Analyst Concall
Power Grid considers modifying Leh-Kaithal power line
This story was originally published at 19:35 IST on 4 November 2025
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--Power Grid: Plan to change power transmission system for Leh-Kaithal power line
--CONTEXT: Comments by Power Grid mgmt in post-earnings call with analysts
--Power Grid: Capex for Leh-Kaithal power line to go up by INR 100 bln
--Power Grid: Plan to commission Leh-Kaithal power line by 2029
--Power Grid: Planned FY26 capex at INR 280 bln, FY27 capex seen INR 350 bln
--Power Grid: Planned capex for FY28 at around INR 450 bln
By Avishek Rakshit and Afra Abubacker
KOLKATA/NEW DELHI – After receiving a lukewarm response from bidders for the Leh–Kaithal high-voltage direct current transmission line due to technical challenges, Power Grid Corp. of India Ltd. is planning to change the power transmission system of the line to alternating current, a move that could inflate costs substantially.
"We came out with the tender, and we also got one bid, but that bid was not acceptable to us because there were so many queries, and we came to a conclusion that the HVDC (high voltage direct current) project may not be feasible. Now, the government of India is considering this project to be replaced by AC (alternating current) project," R.K. Tyagi, chairman and managing director of Power Grid, told sector analysts in a post-earnings call.
Tyagi said the 400-kilovolt transmission line, spanning 480 km of rocky terrain, was initially estimated to cost INR 200 billion when conceived three years ago. However, over time, the company realised the cost could double to around INR 420 billion. Switching to an alternating current transmission system could bring the cost down to about INR 300 billion, he said. As a result, if the company goes ahead with the alternating current mode of transmission, which is most likely, then it will inflate the original estimated cost by INR 100 billion.
"Considering various challenges and the constraints shown by manufacturers or suppliers, it may not be possible for us to continue with HVDC. And we have already done detail studies. So, AC (alternating current) is another option, which we are considering, and the cost of AC (alternating current) will be close to INR 30,000 crores (INR 300 billion)," Tyagi said. The government, which has a majority shareholding in Power Grid, is yet to decide on the transmission method for this power line, Tyagi said, adding that the project will be completed by 2029.
The Leh-Kaithal HVDC project is a planned transmission line that will transmit power from a new renewable energy park at Leh in Ladakh to Kaithal in Haryana. The transmission line, which will pass through Himachal Pradesh and Punjab, is part of a broader initiative to evacuate power from large solar and wind projects in Ladakh. It aims to supply electricity into the national grid and provide a reliable power supply to Jammu and Kashmir.
The government considers the transmission line a strategic project due to the technical challenges of construction at altitudes exceeding 4,700 metres and its role in India's goal of increasing non-fossil fuel energy capacity.
Tyagi said that while the company faces land acquisition issues for any project, the government has directed Power Grid to adopt a market-rate valuation method, which is expected to offer land losers optimal compensation.
Under this policy, landowners and Power Grid will each appoint a land valuer while the district magistrate will appoint a third. If there is a difference of 20% or more between the valuations of the landowners' and the company's valuers, the district magistrate's valuer will determine the final compensation.
This method of land acquisition has been effective in Delhi and Haryana, and the power ministry is reaching out to all the states to suggest this method of land acquisition for Power Grid, Tyagi said. For the current financial year, Power Grid has set a capital expenditure target of INR 280 billion, which will go up to INR 350 billion in 2026-27 (Apr-Mar) and then to INR 450 billion in FY28, the top official said. On Tuesday, shares of Power Grid closed a little over 3% lower at INR 279.05 on the National Stock Exchange. End
Edited by Subhojit Sarkar
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