December 22, 2016

India to invest big on transmission lines under green corridor project to meet 175GW clean energy target by 2022

India will invest Rs127 billion on lines to transmit power from solar parks to enable Prime Minister Narendra Modi’s goal of boosting clean energy capacity to 175 gigawatts by 2022.

The dedicated transmission lines, part of the so-called green corridor project, will transmit 20 gigawatts of power capacity from 34 solar parks across 21 states, the government said Wednesday in a series of reports commissioned by minister for power, coal and mines Piyush Goyal. The reports were written by Power Grid Corp. of India Ltd to develop plans to integrate renewable energy on the national grid.

The green-energy corridor is part of the country’s plans to boost transmission capacity to enable a seamless flow of electricity from clean electricity producing states to consuming states that face power shortages. New lines will also help manage intermittency challenges of renewable energy, especially as clean sources increase their share of power generation to almost 50% in some states.

The inter-state portion of the transmission investments will cost Rs80 billion, while intra-state lines will require another Rs47.45 billion, according to the government.

India will receive a soft loan of about €1billion for the corridor’s development from the German development bank KfW, Goyal informed India’s lower house of Parliament last week.

Intra-state transmission under the plan will be funded through a 20% equity state held by the state government, 40% in the form of a grant from the National Clean Energy Fund and the soft loan accounting for the remaining 40%.

The inter-state transmission schemes are to be funded as 30% equity by Power Grid Corp. and 70% as a soft loan, according to Goyal.

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