transmission thermal capacity to be raised (because the heat generated by the lines can be dissipated more easily) and reduce the need to curtail wind power significantly (Schell et al, 2013). Synchronous condensers (SYNCON) provide another good example that can be useful to provide valuable reactive power (and inertia) that would normally be provided by conventional (mostly thermal) generation in a system, to enable a greater amount of (asynchronous) solar/wind generation to be integrated in the system. As Filatoff (2021) describes, two SYNCONs that have been installed in South Australia allowed nearly doubling the wind generation that could be accommodated in the system. An innovative approach that is now gaining popularity, including the World Bank’s Komati project in South Africa (Kwakwa, 2022), is to repurpose old coal-fired generators into SYNCONs at low cost to essentially retain the good part of the (ancillary) services that the coal plant used to provide.

Last but not the least, conventional transmission projects for grid strengthening can also contribute to greening of power systems that need to be recognized. More often than not, a typical economic analysis of transmission, including those conducted by the World Bank, looks at the first 10-15 years of an asset that typically lasts for 50-60 years, and yet there is significant concern about its net positive CO2 emissions over these early years. This is a wrong way of looking at it as energy transition will not happen over a decade or even two decades, and the lines in the early part of its life _will_ carry coal/gasbased power.

To assess if grid investments ‘should’ or ‘to what extent’ be attributable to Climate Finance (concessional type as such GCF, IDA PSW etc.), several criteria have been put forward in practice. These include the EU Taxonomy developed by the European Commission and the Common Principles approach developed by MDBs and DFIs. The EU considers transmission and network to be green only if two-thirds of the newly connected generation capacity has CO2 emissions intensity below 100g CO2e/kwh or if the average grid emissions factor is below 100g CO2e/kwh over a rolling five-year average period (Pye, 2021). This is a somewhat restrictive, narrow and myopic view and if a more forward-looking view on transmission and critical scale-efficient transmission projects cannot be inculcated, energy transition will almost inevitably get stuck mid-way. Common Principles on the other hand uses a non-binary forward looking approach where it gives partial climate credit to grid investment based on the share of the very low carbon electricity in the grid over a time horizon such as 10 years (Pye, 2021) unless the grid lines are solely dedicated for evacuating very low carbon electricity generation in which case the total investment is fully attributable to climate finance. Nonetheless based on a recent analysis presented in CoP26, it is estimated that less than 40% of the grid investments needed in EMDEs by 2030 would be climate finance attributable under the current eligibility criteria in use.

In summary, there are very useful transmission upgrades, new transmission line technologies, smart grid technologies that can support greening the transmission and should qualify as green investments that deserve concessional financing. Planners in ministries, regulatory bodies, transmission utilities, banks and MDBs – all need to consider adopting a more holistic systemwide view from a long-term perspective and develop a methodology. It is entirely possible that implementation of such a methodology will be fraught with difficulties to find model, data and capacity to undertake such analysis. Nevertheless, as the rest of this paper argues, a co-optimized generation and transmission planning framework can be put in place that captures the essential intrinsic merits of a wide variety of transmission projects including critical upgrades to the existing network.

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