Executive Summary

Transmission infrastructure forms the backbone of India's electricity grid, evacuating power from generators to load centers. Understanding transmission licensing is critical for project developers, investors, and regulatory practitioners:

Central Transmission Utility (CTU): Interstate transmission, regulated by CERC
State Transmission Utility (STU): Intrastate transmission, regulated by SERC
Private Transmission Licensees: TBCB model, competitive bidding
Connectivity Framework: Long-term access, medium-term access, short-term open access
Tariff Mechanisms: Regulated returns, incentives, penalties

This guide examines transmission licensing frameworks, tariff structures, connectivity procedures, and recent policy reforms.

1. Statutory Framework

Electricity Act, 2003

Section	Provision
Section 14	Functions of Central Transmission Utility (CTU)
Section 38	State Transmission Utility (STU)
Section 39	Open access in intrastate transmission
Section 62	Tariff determination for transmission
Section 63	Competitive bidding for transmission projects

Key Regulations

Regulation	Issuing Authority	Purpose
Transmission License Regulations	CERC/SERCs	Licensing procedure, conditions
Connectivity Regulations	CERC/SERCs	Grant of connectivity, access
Sharing of Inter-State Transmission Charges	CERC	Transmission charge allocation
Tariff Regulations	CERC/SERCs	Transmission tariff methodology

2. Central Transmission Utility (CTU)

Power Grid Corporation of India Limited (PGCIL)

Aspect	Details
Status	Designated CTU under Section 38
Ownership	Central PSU (GoI majority stake)
Network	~1,75,000 circuit km (765 kV, 400 kV, 220 kV)
Regulator	CERC
Tariff	Regulated under CERC Tariff Regulations

CTU Functions

Function	Scope
Transmission planning	National Transmission Plan, grid expansion
System operation	Coordination with Regional Load Despatch Centres (RLDCs)
Connectivity provision	Long-term, medium-term, short-term access
Network maintenance	Operation and maintenance of ISTS
Loss reduction	Minimize transmission losses

Inter-State Transmission System (ISTS)

Voltage Level	Typical Use	Coverage
765 kV	Ultra-high voltage, long-distance bulk	Green Energy Corridors
400 kV	Backbone of ISTS	Pan-India
220 kV	Regional interconnections	State periphery, imports/exports

3. State Transmission Utility (STU)

STU Structure

State	STU	Ownership
Most states	State Transco (e.g., MSETCL, KPTCL)	State PSU
Some states	Part of integrated utility	Unbundled
Private STU	Rare (e.g., some sub-transmission licensees)	Private

STU Functions

Function	Scope
Intrastate transmission	132 kV, 66 kV, 33 kV networks
Connectivity to generators	Intrastate gencos, captive plants
Interface with ISTS	Injection/drawl points with CTU
State load despatch	Coordination with SLDC
Open access facilitation	Intrastate wheeling

STU Tariff Regulation

Element	SERC Regulation
Transmission charges	Per MW per month
Wheeling charges	Per kWh for open access users
Losses	Normative transmission losses
ROE	15.5% (typical)

4. Private Transmission Licensees

Tariff-Based Competitive Bidding (TBCB)

Aspect	Details
Legal basis	Section 63, Electricity Act
Bidding parameter	Lowest transmission charge (Rs/MW/month for 35 years)
Ownership model	Build-Own-Operate-Transfer (BOOT) or Build-Own-Operate (BOO)
Regulator role	CERC adopts bid, monitors compliance

TBCB Process

Stage	Timeline	Activity
1	Month 0	CTU identifies transmission project need
2	Month 1-3	Techno-economic clearance, bidding documents
3	Month 4-8	Competitive bidding (RFQ, RFP)
4	Month 9	Letter of Intent (LoI) issued
5	Month 10-12	Transmission Service Agreement (TSA) signed
6	Year 1-3	Construction, commissioning
7	Year 3-35	Operation, tariff recovery

Major Private Transmission Projects

Project	Developer	Scope	Capacity
Champa-Kurukshetra	Adani Transmission	HVDC link	6,000 MW
Bikaner-Moga	Sterlite Power	HVDC	3,000 MW
NEER-I	Adani Transmission	North-East connectivity	5,000 MW

5. Connectivity Framework

Types of Transmission Access

Type	Duration	Application Timeline	Use Case
Long-Term Access (LTA)	>12 years	48 months before COD	New generation projects
Medium-Term Access (MTA)	3-12 years	11 months before	Capacity addition, PPAs
Short-Term Open Access (STOA)	<3 months	1 month before	Opportunistic sales, balancing

Connectivity Application Process (CERC)

Stage	Timeline	Activity
1	Day 0	Application to CTU with fee
2	Day 7	CTU acknowledges, assigns application number
3	Day 30	System study completed
4	Day 60	Connectivity agreement issued (if network adequate)
5	Day 90	Network augmentation timeline (if required)
6	Post-augmentation	Connectivity operational

Connectivity Charges

Component	Quantum	Purpose
Application fee	Rs 10-50 lakhs	Processing cost
Bank guarantee	Rs 10-20 lakhs/MW	Commitment security
Connectivity agreement fee	One-time payment	Infrastructure reservation
Transmission charges	Monthly (post-COD)	Use of ISTS

6. Transmission Tariff Methodology

CERC Transmission Tariff Regulations

Component	Calculation Basis
Return on Equity	15.5% of equity
Interest on Debt	Actual interest rate
Depreciation	Straight-line, 35-year life
O&M Expenses	Normative per circuit-km
Interest on Working Capital	Normative computation

Annual Transmission Charges (ATC)

ATC = Return on Equity + Interest on Loan + Depreciation + O&M + Interest on Working Capital

Beneficiary Type	Sharing Basis
Point-to-point	Specific beneficiary pays
General network	Pooled sharing based on MW drawal
LTA holders	Pro-rata allocation

7. Transmission System Planning

Transmission Planning Process

Stage	Responsibility	Output
Long-term planning	CEA, CTU	Perspective Transmission Plan (10-15 years)
Medium-term planning	CTU, STUs	5-year expansion plan
Short-term planning	CTU	Annual augmentation schemes

National Transmission Plan (NTP)

Plan Horizon	Capacity Addition Focus	Investment (Approx.)
2023-2027	Renewable integration, Green Corridors	Rs 2.5 lakh crore
2027-2032	500 GW RE target support	Rs 3 lakh crore

8. Green Energy Corridors

Renewable Energy Integration Transmission

Corridor	States Covered	Capacity	Status
Green Energy Corridor Phase-I	Tamil Nadu, Rajasthan, Karnataka, Gujarat	9,700 MW	Operational
Green Energy Corridor Phase-II	13 states	20,000 MW	Under implementation
Inter-State Green Corridors	Pan-India ISTS augmentation	66,000 MW	Planned

Transmission for Renewable Energy Zones

RE Zone	Transmission Requirement	Technology
Rajasthan (solar)	25,000 MW evacuation	765 kV AC, HVDC
Gujarat (solar/wind)	30,000 MW	765 kV, HVDC
Tamil Nadu (wind/solar)	20,000 MW	400 kV, pooling stations
Ladakh (solar)	13,000 MW	HVDC (long-distance)

9. Transmission Losses and Efficiency

Loss Benchmarks

Voltage Level	Normative Loss (%)	Actual (Average)
765 kV	1.5-2.0%	1.8%
400 kV	2.0-3.0%	2.5%
220 kV	3.0-4.0%	3.5%
132 kV (intrastate)	4.0-5.0%	4.8%

Loss Reduction Incentives

Performance	Incentive/Penalty
Loss < normative	Share of savings (typically 30-50%)
Loss > normative	Penalty (disallowed in tariff)

10. Transmission Licensing Compliance

License Conditions (CERC/SERC)

Condition	Requirement
Technical standards	Comply with Grid Code (IEGC/State Grid Code)
Safety norms	CEA safety regulations
Network availability	>98% availability target
Reactive power management	Maintain voltage profile
Data reporting	Monthly reports to regulator, RLDC/SLDC

Performance Monitoring

Parameter	Target	Monitoring
System availability	98-99%	Monthly transmission availability declaration
Forced outages	<2%	Quarterly review
Planned outages	Coordinated with RLDC/SLDC	Annual maintenance schedule

11. Recent Regulatory Developments

Key Policy Changes

Development	Impact
Late Payment Surcharge	1.5% per month on delayed transmission charge payments
Transmission Planning (TP) Regulations, 2023	Enhanced planning, renewable integration focus
HVDC Technology	Preferred for long-distance, bulk power
Smart Grid initiatives	Digitalization, real-time monitoring

12. Compliance Checklist for Transmission Access

For Generators Seeking Connectivity

Apply to CTU/STU with project details, capacity, COD
Submit feasibility report, single-line diagram
Pay application fee and submit bank guarantee
Coordinate system study with CTU/STU
Execute Transmission Service Agreement (TSA)
Construct dedicated transmission line (if required)
Commission metering and SCADA systems
Comply with Grid Code for synchronization
Obtain final connectivity certificate
Pay monthly transmission charges post-COD

For Transmission Licensees

Obtain transmission license from CERC/SERC
Meet technical and financial eligibility criteria
Comply with Grid Code provisions
Install required metering and communication systems
File annual tariff petition with regulator
Achieve availability targets (>98%)
Report outages and system disturbances promptly
Maintain safety and environmental clearances
Undergo periodic audits by CEA/regulator

13. Dispute Resolution

Common Transmission Disputes

Issue	Forum	Typical Resolution
Tariff determination	CERC/SERC	Tariff order after public hearing
Connectivity denial	CERC/SERC adjudication	Mandamus if unjustified
Transmission charge sharing	CERC	Allocation formula applied
Delay in commissioning	CERC (deemed COD provisions)	Penalty on developer

14. Key Takeaways for Practitioners

CTU vs. STU Jurisdiction: Interstate = CERC/CTU; intrastate = SERC/STU—apply to correct authority.
TBCB is Cost-Efficient: Competitively bid transmission tariffs are typically 20-30% lower than cost-plus.
Long-Term Access is Critical: Apply for LTA 48 months before project COD to ensure evacuation.
Green Corridors Priority: Renewable projects benefit from dedicated transmission schemes.
Connectivity is Not Automatic: System study may reveal network inadequacy—factor augmentation time.
Transmission Charges are Recoverable: In PPA tariffs, transmission costs are pass-through to buyers.
Appeal to APTEL if Denied: Unjustified connectivity denial or excessive tariff can be challenged.

Conclusion

Transmission licensing and infrastructure are pivotal to India's electricity sector, enabling power flow from generation to consumption. The dual structure of CTU for interstate and STU for intrastate transmission, complemented by private licensees through TBCB, ensures grid robustness and investment efficiency. As renewable energy integration accelerates, transmission planning and Green Energy Corridors will be critical. Practitioners must navigate complex connectivity procedures, tariff regulations, and Grid Code compliance to facilitate seamless power evacuation and grid reliability.

Transmission Licensing: CTU, STU, and Private Licensees