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Setting up of Transmission Projects through TBCB vs. RTM
Transmission Projects can be set up either under Regulated Tariff Mechanism (RTM) in accordance with Section 62 of the Electricity Act, 2003 (EA 2003) or under Tariff Based Competitive Bidding (TBCB) in accordance with Section 63 of the EA 2003.
The Tariff Policy notified by the Ministry of Power (MoP), Government of India (GoI) in January 2016 stipulates as under:
“5.3…
Further, intra-state transmission projects shall be developed by State Government through competitive bidding process for projects costing above a threshold limit which shall be decided by the SERCs.”
It is to be noted that the Threshold Limit for transmission projects is applicable only at the State level, as the Empowered Committee recommends projects to be undertaken under TBCB or RTM as appropriate, at the Central level.
The MoP, vide its letter dated March 15, 2021, observed that the tariff discovered through competitive bidding process are lower by around 30%-40% than the cost-plus tariff.
Further, Confederation of Indian Industries (CII) in its Report titled “New Age Power Systems for 21st Century India: Challenges, Solutions and Opportunities” based on an analysis of a total of 101 transmission projects (including 58 RTM and 43 TBCB projects) shows that “TBCB projects typically offer ~30% lower tariff than same project awarded on RTM basis”.
Moreover, it has been observed that TBCB projects, which are governed by Transmission Service Agreements (TSA), normally do not result in time and cost overrun and also no time and cost overrun is allowed in TBCB Projects.
Based on the analysis of various TBCB projects, it is observed that the Levelised Tariff of TBCB projects in most of the cases is lower than the levelised tariff computed based on CERC Tariff Regulations considering Captial Cost estimated by CTU. However, in some cases, levelised tariff works out to be higher than the Cost-plus tariff.
Scheme Name/Project | Winning Levelised Tariff (Rs. Crore) | Cost Plus Levelised Tariff (Rs. Crore) | Reduction/ (Increase) w.r.t. Cost Plus Tariff (%) |
Transmission System (TS) Gadarwara STPS (2 x 800 MW) of NTPC (Part-B) | 257 | 527 | 51% |
TS Gadarwara STPS (2 x 800 MW) of NTPC (Part-A) | 290 | 593 | 51% |
Khargone TPP 1320MW | 159 | 310 | 49% |
Construction of Ajmer (PG)-Phagi 765 kV D/C line | 61 | 118 | 48% |
Jam Khambaliya pooling station and inter-connection of Jam Khambaliya pooling station | 33.67 | 66.51 | 49% |
Transmission System associated with LTA applications from Rajasthan SEZ Part-B (Fatehgarh-II Transco Limited) | 71.56 | 158.39 | 55% |
WRSS-21 (Part-B) | 178.87 | 281.85 | 37% |
Transmission System associated with RE Generations at Bhuj-II, Dwarka & Lakadia (Lakadia Banaskantha Transco Limited) | 83.46 | 141.27 | 41% |
Transmission System for connectivity to RE Projects at Bhuj-II (2000 MW) in Gujarat (Bhuj-II Transmission Limited) | 123.77 | 207.69 | 40% |
400 kV Udupi (UPCL)-Kasargode D/C line (Udupi Kasargode Transmission Limited) | 84.74 | 114.44 | 26% |
(WRSS-21) Part A | 95.13 | 174.61 | 46% |
Transmission system associated with LTA application from Rajasthan SEZ (Part-D) (Bikaner-Khetri Transmission Limited) | 100.05 | 229.54 | 56% |
NEW WR-NR 765 kV Inter-Regional corridor | 92.73 | 140.96 | 34% |
Transmission System for Ultra Mega Solar Park, district Jaisalmer Rajasthan (Fatehgarh- Bhadla Transmission Limited) | 38.02 | 83.87 | 55% |
Transmission System associated with Additional 400 kV feed to Goa and additional system for power evacuation from generation projects pooled at Raigarh (Tamnar) Pool | 164.775 | 224.57 | 27% |
Transmission of electricity for Eastern Region Strengthening Scheme-XXI (ERSS-XXI) | 138.58 | 252 | 45% |
Strengthening in Northern Region (NRSS-XXXVI) along with LILO of Sikar-Neemrana 400 kV DC at Babai (RRVPNL) (NRSS XXXVI Transmission Ltd.) | 48.60 | 60.49 | 20% |
NEW WR-NR 765 Kv Inter-Regional corridor | 92.73 | 140.96 | 34% |
Immediate evacuation for North Karanpura (3×660 MW) generation project and creation of 400/220 kV sub-station at Dhanbad | 55.99 | 75.17 | 26% |
Transmission System strengthening for transfer of power from new HEPs in Bhutan, Alipurduar Transmission Ltd. | 129.42 | 184.91 | 30% |
Strengthening of Transmission System beyond Vemagiri | 359.26 | 762.57 | 53% |
Northern Region System Strengthening Scheme NRSS-XXIX | 438 | 418 | (5%) |
NER System Strengthening Scheme-II (Part-B) and V | 432 | 407 | (6%) |
ER System Strengthening Scheme VII | 589 | 561.30 | (5%) |
ER System Strengthening Scheme VI | 1174.02 | 896.7 | (31%) |
NER strengthening scheme (NERSS-VI) | 2027.40 | 1604.5 | (26%) |
In conclusion, wherever feasible, it would be preferable to go for TBCB route to set up transmission projects.