Industry body CII Thursday called for creating an independent central transmission utility(CTU) to ensure a transparent planning and operation process and encourage private investments.
Currently, state-run Power Grid Corporation is the CTU as well as a major player in power transmission in the country.
"The creation of an independent CTU completely distinct from any developer will ensure a transparent planning and development and operation process and encourage private investments," CII said in the report 'New-Age Power Systems for 21st Century' released Thursday.
The report also urged the government to auction all power transmission projects under tariff based competitive bidding regime to encourage investors to exploit Rs 5-6 lakh crore investment potential in next 5 years.
"The report illustrates that competitive bids have ensured tariff reductions by almost 30 per cent compared to projects awarded on a nomination basis that follow a cost-plus approach," Pratik Aggarwal, Chairman of CII's Core Group on Transmission and the Group CEO of Sterlite Power Transmission said talking to media on the report.
This becomes a huge differentiator in the renewable sector. As opposed to a transmission cost of 7-8 per cent, the same cost per unit in renewables goes up substantially as operational efficiencies in the renewable sector is far lower, he added.
Agarwal also said, "transmission is the backbone of the power sector and has a significant role to play in enabling government's vision of 24x7 Power for All, and meeting our renewable energy targets as part of global climate change commitments"
The major recommendations include urgent need to upgrade capacities within existing infrastructure, clearly distinguishing the role of the CTU from the functions of the developer.
The CII also recommended redefining the scope of planning for the centre which should be based on the capacity of the transmission line instead of the geography where the same is located, and finally the need to bring in competition and move away from the cost-plus approach or regulated tariff mechanisms.
The CII had earlier shared a copy of the report with the Ministry of Power. It has worked on the white paper 'New Age Power Systems: For 21st Century India Challenges, Solutions and Opportunities' with a view to partner with the government in developing a blueprint for efficient transmission system.
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