Does grid curtailment challenge India’s renewable energy growth?

Out of the recently commissioned total renewable energy (RE) capacity of 54.8 GW, only 33% of power is being evacuated as of May 2026, and curtailment is highest during solar hours, ranging from 50-60% during the same period.

The curtailment is due to the unavailability of the transmission infrastructure while the sector is set to witness capex of Rs 5-6 trillion between 2026-27 and 2031-32, according to rating agency ICRA.

However, it cautioned that execution related challenges persist, especially related to land acquisition and right of way (RoW), which result in delays in the completion timelines of these projects. Further, these delays translate into grid curtailment-related issues for the RE developers, thereby impacting their returns.

“The projected transmission capex of Rs. 5-6 trillion entails strengthening of the existing infrastructure, adding evacuation capacities as well as new transmission routes to support the generation centres. Further, the upcoming capex will be driven by the Government’s plan to evacuate power from over 900 GW of non-fossil fuel capacity by 2035-36, out of which 548 GW is towards solar and wind capacity,” said Ankit Jain, Vice President and Co-Group Head, ICRA Limited.

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Increased capex

ICRA estimates that to reach close to the targeted level set by the Government in its earlier National Electricity Plan-II, the sector requires a significant upsize in the transmission line and sub-station capacity additions of about 20,000 circuit kilometres (ckm) and 120 gigavolt-amperes (GVA), respectively, on an annual basis. This entails an investment opportunity of at least Rs 5-6 trillion between 2026-27 and 2031-32 in the sector.

Outstanding orders and order inflows for key equipment suppliers to the transmission sector in 2025-26 have also more than doubled since 2021-22. A surge in transmission capex over the coming years is expected to lead to healthy order inflows for these players.

However, supply-side constraints stem from the limited capacity of equipment manufacturers and skilled manpower, constraining execution timelines, which could cause delays in transmission capacity additions unless these players scale up their capacities. Moreover, such a significant scale-up in capacity addition requires the need to address execution-related challenges, which the sector is facing.

Commenting on the execution challenges, Jain said: “Power transmission projects continue to face significant execution risks owing to challenges in acquiring land, ROW-related issues and regulatory approvals, leading to delays in timely implementation. Most transmission projects awarded by the central nodal agencies through the tariff-based competitive bidding (TBCB) route have been delayed beyond their scheduled commissioning date (SCOD) due to these challenges.”

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Project delays

Out of the total projects commissioned by March 2026 under this route, only 12% were done within the scheduled timeline, while the balance was commissioned with a lag of two months to three years, with a median delay of over 10 months. This delay in the transmission capacity addition impacts the risk of power evacuation for the RE players, resulting in curtailment-related episodes.

Since the last fiscal, in high RE penetration regions where transmission evacuation infrastructure build-out is yet to fully operationalise, the generators have faced significant capacity curtailment.

RE curtailment in the interstate transmission system (ISTS) network is largely driven by transmission constraints or inadequate temporary general network access (T-GNA) margins, resulting in non-scheduling of power.

Out of the recently commissioned total RE capacity of 54.8 GW, 33% is being evacuated under the T-GNA route at an all-India level as of May 2026. Further, the curtailment under TGNA is the highest during solar hours and has remained in the range of 50-60% during the same period.

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These instances are more prominent in Rajasthan and Gujarat, while curtailments in the southern region remain limited even in the solar hours. A large pipeline of projects of 107 GW across solar, wind, hybrid, hydro, pumped storage and thermal segments, which have already been granted connectivity, are planned to be integrated into the ISTS network between 2026-27 and 2030-31.

“As seen in the past, slippages in achieving timely commissioning of the upcoming transmission infrastructure cannot be ruled out, which could impact RE capacity additions or result in continued grid curtailment episodes for the RE players, materially impacting the return metrics of the RE projects,” concludes Jain.