

In a note on Friday, the Domestic Coal based Power Producers Association said that over the last month there has been restricted flow of power to the Northern Region from the Eastern and Western Regions.

'This has resulted in purchase price of power to increase from Rs. 2 a unit to above Rs. 4 a unit for these States,' the association said.

The situation is impacting power generators in the east and west as they claim that demand is low in both these regions making the Northern Region the only key market as transmission constraints have long affected the south.

HBL