The Centre will launch a production-linked incentive (PLI) scheme by the end of the current financial year to promote the manufacturing of transmission equipment, two power ministry officials told Moneycontrol.
India imports most of its power transmission equipment, including transformers, circuit breakers and switchgears, and as demand outpaces supply across the world, prices have shot up. In 2023, India imported $338 million worth of articles, of which $124 million were from China alone, the World Bank’s database shows.
“Prime Minister Narendra Modi issued directions to the MoP (ministry of power) on November 1 to introduce a PLI scheme to localise the manufacturing of transmission equipment. The government is aiming to roll out the scheme by the end of this financial year,” one of the officials mentioned above said on condition of anonymity.
The government explored various options to localise the supply chain before zeroing in on the PLI scheme, they said.
With renewable energy deployment accelerating globally, the power transmission sector faces supply-chain constraints due to higher demand.
The International Energy Agency’s October outlook report says 1,650 gigawatts (GW) of renewable energy capacity is waiting to be connected to transmission systems worldwide.
Demand on a high
The growing disparity between supply and demand has led to soaring prices of key equipment including transformers, circuit breakers and switchgear. In India, renewable energy developers have questioned how green energy projects are being approved without ensuring the timely commissioning of transmission networks.
The decision comes in the backdrop of power minister Manohar La Khattar launching the National Electricity Plan (Transmission) in October.
The plan proposes over 1,91,000 circuit kilometres (ckm) of transmission lines and 1,270 GVA of transformation capacity to be added during the 10 years from 2022-23 to 2031-32 (at 220 kV and above voltage levels).
Additionally, 33 GW of high-voltage direct current (HVDC) bi-pole links is also planned. The inter-regional transmission capacity has to increase to 143 GW by 2027 and to 168 GW by 2032 from the present 119 GW.
The transmission plan also covers cross-border connections with Nepal, Bhutan, Myanmar, Bangladesh and Sri Lanka as well as potential interconnections with Saudi Arabia, UAE, etc.
According to the power ministry, the transmission sector alone would require investment of over Rs 9.15 trillion till the year 2032.
“The need to plug the supply-chain issues in the transmission sector is urgent since renewable energy installations in India are happening at a very fast pace and the time taken to commission multiple mega transmission projects has to be quick as well. Hence, the PLI scheme now seems inevitable,” the second ministry official said.
India aims to achieve 50 percent of its cumulative installed capacity from non-fossil fuel-based energy resources by 2030.
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