'Surplus capacity needs to be created to support open access system'

Merchant power plants, a new concept in the offing under the open access facility provided in the new Electricity Act, have to tie up most of their capacity under long-term agreements as they can sell only 15- 20 per cent of what they generate on a day-to-day basis under the given constraints, said R P Singh, chairman and managing director of Power Grid Corporation of India Limited.

"Open access is a myth under the present circumstances," Singh said, while stating that huge transmission capacity is to be built on a commercially viable basis in the country before the open access facility becomes a reality.

According to him, a 15-20 per cent surplus capacity in the transmission system, which is planned to be scaled up to 37,000 Mw by the end of the Eleventh Five Year Plan from the existing 15,000 Mw , needs to be created which can support the open access principle. "That is how these merchant power plants can become viable," he said.

Transmission is a critical infrastructure for evacuating and transmitting power freely from one region to another, depending on the supply-demand situation in the country.

With the past experience of a couple of transmission projects ending up in huge losses to the PGCIL, the corporation now wants to take up a new project only if it is commercially viable with power transmission agreements, with power generators already in place.

"We are ready to enter joint ventures, as we already did recently, being either a minority partner or a majority partner depending on the requirement in transmission projects. We welcome private investments into this sector. IPPs should understand the fact that private investors come in only when the project is commercially viable," he said, while delivering an endowment lecture on 'Transmission Challenges in Open Electricity Market'.