Adani Electricity Mumbai Limited-Transmission (AEML-T) and Adani Electricity Mumbai Infra Ltd (AEMIL) have filed a joint Application for grant of Transmission Licence in the name of AEMIL before the Maharashtra Electricity Regulatory Commission. The petition seeks grant of licence to AEMIL for developing a 1000 MW (VSC based) HVDC line between MSETCLs Kudus sub-station and AEML’s Aarey sub-station. While the line might contribute to increase the import capacity and reliability of Mumbai transmission network, it is not clear if this is the most cost-optimal way to address the challenge. The proposed capital cost for this project is about INR 6,700 crores. This single scheme alone could result in an approximate Rs. 0.50/unit tariff increase (or 8% tariff increase) for all consumers in Mumbai annually.

As the scheme is proposed as a cost-plus scheme with uncertainty with respect to procurement of land and obtaining clearances there is a significant possibility of time and cost overruns as well. Given the cost impact and the urgent need to strengthen Mumbai's transmission network, it is vital that the Commission:

•  Reject the petition for grant of licence to AEMIL
• Constitute a technical committee to assess potential alternatives to strengthening Mumbai’s transmission network including applications of energy storage
• Direct STU to consider creating an SPV to facilitate RoW, clearances and land acquisition for the most cost-optimal and viable project to meet Mumbai’s constraints.
• Direct STU to initiate competitive bidding for the purpose of schemes to ease Mumbai’s transmission constraint.