In Short : India’s National Electricity Plan (NEP) aims to enhance transmission and distribution infrastructure, boosting EPC companies’ opportunities. With a planned investment of Rs. 9.15 lakh crore, the NEP focuses on expanding transmission networks and integrating renewable energy. This initiative, targeting rural electrification and improved last-mile connectivity, will drive demand for EPC services, offering significant growth potential for private sector players.
In Detail : The National Electricity Plan (Volume II) is likely to be credit positive for engineering, procurement and construction (EPC) companies in the transmission & distribution (T&D) segment, on account of the large capex to be incurred during FY25-FY32, expects India Ratings and Research (Ind-Ra)
The impending T&D capex to be undertaken in line with the country’s energy goals augurs well for established EPC players operating in the segment, said Prashant Tarwadi, Director Corporates at Ind-Ra. The T&D segment has witnessed tremendous growth over the past decade, with the substation capacity (MVA/MW) increasing to 12,51,080 at end-FY24 (end-FY22: 11,04,450) from 4,09,551 at end-FY12.
During the same period, the network of transmission lines increased to 4,85,544 ckm (circuit km) from 2.57,481 ckm. The installed capacity is likely to reach 610 gigawatt (GW) by end-FY27 from 453 GW at end-H1 FY25. As per the 20th Electric Power Survey report, the peak electricity demand is expected to reach 296 GW by FY27 and 388 GW by FY32. As per NEP-Volume II, released in October 2024, about 1,14,687 ckm of transmission lines and 7,76,330 MVA of transformation capacity (220 kV and above voltage level) will be added during 2022-2027.
In addition, 1,000 MW of HVDC bi-pole capacity and 30,690 MW of inter-regional transmission capacity are planned to be added during 2022-2027. The latter will increase the inter-regional power transmission capacity to 1,42,940 MW by the end of 2027.
The agency said that 14,203 ckm (6,283 ckm in inter-state transmission system and 7,920 ckm in intra-state) of transmission lines and 70,728 MVA (31,820 MVA in ISTS and 38,908 MVA in intra-State) of transformation capacity were added during FY24 (FY23: 14,625 ckm and 75,902 MVA).
The length of transmission lines in the country (220kV and above voltage level) as of 31 March 2024 was 4,85,544 ckm. The total transformation capacity in the country (220kV and above voltage level) as of 31 March 2024 was 12,51,080MVA (including 33,500MW of HVDC capacity).
The target of transmission system augmentation during 2024-25 is 16,667 ckm of transmission lines and 1,16,490MVA of transformation capacity (220kV and above voltage level).
Thus, significant capacity addition is required in India’s T&D segment each year up to FY32. The transformation capacity requirement is increasing because substantial renewable energy (RE) capacity is being integrated into the grid. Potential RE zones are concentrated in a few states far away from the load centres, necessitating bulk power transfer from the RE potential zones to the load centres.
The transmission system is planned to deliver power to green hydrogen/green ammonia manufacturing hubs (about 10.5 GW) in Odisha, Gujarat, Andhra Pradesh, and Tamil Nadu in the initial phase by 2026-27.
