Transmission Bottlenecks Threaten India’s Renewable Energy Goals

Context

Project viability and challenges to India’s clean energy targets are being impacted by the transmission bottlenecks in the power evacuation from renewable energy projects.

Key Highlights

• India has been one of the world’s fastest-growing markets for renewable energy with lofty objectives of 500 GW of non-fossil fuel capacity by 2030 and Net Zero by 2070. 
• But it’s being hit hard by a major hurdle—poor transmission infrastructure capacity—with solar and wind power growing at a rapid rate. 
• The slow pace at which grid connectivity is progressing is leading renewable energy developers to curtail electricity generation, impacting investments, project viability and India’s clean energy goals.

What is the Issue?

• Delays in the dedicated transmission infrastructure are causing delays for renewable energy, with approximately 21 GW in operation via Temporary General Network Access (T-GNA).
• Almost 12 GW of this is severely constrained with regard to the evacuation of power during peak solar production.
• Around 6,900 GWh of renewable energy capacity was unable to be transmitted due to transmission constraints during FY 25-26.
• A total of over 8,100 GWhs of solar power was curtailed in April-June FY27 to ensure grid stability.

Why are Transmission Bottlenecks Occurring?

• Renewable energy capacity is growing much faster than transmission networks.
• Sanctions against committing to the Inter-State Transmission System (ISTS) project.
• The congestion problem is created by the presence of a large number of solar parks in the two states of Rajasthan and Gujarat.
• Flexible and modern grids are required for renewable energy generation, which is intermittent.
• Land acquisition & regulatory clearance are slow, and this delays transmission projects.

Impact on Renewable Energy Sector

• Economic Impact

  • Power curtailment is a huge cost that developers incur.
  • Projects can become Non-Performing Assets (NPAs) due to high debt-servicing pressure.
  • Investor confidence is marred.
  • Internal Rate of Return (IRR) of projects declines substantially.

• Energy Security

  • As demand for electricity keeps growing, clean electricity is still not used.
  • Increase in thermal dependence remains.
  • The transition to clean energy in India slows down.

• Financial Sector

  • In total, the public sector lenders, including IREDA, REC, PFC, SIDBI, NaBFID and banks, have invested more than ₹5 lakh crore in renewable energy.
  • When developers are stressed, it raises the risk for lending institutions.

Government Initiatives

• Growth of Green Energy Corridor Project.
• General Network Access (GNA) transmission planning framework.
• Power Grid strengthening for the National Grid by Power Grid Corporation.
• Renewable Energy Zones and Ultra Mega Renewable Energy Parks.
• Rooftop solar distributed generation promotion scheme: PM Surya Ghar Yojana.

Challenges

• Delayed transmission infrastructure.
• High sun penetration during the hours of peak solar demand.Overloading the grid during high sun hours.
• Rising costs of renewable energy developers.
• Uncertainty in compensation for the curtailment due to transmission.
• Need for better coordination between renewable capacity addition and transmission planning.

Way Forward

• Coordinate development of renewable energy supply with transmission infrastructure.
• Fast-track Green Energy Corridor projects and inter-state transmission lines.
• Promote battery energy storage systems and pumped hydro storage.
• Improve smart grids and digital grid management technologies.
• Offer short-term financial assistance, restructure loans and relieve projects from obligations.
• Promote distributed renewable energy to lessen dependence on transmission.
• Enhance coordination between the Centre and State and expedite regulatory approval.

Conclusion

• Access to the transmission system is now the missing link in India’s renewable energy transition.
• Renewable energy is increasing fast, but lack of evacuation creates viability issues and investor confidence. 
• Expanding the transmission grid, implementing energy storage solutions and integrated planning with energy storage are key to ensuring that India’s clean energy goals become a reality of reliable, affordable electricity. 
• Solving these bottlenecks will be key to meeting sustainable economic growth, energy security and climate targets.

Source: The Indian Express

Mains PYQ

Q.“Access to affordable, reliable, sustainable and modern energy is the sine qua non to achieve Sustainable Development Goals (SDGs)”.Comment on the progress made in India in this regard. (2018)

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