India’s largest power network company, Power Grid Corporation of India (POWERGRID), has emerged as the successful bidder for a significant interstate transmission system (ISTS) project involving high voltage direct current (HVDC) technology. POWERGRID has received the letter of intent (LoI) from REC Power Development & Consultancy Ltd (RECPDCL), a wholly owned subsidiary of Indian REC Limited, to acquire Khavda V-A Power Transmission Limited, a project-specific special purpose vehicle (SPV). The SPV is responsible for implementing the ‘Evacuation of power from a potential renewable energy zone (REZ) in Khavda area of Gujarat under Phase-V (8 GW): Part A’, on a build, own, operate, and transfer (BOOT) basis. POWERGRID secured the project through the tariff-based competitive bidding (TBCB) process, with RECPDCL as the bid process coordinator (BPC).

The project entails establishing two 6,000 MW, ±800 kV HVDC line commuted converter (LCC) terminal stations (4×1,500 MW)—Khavda Pooling Station 2 (KPS2) in Gujarat and another in Nagpur in Maharashtra—along with the 1,200 km, ±800 kV KPS2–Nagpur HVDC Bipole line (Hexa lapwing). The cost of the project is estimated at INR250 billion, which is the highest value ISTS-TBCB project so far.

This marks POWERGRID’s first HVDC-based ISTS-TBCB scheme in fiscal year 2024-25 (FY25). Though it emerged as the lowest bidder for the Rajasthan Part I HVDC project in August 2024, the project is up for rebidding.

The bidding process for the Khavda V-A project, which began in November 2023, got prolonged due to the extensive deliberations over the technical parameters, the minimum local content (MLC) clause, and implementation timelines. Following feedback from developers and HVDC equipment suppliers, the Ministry of Power (MoP) in July 2024, agreed to reduce the MLC in the HVDC terminal stations to 25 per cent from 60 per cent originally.

Bipole-I of the project is expected to be commissioned within 48 months, followed by Bipole-II six months later.

Notably, the Khavda V Part A scheme is part of an overall scheme (Phase V) that has four components – Part A, Part A1, Part B and Part C. Of these, Part A1 is a small INR210 million project that has been assigned to POWERGRID under the regulated tariff mechanism (RTM) route. Part B is still under evaluation; and Part C, estimated to cost INR120 billion and envisaging 500 kV HVDC technology, is in the early stages of bidding by BPC PFC Consulting Limited (PFCCL).

In a separate development, on October 24, 2024, POWERGRID raised INR50 billion through 10-year infrastructure bonds at 7.12 per cent coupon rate. The base issue size was INR10 billion, with a green shoe option for an additional INR40 billion. These unsecured, non-convertible, non-cumulative, and taxable bonds will be redeemable at par after 10 years, with interest paid annually. This follows POWERGRID’s Committee of Directors approval for the issuance of bonds, its LXXIX or 79th bond series (2024-25) through private placement.

(INR1=USD0.012)