POWERGRID INSURANCE POLICY

Statutory Requirement of Insurance

Transmission Service Agreement
As per clause 9 - The TSP shall effect and maintain or cause to be effected and maintained during the Construction Period
and the Operating Period, adequate Insurances against such risks, with such deductibles including but not limited to any
third party liability and endorsements and co -beneficiary/insured, as may be necessary under -
a. any of the Financing Agreements,
b. the Laws, and
c. in accordance with Prudent Utility Practices.

The Insurances shall be taken effective from a date prior to the date of the Financial Closure till the Expiry Date.

CERC Regulation
As per Notification No. L-7/165(180)/2008-CERC New Delhi, dated 26th May 2009, CHAPTER – V -- TERMS AND CONDITIONS
OF LICENCE
The licensee shall, during the validity of the licence, maintain insurance in accordance with prudent utility practices or as
may be necessary under-
(a) any of the agreements; and
(b) the laws in force in India:

Provided that the licensee may opt for self-insurance.

Statutory Requirement of Insurance
SEBI Requirement
As per THE GAZETTE OF INDIA EXTRAORDINARY PART – III – SECTION 4 PUBLISHED BY AUTHORITY NEW DELHI, SEPTEMBER 26,
2014 SECURITIES AND EXCHANGE BOARD OF INDIA NOTIFICATION –

Rights and responsibilities of investment manager –

- The investment manager shall arrange for adequate insurance coverage for the assets of the InvIT:
Provided that this shall not apply in case the assets are required to be insured by any other person under any agreement including a
concession agreement or under any Act or regulations or circulars or guidelines of any concessioning authority or government or local body:
Provided further that in case of assets held by 63[holdco or]SPV, the investment manager shall ensure that assets held by the 64[holdco or]
SPV are adequately insured
POWERGRID ASSETS BASE

POWERGRID and its subsidiary has the following assets base and Self Insurance
Reserve- (As at 31.12.2021) Rs. in Cr.
Name of Company Gross block of Gross block of Total Self Insurance Balance Self
Transmission Line Substation Reserve Created Insurance Reserve
after utilisation

POWERRGRID 144,327.57 89,315.90 1997.90 950.72

TBCB Subsidiary 9667.14 2351.11 20.22 20.22

(Operational Company)
EXISTING POLICY

POWERGRID including its subsidiary currently following up Self Insurance Policy

(SIS) –

- 0.12% of Original Gross Block of Property, Plant and Equipment and value of inventory except ROU (except HVDC
substation)
- Such SIS is being utilized for failure in Transmission Line and AC substations
- Also SIS is also being utilized for the purpose of strengthening works and preventive maintenance

POWERGRID has taken cover from Insurance Companies for its HVDC
Substations
EXISTING POLICY – Risk Coverage

POWERGRID’s Self Insurance Policy (SIS) covers the following areas –

- Failure in Transmission Line and AC substations

- Strengthening work
- Diversion of line due to natural calamities such as change in river course, flash flood, hill slide etc.
- 75% of estimated claim amount can be claimed in advance and remaining on actual basis.

Existing policy helps in Preventive maintenance to avoid loss of availability

(revenue) and damage to system
EXISTING POLICY (SIS) – Utilization status
Rs. in Cr.
Particulars POWERGRID - Amount TBCB Subsidiary – Amount
Total Self Insurance as on 31.12.2021 1997.90 20.22

Utilisation from 2017-18 to up to date

Towards Claim admissible as per Insurance policy
- Transmission Line
180.55 0.00
- Substation 125.24 0.00
Total 305.79 0.00
As % of total utilization 29.20% 0.00%
Towards Claim not admissible as per Insurance policy
- Transmission Line – Strengthening 343.68 0.00
- Procurement of spares 397.71 0.00
Total 741.39 0.00
As % of total utilization 70.80% 0.00%

Total utilization till date 1,047.18 0.00

Utilization % of Total Self Insurance created 52.41% 0.00%

Balance after utilisation 950.72 20.22

% of claim – 0.018% of Gross Block (0.12*52.41%*29.20%)

EXISTING POLICY (SIS) – Utilization status
Rs. in Cr.
Particulars 2017-18 2018-19 2019-20 2020-21 2021-22 Total

Substation 5.24 39.07 94.08 6.15 19.74 164.28

Transmission Line 4.38 62.85 73.82 74.57 0.46 216.08
Transmission Line – Strengthening 168.97 174.71 0.00 343.68
Procurement of spares 158.24 100.62 64.28 323.14

Total 167.86 101.92 336.87 356.05 84.48 1,047.18

Substation
Min claim amount 5.24 0.03 0.71 1.71 0.59
Average claim amount 5.24 19.54 5.88 3.08 4.94
Max claim amount 5.24 39.04 17.39 4.44 9.76

Transmission Line
Min claim amount 0.32 0.10 0.47 0.27 0.14
Average claim amount 1.09 7.86 4.61 5.33 0.23
Max claim amount 2.61 23.68 30.25 51.08 0.32
Competitor Analysis

Adani Transmission Limited

- Substation – 3rd Party Insurance (All risk coverage)
- Transmission Line – Self Insurance at Holding company level

SEUPPTCL
- Industrial All Risks Policy (Different policy for Substation and Transmission Line)
- Cost of Insurance is ~0.10% of Gross block

Data of seupptcl
Our Understanding

- Risk profiles of Transmission line and Substation are different and separate
policy for these assets are beneficial.
- Deductibles for Business interruption has no meaning for transmission business
as it is expected to be restored at the earliest, being an essential service.
- Adequate insurance do not indicate to cover all risks but risks that are more
appropriate to the nature of business.
- An intermediary / broker may be appointed expecting that it will result in
optimum insurance cover with lower premium and ease of claim settlement.
- There may be a case for preventive expenditure to get covered under insurance,
like river changing its course may require strengthening of tower before the
accident happens.
- Immediate replacement costs to be covered for restoration including
transportation, hire charges, manpower and professional charges . Hire charges
may extend for 1-2 years to get the original equipment refurbished.
Risk assessment based on previous claims out of reserve

Past incidences with type of risk and amount year wise from 2017-18 ( to be
provided by AM) S/S and T/l Separate

In terms of Loss limit for T/l And Substation : ( to be provided by AM)

IMPACT ON REVENUE DUE TO OUTAGE OF ONE DAY (24 HOURS)

ELEMENT NAME
IMPACT ON REVENUE

400 kV 125 MVAr Reactor Rs. 2.4 Lacs

400 kV ICT (500 MVA) Rs. 2.4 Lacs
765 kV/400 kV Quad (100 kM) Rs. 3.9 Lacs
765 kV 240 MVAr Reactor Rs. 4.5 Lacs
765 kV Hexa (100 kM) Rs. 5.9 Lacs
765 kV ICT (1500 MVA) Rs. 7.2 Lacs
HVDC Bipole or BtB (500 MW) Rs. 33.46 Lacs
For perspective…
• 6000 MW Agra-BNC HVDC : Rs. 4.01 Cr
• 1000 MW Talcher-Kolar-I HVDC : Rs. 0.67 Cr
• 1000 MW Bhadrawati HVDC (Back to back) : Rs. 0.67 Cr
• 765 kV Dharamjaygarh-Jabalpur –I (Hexa, 425 ckM) : Rs. 0.24 Cr
*Above figures are tentative.
Details of assets initially planned to offer to external Insurance

- Details of substation assets are as under -

Name of TBCB SPV Powergrid Mithilanchal Powergrid Southern Powergrid Medinipur Jeerat Powergrid Khetri Powergrid Ajmer Powergrid Powergrid Total
Transmission Limited Interconnector Transmission Limited Transmission System Phagi Transmission Fatehgarh Jawaharpur
Transmission System Limited Limited Transmission Firozabad
Limited Limited Transmission
Limited

Element detail 1. Establishment of 1. Establishment of 1. Establishment of 1. Establishment of Bay Extension at Bay Exten at 400/220/132 kV
400/220/132 kV, 2x500 MVA + 765/400 kV substation at 765/400kV, 2×1500MVA 765/400kV, 2X1500 Ajmer and Phagi Fatehgarh and (AIS) substation
2x200 MVA S/s at Sitamarhi Chilakaluripeta substation at Medinipur MVA S/s at Khetri (Rajasthan) Bhadla (Rajasthan) at Firozabad
(New) (Andhra Pradesh) 2. Establishment of 2. 400 KV Bay Extn at
2. Establishment of 400/220/132 2. Satenapalli 765/400kV, 2x1500MVA Sikar
kV, 2x500 MVA + 2x200 MVA S/s (Narasaraopeta) 400 kV substations at Jeerat (New) 3. 765 KV Bay
at Sitamarhi (New) Substation extension 3. extension at Jhatikara
3. Establishment of 400/220/132 3. Garividi 400 kV
kV, 2x500 MVA + 2x200 MVA S/s Substation extension
at Saharsa (New)
4. Substation extension at
Darbhanga S/S.
5. Substation extension at
Motihari S/s

Equipment 513.63 376.42 718.70 254.21 114.98 60.56 114.46

2,152.97
Equipment's below value of 50 42.07 30.83 58.87 20.82 9.42 4.96 9.38
lakh (Included in above value) 176.34
Spares 7.58 5.55 10.60 3.75 1.70 0.89 1.69
31.76
Cables 12.86 9.42 17.99 6.36 2.88 1.52 2.86
53.88
Building /Civil 66.93 49.05 93.66 33.13 14.98 7.89 14.92
280.57
                 
 Total
601.00 440.45 840.95 297.45 134.54 70.86 133.93 2,519.18
Details of assets initially planned to offer to external Insurance

- Details of Transmission Line are as under – (Details of wind zone attached as Annexure A)
Total
Description of Transmission Line Voltage Circuits From (Place) To (Place) Line Length Number of River Date of
(Route length) Towers
(km) (Approx.) crossings Operation

PVTSL                
765kV D/C Vindhyachal-Varanasi lIne 765 2 Vindhyachal Varanasi 189.5 521 3 Aug-21
                 
PKTSL                
Khetri – Sikar (PG) 400kV D/c line (AL59) 400 2 Khetri Sikar(PG) 78.083 207   Oct-21
Khetri– Jhatikara 765kV D/c line 765 2 Khetri Jhatikara 146.022 395   Oct-21
                 
PAPTL                
Ajmer (PG) – Phagi (RVPN) 765kV D/C line 765 2 Ajmer(PG) Phagi (RVPN) 134.207 359   May-21
                 
PFTL                
Fatehgarh-II – Bhadla-II 765kV D/c line. 765 2 Fatehgarh-II Bhadla-II 187.346 508   Aug-21
                 
PMTL                
Darbhanga – Sitamarhi (New) 400kV D/c line with Triple 400 2 Darbhanga Sitamarhi 80 221 2 Apr-21
Snowbird conductor
Sitamarhi (New) – Motihari 400kV D/c line with Triple
400 2 Sitamarhi Motihari 85.6 230   Apr-21
Snowbird conductor
2 Nabinagar Chandauti 1.45 5   Mar-21
LILO of both circuits of Nabinagar-II – Gaya 400kV D/c 400
(Quad Moose) line of PGCIL at Chandauti (New) 2 Gaya Chandauti 1.45 4   Mar-21

LILO of Kishanganj – Patna 400kV D/c (Quad Moose) 2 Kishanganj Saharsa 37.35 106  
400 Oct-21
line of PGCIL at Saharsa (New) 2 Patna Saharsa 37.35 105  
Details of assets initially planned to offer to external Insurance

- Details of Transmission Line are as under – (Details of wind zone attached as Annexure A)

Total
Description of Transmission Line Voltage Circuits From (Place) To (Place) Line Length Number of
(Route length) Towers River Date of
(km) (Approx.) crossings Operation

Ranchi (New) – Medinipur 765kV D/c line 765 2 Ranchi Medinipur 269 718  
Feb-21
Medinipur - Jeerat (New) 765kV D/c 765 2 Medinipur Jeerat 169 461   Sep-21
Jeerat (New) – Subhasgram 400kV D/c 400 2 Jeerat Subhasgram 107 312    
Jeerat
Jeerat (New) – Jeerat (WBSETCL) 400kV D/c 400 2 Jeerat 25.58 81  
(WBSETCL) Sep-21
LILO of both circuits of Chandithala – Kharagpur 400kV 2 Chandithala Medinipur 37 100  
D/c line at Medinipur 400 Feb-21
2 Kharagpur Medinipur 37 99  

LILO of Jeerat (WBSETCL) – Subhasgram (PG) 400kV S/c

section at Rajarhat (POWERGRID) 400 2     0 0  
 
                 
PSITSL                

Vemagiri-II – Chilakaluripeta 765kV D/c line 400 2 Vemagiri-II Chilakaluripeta 279 748 9
Jan-20

Chilakaluripeta – Cuddapah 765kV D/c line 400 2 Chilakaluripeta Cuddapah 288 768 1
Jul-19

Chilakaluripeta – Narsaraopeta 400kV (quad) D/c line 400 2 Chilakaluripeta Narsaraopeta 30 81  

Jul-19
Cuddapah – Madhugiri 400kV (quad) D/c 400 2 Cuddapah Madhugiri 243 650  
Feb-19
Srikakulam Pooling Station – Garividi 400 kV 400 2 Srikakulam Garividi 144 393  
Aug-18
Details of assets initially planned to offer to external Insurance
- Details of Transmission Line are as under – (Details of wind zone attached as Annexure A)

Total

Description of Transmission Line Voltage Circuits From (Place) To (Place) Line Length Number of
(Route length) Towers River Date of
crossings Operation
(km) (Approx.)

Mainpuri &
LlLO of 765 kV Mainpuri - Gr. Noida SC line at Jawaharpur TPS 765 2 Gr. Noida Jawaharpur 22.3 66  
Jan-21
LILO of 1 circuit of 400 kV Agra South - Fatehabad (765kV) DC line at Agra South
400 2 Firozabad 12.9 47   Feb-21
400 kV Firozabad & Fatehbad

LILO of 220kV Firozabad (220kV) - Agra (765kV PG) line at 400kV Firozabad (220kV)
220 2 Firozabad 10.84 38   Feb-21
Firozabad & Agra

132 kV Firozabad (400kV)- Narkhi DC line 132 2 Firozabad Narkhi 27.65 94   Feb-21
Etmadpur
LILO of 132 kV Etmadpur - Barhan SC line at 400kV Firozabad 132 2 & Barhan Firozabad 25.1 101   Feb-21

Jawaharpur TPS-Firozabad 400 kV DC Quad line 400 2 Jawaharpur Firozabad 70.5 204   Feb-21

                 
PUTL                
Unchahar – Fatehpur 400 kV D/C line 400 2 Unchahar Fatehpur 53 145   Dec-16
                 
PNMTL                
Nagapattinam Pooling Station-Salem 765 kV D/C line 765 2 Nagapattinam PS Salem 203 543   Oct-16
Salem - Madhugiri 765 kV S/C line 765 1 Salem Madhugiri 219 575   Jan-19
Expectation from Brokers

Quotation for Insurance coverage

- Area of risk to be covered with adequate coverage
- Expected Insurance charges in line with existing utilization 0.018% of SIS
- Best industry / market practices to offer to company
End to end advisory on Insurance service
- From selection of Insurance company to Claim settlement (in case of any event)
Specifics:
- Whether reinsurance market is matured enough and competitive to get a good
quote for high voltage transmission lines – domestic and international
- Insurance brokerage do not add to cost but helps in identifying optimum mix of
risks and reduces premium.
- Solution to suggest ways to reduce the premium with adequate coverage of risks for
the nature of business
Expectation from Brokers

Specifics:
- Solution suggested should comply with IRDAI and other statutory requirements
for adequate risk coverage.
- Solution suggested should not enhance the risk or should not lead to under
insurance or create complications in claim settlement.
- Un insured risks and its percentage allowed to cover in self insurance reserve
by utility
- Whether a single broker is to be selected or a panel of brokers so that
selection of broker based on combination of broker rating and solution
offered.
- copies of latest PSU Insurance policies for which you are broker may be
submitted.
Thank You
Risk assessment based on previous claims out of reserve
Past incidences with type of risk and amount year wise from 2017-18 ( to be provided by
AM) S/S and T/l Separate

Maximum loss in Transmission lines:

2020-21 (13 Nos – 73.7 Cr) – Max 5.78 Cr (Excl Pile foundations required collapses) – [3nos Flash Flood, 10nos – Wind]
2019-20 (20 Nos – 67.94 Cr) – 5.26 Cr [2nos – Cyclone, 18nos Wind]
2018-19 (6 nos – 62.85 Cr) – 2.34 Cr [ 1no – Landslide, 5nos – Wind]
Maximum loss in SubStations:
2020-21 (3 Nos – 6.15 Cr) – 3.47 Cr (Restoration of 50 MVAR LR at Balipara (75%)
2019-20 (16 Nos-94.08 Cr) – 8.83 Cr (Restoration of failed ICT at Raigarh (Adjustment of 75 % amount )
Maximum loss in GIS:
2020-21 – Nil
2019-20 (1no) – 6.01 Cr (Restoration of B3 GIS module at Maharanibagh)
2018-19 – NIL

In terms of Loss limit for ( to be provided by AM) – DRAFT VALUES

T/l – 5.78 Cr
Substation : 11.77 Cr
GIS : 6 Cr
Asset Management Philosophy

Deploying assets

Management
Asset Operating assets

Maintaining assets In a cost

effective way

Replacing assets

Upgrading assets
Major innovations in Asset Deployment

Transmission Lines Substations

Innovation in
GIS Substations
Tower Designs

Process Bus
HTLS Conductors
(Digital Substations)

Polymer Insulators
RIP Bushings
in Coastal Areas

Ester and GTL in

transformers
 Major Technological Innovations in
23

O&M of Assets

Transmission Lines Substations

Latest diagnostic tests

Aerial Patrolling of
like FRA, FDS, THRC,
Transmission Lines
DCRM etc.

Insulated Bucket
Asset Health Indexing
Trucks

Use of Controlled
Use of TLAs
Switching Devices
Improvements in Maintenance Philosophy

7 Financial optimization
Proactive,
predictive 6 Reliability centered

5 Predictive

4 Condition-based

3 Usage-based

2 Time-based

1 Run to failure Value, savings

Innovations in Transmission Line Maintenance Practices
Use of GPS Enabled
App
Ground
Use of High Resolution
Camera

Maintenance
Patrolling
Philosophy
Use of Helicopter

Aerial
Use of Drone

GIS Mapping
Innovation in Substation Maintenance Practices
Transformers &
Reactors
Condition
Monitoring Switchyard
Equipments

Maintenan GIS equipments

ce NTAMC
Asset
Philosoph
Maintenance
y
Asset Health Transformer &
Indexing Reactors

Condition Monitoring Tests are carried out as part of Annual Maintenance

Plan (AMP) for all major assets
27 IMPACT: Improved Availability and Lower
Trippings

High Availability Low Tripping per line

99.81 99.82 99.78 99.82

99.71 0.6

0.46
0.39
0.36
0.28

2017-18 2018-19 2019-20 2020-21 2021-22 (till Q3) 2017-18 2018-19 2019-20 2020-21 2021-22 (till Q3)
IMPACT: Reduced Failure Rate of Transformers
& Reactors
POWERGRID Failure Rate Global Failure Rate
Failure Rate

Use of Naphthenic oil & 1%

Inhibitors introduced
RIP bushings
introduced 0.7%
FDS
introduced RLA Studies done

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Continuous improvement in Failure rate due to

adoption of Best O&M practices
 IMPACT: Reduced Incidents of Tower Failures
Financial Year Tower population (Nos.) % tower collapse rate w.r.t. tower
population

2021-22* 285000 0.0018%

2020-21 277000 0.005%
2019-20 269000 0.009%
2018-19 256000 0.015%
2017-18 247000 0.008%
IMPACT: Reduced Failures of GIS assets
IMPACT: Reduced Failures of AIS assets

AIS Sub Station Failure Rate (in %)

1.00% 0.95% 0.95%
0.90% 0.87%

0.80%
0.70%
0.70%
0.63% 0.62%
0.60%
0.50%
0.50%
0.42% 0.43% 0.44%
0.40%
0.40%
0.33%
0.30%

0.20%

0.10%

0.00%
2018-19 2019-20 2020-21

CB CT CVT SA