Smart-grid is the future of energy conservation: R. N. Nayak

Smart-grid is the future of energy conservation: R. N. Nayak

Power Grid Corporation of India Ltd., a public sector undertaking that transmits about 50 per cent of generated power, is further augmenting its capacity to meet the growing needs of industry.

The energy transmission utility has plans to invest Rs.110,000 crore to build transmission lines and to set up transformers to evacuate power as more power plants are getting ready for commissioning. In a recent interview with The Hindu, Power Grid Chairman and Managing Director R. N. Nayak said that the transmission sector would continue to grow around 25 per cent year after year. He also said that the company would look for more opportunities to grow its presence in the overseas market Edited excerpts:

What are the major problems plaguing the power transmission sector now?

In transmission, the number one problem is basically during construction. The right of way (where to put the tower) problem is most severe because it is on somebody else’s land. The second problem is availability of land to build substations. The availability and possibility of buying that land is also difficult. The third problem concerns the vendors. Because our construction is quite large, we need a large number of vendors. Sufficient numbers of vendors are not available. Fourth, we face problems in realisation of money from the beneficiaries. The financial condition of distribution companies is not very good currently. So collection of money is difficult.

What do your future investment plans look like?

In the XII Plan, we are investing Rs.110,000 crore. In the last financial year, we spent more than Rs.20,000 crore in execution of projects and this year we are in the process of spending Rs.22,000 crore. The balance will be invested in the rest of the Plan period. So lots of projects are coming up.

There was a plan by power companies to build power generation capacity of 87,000 MW in the XI Plan out of which 55,000 MW could come up. Are you ready with the transmission network for this?

Our inter-State transmission systems are under schedule. As far as generation plan is concerned, the evacuation system is being built. The moment the generation capacity is ready, we can evacuate power as our projects are under construction. There will be no delay.

What are your overseas expansion plans?

Now we are only into providing consultancy services in foreign countries. We have not invested outside, except Nepal, where a company has been established with equity participation from us. Other than Nepal, we don’t have ownership in any project in the overseas market though we have presence in 14 countries. In Ethiopia, we are managing their grid, exactly the same way we manage the grid in India.

What is the status ofthe smart-grid project and what is the roadmap ahead?

We took the first project at Puducherry. We have all the features of smart-grid there. The project is complete. One thousand four hundred smart meters have been installed. Anyt feature of smart-grid you name, it is there. Now, the government has planned similar projects at 14 other locations.

Where are the other projects located and when will work start ?

These will be in various States. It is in the domain of distribution. It will not be in our network. We are basically consultants for these projects. In the transmission sector, a smart-grid is under implementation.

What is the benefit of a smart-grid?

The basic objective is that consumers should participate in the project. They should know what is happening in the power supply space. They should know how much they are actually consuming and paying. Presently, someone comes at some time for meter reading and the consumers have no clues, they just pay the bill. In the new system, a lot of intelligence is built into your meter.

How much energy saving happens in a smart-grid set up?

At least 15 to 20 per cent, which is huge. Smart-grid is the future. That is why we have invested in the project. Our objective is not to earn money but to ensure energy conservation and help improve the quality of life in the society.

What is your fund raising plan?

Out of the budgeted capital expenditure of Rs.22,000 crore for this year, 30 per cent will be our money and the rest will be raised through line of credit and issue of bonds. We have already raised Rs.8,000 crore and the balance Rs.6,000 crore will raised.

What are the changes you have brought in since taking over?

The main emphasis has shifted to commissioning. Normally, government companies work on budgets. Up to the XI Plan (before I joined) there was gross spending of Rs.50,000 crore. In the last two and half years, we have done Rs.39,000 crore. So about 77 per cent of what was done in 21 years has now been done in 30 months.

Second, we worked on smart-grid and energy efficiency. Third, we ventured into products. Traditionally, we are a services company and now we have developed products such as smart meters and apertures.

Fourth is the research centre. We did not have a laboratory. The board has now cleared an investment of Rs.150 crore for setting up a lab facility. Fifth is in the area of human resources. Previously, we were not concentrating on creating leaders. Now we are ensuring that at every level there is a leader.

In this front, we are setting up an academy called Powergrid Academy of Leadership at Manesar. It will be operational next year.

Finally, in the area of finance. We were not used to raising money from abroad. All our requirements were met through issuance of domestic bonds. We have shifted our attention to international bonds. We have got external commercial borrowings of $1 billion, for the first time at Powergrid.