Industry Leaders Urge Policy Push on RE Transmission and Distribution

While renewable energy capacity is expanding at the right pace, its transmission and distribution are lagging. It is the transmission side that needs urgent reforms to boost adoption, industry leaders said at the Bloomberg NEF summit on August 22.

Voicing concern over the sluggish offtake of renewable energy capacity, Sanjeev Aggarwal, founder and executive chairman of Hexa Climate, said, “The government, at the policy level, should focus more on strengthening investment in transmission and distribution. We are adding capacity very quickly, but there is a need to distribute that capacity at an equal pace. The whole focus seems to be on the generation side.”

Currently, transmission infrastructure is concentrated in a few states. The inter-state transmission system (ISTS) waiver has “worked too well”, crowding 70% of renewable capacity into just four states, including Rajasthan, Gujarat, Karnataka and Tamil Nadu, said Rajiv Mishra, managing director of Apraava. “That has meant that most of the transmission projects are in these states, leading to a multifold increase in right-of-way problems.” He suggested shifting generation to other states through “state-specific bids”.

Mishra also said that nearly a fifth of the capacity remains locked due to connectivity issues. “Either the people who have got the connectivity do not have the project or vice versa. A ‘use it or lose it’ policy would be useful to consider in the short term,” he added.

Zelestra India CEO Sajay KV called for a level playing field and region-wise allocation so that at least 7–8 players can build evacuation infrastructure. “Right now, 70% of the evacuation projects are won by the lowest bidder. We need a complete revamp of the policy,” he said.

Suzlon CEO JP Chalasani argued for greater government support for project execution. “The industry is mature. It is the execution side that needs increased support from both the Central and state governments,” he said.

Defending recent curtailments of renewables capacity, Central Electricity Authority chairman Ghanshyam Prasad said, “This year, there have been complaints about RE capacity curtailment because demand has not picked up. Developers must be careful about adding capacity in line with demand growth so that we do not enter into an era of stressed assets.”