The first interconnection of regional grids was established in October 1991 when the North Eastern and Eastern grids were interconnected. The Western Grid was interconnected with the aforementioned grids in March 2003. The Northern grid was also interconnected in August 2006, forming a Central Grid synchronously connected operating at one frequency. The sole remaining regional grid, the Southern Grid, was synchronously interconnected to the Central Grid on 31 December 2013 with the commissioning of the 765 kV Raichur-Solapur transmission line, thereby establishing the National Grid.
By the end of calendar year 2015, despite poor hydro electricity generation, India had become a power surplus nation with huge electric power generation capacity idling for want of power demand.The calendar year 2016 started with steep fall in the international price of energy commodities such as coal, diesel oil, naphtha, bunker fuel and LNG which are used in electricity generation in India.
Earlier many of the power stations which are using fuels other than coal were unable to operate due to high cost of LNG and petro products. This situation has changed due to glut in petroleum products globally. The prices are falling to such an extent that these fuels have become cheaper to give competition for pit head coal based power generators. Many of the stranded gas and liquid fuel based power
stations would be competing with indigenous coal based power stations in an electricity market where demand growth is not encouraging. All the segments of the electricity sector such as fuel suppliers, fuel transporters (railways, harbours, pipelines, etc.), electricity generators, electricity transmission companies and distribution companies would be facing severe competition to cut down the prices and improve their operating efficiency in a final consumer dictated market. Due to tepid growth in electricity consumption, coal stocks are continuously building up at power stations as well as coal mines