The 285-kilometre power link, including submarine cables over a stretch of 50 km, will enable the two countries to trade their surplus power, thereby offering a cheaper option to bridge their power generation deficit and also manage their peak demand.
The transmission link will pave the way for future trading of electricity between the two countries.
Powergrid Corporation of India Ltd, the country's largest electricity transmission company and the implementing agency from the Indian side, hopes that a memorandum of understanding for developing the Rs 2,300-crore project would be signed with the Ceylon Electricity Board, the largest electricity company of Sri Lanka, shortly. "The work on the project should begin by February-March next year after the MoU is signed. It will take us two-and-a-half to three years to complete this project," said S K Chaturvedi, chairman and managing director of Powergrid.
The link will also help Sri Lanka reduce its use of expensive fuels and import cheaper power from India's surplus. For India, the link will help open up a new market for its projected surplus of power. India currently faces an over 12 per cent power deficit, with a peak demand of 109,000 Mw annually. The government hopes it can add at least 62,000 Mw of generation capacity in the current Five-Year Plan period, ending March 2012, with additional capacities being set up by private investors through captive and merchant power plants. This, along with the power from ultra mega power projects has fuelled hopes for tradable surplus.
The subsea line would initially have a capacity of 500 Mw, according to Powergrid's feasibility report. Later, the power flow could be ramped up to 1,000 Mw by 2016 when the power generation capacities in the two countries improve, with surplus availability especially in India's southern grid.
The proposed undersea transmission link could also be useful for transfer of electricity from the 500-Mw imported coal-based power project being planned to be set up by NTPC Ltd, India's largest power generator, at Trincomalee in Sri Lanka. The island nation currently has a capacity of 2,500 Mw.
Powergrid had carried out a feasibility study of the project last year and had found the installing of the transmission lines to be feasible. "We have already received an approval from the Ministry of External Affairs (MEA). Now a detailed project report will be prepared," said Chaturvedi. The Sri Lankan government had given its approval to the transnational power link in July last year.
Globally, transnational undersea power transmission lines have been laid so far only between the UK and France for transmission of 2,000 Mw of electricity. In addition, Philippines is also planning to set up similar transmission links currently to connect its islands through undersea electricity network.
Powergrid and the Ceylon Electricity Board will lay down cables under the Gulf of Mannar between Rameshwaram in Tamil Nadu and Talaimannar in Mannar islands in Sri Lanka.
On the Indian side, the cable will be connected to the southern grid in Madurai through an overhead transmission line. On the Sri Lankan side, the underwater cable will be linked to the country's power network at Anuradhapura through an overhead line, Chaturvedi informed.