Overbuilding transmission: A case study and policy analysis of the Indian power sector

Policies to substantially increase the amount of renewable energy produced and electrify much of the trans-portation and industrial sectors to achieve greenhouse gas reduction goals envision an extensive expansion of the transmission system. One set of proposals calls for anticipatory transmission planning, namely, building trans-mission to regions with the potential to develop renewable energy resources before their actual development. This paper presents a case study of transmission expansion planning in India. Our study finds that it is possible to overbuild the transmission system even in a country that is rapidly developing thermal and renewable resources and has sizeable electricity load growth. Anticipatory transmission planning, high guaranteed returns and weak governance can result in transmission overbuilding. This cautionary finding motivates several recommended public policy reforms to reduce future overbuilds, while supporting economically efficient and environmentally sound transmission development.