Congestion in transmission caused loss of 3.1 billion units of electricity on Indian Energy Exchange (IEX) in 2014-15 which otherwise could have been used to cater to Delhi for over a month or the entire state of Maharashtra for over a week, signifying need for strengthening transmission network in the country.
Delhi's average monthly consumption is 2.426 billion million units while Maharashtra uses 11.090 billion units in a month, according to data by IEX.
The volume of electricity that could not be cleared on IEX due to congestion and hence could not be transacted has decreased from 5.3 billion units in 2013-14, an IEX spokesperson said adding that though the trend has shown a decline in 2014-15 still 3.1 billion units being unsold was a significant amount.
According to data by Central Electricity Regulatory Commission, 5.59 billion units of electricity on power exchanges were lost to congestion in 2013-14.
"Transmission congestion has become a serious issue with delicensing of generation and recent spurt of renewable energy, resulting in situations where demand in a market could not be met even as supply was available elsewhere. This has led to unsold capacity in some regions pushing down the market prices and resulting in lower PLFs (plant load factor)," said Kameswara Rao, leader, Energy, Utilities, and Mining, PwC.
Congestion occurs when demand for transmission capacity exceeds the available transfer capability.
According to industry experts, absence of sufficient transmission infrastructure especially in South causes frequent congestion and market splitting. Central Transmission Utility Power Grid Corp which enjoys major share of the market has failed to keep pace with growth in the country's generation capacity, they claim.
"There is an urgent need for transmission investment especially at the state-level and grid-scale storage solutions. States could develop transmission and grid-scale storage with funding from development agencies such as ADB and World Bank and through private sector on PPP (public-private partnership) basis," Rao said.
Another industry expert said that private sector accounts for 38% of country's installed generation capacity whereas in transmission private participation is below 5%.
"Government will have to focus on building transmission corridors with the help of innovations and modern technologies if it wants to achieve the goal of providing uninterrupted power to all by 2019. Also, it is a great opportunity for the government to attract private investment that is sluggish for past few years," he said.