{"id":901630,"date":"2026-04-26T02:49:37","date_gmt":"2026-04-26T07:49:37","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2026\/04\/26\/grid-consolidation-gathers-pace-amid-indias-renewable-energy-surge\/"},"modified":"2026-04-26T02:49:37","modified_gmt":"2026-04-26T07:49:37","slug":"grid-consolidation-gathers-pace-amid-indias-renewable-energy-surge","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2026\/04\/26\/grid-consolidation-gathers-pace-amid-indias-renewable-energy-surge\/","title":{"rendered":"Grid consolidation gathers pace\u00a0amid\u00a0India\u2019s renewable\u00a0energy\u00a0surge"},"content":{"rendered":"
\n

\u201cThere is currently a crunch in grid capacity available, particularly on the national grid. Many projects that were to be connected at the national grid level are getting delayed.\u201d\u00a0<\/p>\n

A recent\u00a0Ember report<\/a>\u00a0illustrates the challenge: as non-fossil fuel sources reached around 50% of installed capacity\u00a0last year, 2.3TWh of solar was curtailed between May and December\u00a0due to weak daytime demand, forecasting errors\u00a0and limited coal fleet flexibility, with\u00a0nearly 0.9TWh lost in October alone.\u00a0<\/p>\n

Furthermore,\u00a0state-level disparities add further complexity. The third edition of the\u00a0Indian States\u2019 Electricity Transition (SET) report<\/a> by Ember and\u00a0the Institute for Energy Economics and Financial Analysis (IEEFA)\u00a0highlights that while certain states such as Karnataka, Delhi\u00a0and Andhra Pradesh lead in decarbonisation, market readiness\u00a0and ecosystem performance, other regions lag due to differences in infrastructure, fiscal capacity\u00a0and institutional maturity.\u00a0<\/p>\n

Together, these findings emphasise that grid constraints\u2014both technical and structural\u2014are\u00a0emerging\u00a0as the defining challenge for India\u2019s transition, and targeted interventions will be critical to sustaining the country\u2019s renewable growth trajectory towards 2030.\u00a0<\/p>\n

Transmission bottlenecks\u00a0emerge\u00a0as key constraint\u00a0<\/h2>\n

Transmission infrastructure\u00a0remains\u00a0one of the most significant near-term challenges\u00a0in India.\u00a0<\/p>\n

\u201cThe issue is\u00a0very simple,\u201d\u00a0Rustagi\u00a0says.\u00a0\u201cAll these new projects or capacity that is coming up need to be connected to the grid, and the capacity of the grid is finite. The grid is extremely expensive, so capacity\u00a0must\u00a0be added at the same time as new renewable projects are created, and that is where the issue lies.\u201d\u00a0<\/p>\n

The issue is structural. Renewable capacity can only be deployed at scale if it is matched by grid expansion, yet transmission projects are capital-intensive and time-consuming.\u00a0<\/p>\n

\u201cThe problem is that expanding grid capacity is heavily capital-intensive, and it also requires a lot of time. These large transmission projects cover thousands of kilometres, require right of way and in many cases go over\u00a0very challenging\u00a0terrains,\u201d Rustagi explains.\u00a0<\/p>\n

\u201cIt is not surprising that many of these projects get delayed. They also need\u00a0government approvals, as they often pass through sensitive habitats such as forests, industrial\u00a0areas\u00a0and densely populated regions.\u201d\u00a0<\/p>\n

This combination of logistical,\u00a0regulatory\u00a0and environmental constraints has led to delays, with grid expansion struggling to keep pace with renewable deployment, even beyond India. Rustagi highlights that transmission bottlenecks are a global issue, affecting markets across the US,\u00a0Europe\u00a0and Africa.\u00a0<\/p>\n

\u201cThis issue of limited transmission capacity and the long timelines required to address it is a global challenge,\u201d he says. \u201cIn the Western world, timelines are around five years or more, whereas in India, projects are typically completed in three to four years.\u201d\u00a0<\/p>\n

However, even with\u00a0relatively faster\u00a0execution, India faces\u00a0additional\u00a0pressures as it balances infrastructure expansion with social considerations.\u00a0<\/p>\n

\u201cThis issue has become slightly more challenging in recent times because, alongside the push to expand transmission capacity, there is also a greater emphasis on protecting the rights of farmers and communities\u00a0located\u00a0beneath these lines,\u201d Rustagi adds.\u00a0\u00a0<\/p>\n

\u201cAs a result, approval requirements have become more stringent. For example, compensation for farmers and private landowners has increased, leading to higher project costs and extended timelines.\u201d\u00a0<\/p>\n

Despite these hurdles, he views the current constraints as temporary. \u201cMany of these projects are expected to be completed by 2028, which will open the door to substantial expansion.\u201d\u00a0<\/p>\n

Distributed energy\u00a0can ease\u00a0grid pressure\u00a0<\/h2>\n

As centralised grid infrastructure struggles to keep pace, decentralised energy systems are playing a growing role in absorbing capacity.\u00a0<\/p>\n

\u201cDecentralised ownership models are already helping to absorb the volume of capacity coming into India,\u201d Rustagi says, pointing to rooftop solar as a key example.\u00a0<\/p>\n

Rooftop installations have surged from around 3GW annually until 2024 to approximately 8GW in 2025, with expectations of 12-15GW this year.\u00a0<\/p>\n

\u201cWhat this is doing is enabling more solar capacity without necessitating expansion at the grid evacuation level,\u201d he explains.\u00a0<\/p>\n

In parallel, policy reforms are enabling peer-to-peer (P2P) power trading and encouraging projects to connect at the state grid level, where\u00a0capacity\u00a0remains\u00a0available.\u00a0<\/p>\n

\u201cIn addition, instead of focusing solely on the national grid, there are increasing efforts to promote connections at the state grid level, where there is still significant available capacity depending on location. As a result, more state grid-connected projects are expected to come online over the next few years.\u201d\u00a0<\/p>\n

Manufacturing landscape\u00a0reshaping grid consolidation\u00a0<\/h2>\n

The rapid evolution of India\u2019s solar manufacturing sector is driving consolidation. Rustagi expects smaller manufacturers to struggle as capital intensity and technological requirements increase.\u00a0<\/p>\n

\u201cThis is becoming a sector which requires significant capital expenditure and ongoing investment in new technologies,\u201d he says.\u00a0\u201cThe manufacturing\u00a0business is likely to become more\u00a0consolidated, with a clearer emergence of tier one, tier\u00a0two\u00a0and tier three players.\u00a0<\/p>\n

\u201cTier one players, for example, would be companies with more than 10GW of capacity and fully backward-integrated operations. The immediate impact will therefore be on the manufacturing value chain, with many smaller players being squeezed out.\u201d\u00a0<\/p>\n

With an estimated 120-150 module manufacturers currently\u00a0operating\u00a0in India, the market is likely to\u00a0consolidate\u00a0into tiered players,\u00a0with large, fully integrated companies\u00a0emerging\u00a0as dominant suppliers.\u00a0\u00a0<\/p>\n

While the shift is primarily upstream, it has implications for the broader ecosystem, particularly in improving supply chain reliability, price\u00a0stability\u00a0and project execution\u00a0timelines\u2014factors that are critical for grid project connectivity.\u00a0<\/p>\n

For downstream developers and installers, however, this shift is\u00a0largely positive. A domestic supply chain is expected to stabilise pricing and improve availability.\u00a0<\/p>\n

\u201cWith a fully domestic supply chain, prices should stabilise, availability should become more predictable, and the technology landscape should become clearer going forward. As a result, access to modules and pricing will improve in terms of predictability, which is\u00a0ultimately positive\u00a0for these players,\u201d Rustagi adds.\u00a0<\/p>\n

Distribution reforms gain momentum\u00a0<\/h2>\n

While transmission\u00a0remains\u00a0a bottleneck,\u00a0significant progress\u00a0is being made at the distribution level. Government-led reforms\u2014including smart metering and financial incentives for rooftop solar\u2014and stricter financial discipline for\u00a0distribution companies\u00a0(DISCOMs) are\u00a0beginning to yield results.\u00a0<\/p>\n

\u201cDISCOMs have also been given incentives,\u201d Rustagi says. \u201cFor instance, in the rooftop solar scheme and the\u00a0strong growth\u00a0seen in that segment, distribution companies are financially incentivised to support installations. Every time a rooftop solar system is installed, the DISCOM receives a small financial incentive.\u201d\u00a0<\/p>\n

After\u00a0years of heavy losses, India\u2019s distribution sector has\u00a0reportedly returned\u00a0to profitability at an aggregate level, reflecting the impact of policy interventions and capital injections.\u00a0\u00a0<\/p>\n

Under the 15th<\/sup>\u00a0Finance Commission framework, states must limit fiscal deficit to 3% of gross state domestic product, with an\u00a0additional\u00a00.5% allowance tied to power sector reforms. However, in FY2025 the combined fiscal deficit of states stood at 3.2%, with 11 states exceeding\u00a0the limit, reflecting DISCOMs\u2019 mounting losses.\u00a0<\/p>\n

Additionally, the Central Electricity Authority (CEA) has set technical standards for grid connectivity, while the Indian Electricity Grid Code (IEGC) mandates frequency control for renewable plants. Transmission expansion, aligned with renewable capacity, is being supported through the Green Energy Corridor scheme, enabling 44GW of intra-state evacuation, with further upgrades under the 2023-2032 National Electricity Plan.<\/p>\n

Moreover, Rustagi emphasises that advanced technologies,\u00a0such as static synchronous compensators (STATCOMs),\u00a0static VAR compensators (SVCs), synchronous\u00a0condensers\u00a0and\u00a0automatic\u00a0generation\u00a0control\u00a0(AGC)\u00a0are being deployed, alongside\u00a0regional\u00a0energy\u00a0management\u00a0centres and\u00a0automatic\u00a0weather\u00a0stations to manage variability.\u00a0<\/p>\n

The proposed\u00a0Draft Electricity (Amendment) Bill, 2025,\u00a0could further accelerate this transformation by\u00a0opening up\u00a0distribution to competition.\u00a0Rustagi calls it \u201ca major initiative to reform and open up the entire distribution business.\u201d\u00a0<\/p>\n

India is also investing heavily in storage and market mechanisms to enhance grid flexibility.\u00a0\u201cWith the rapid growth in solar and wind, there is an acute need for more storage capacity to balance the grid,\u201d Rustagi says, pointing to\u00a0nearly 100GWh\u00a0of storage auctions spanning pumped hydro and battery systems.\u00a0<\/p>\n

Towards a more balanced grid\u00a0<\/h2>\n

Looking ahead, Rustagi expects India\u2019s energy system to become more balanced between centralised and decentralised models.\u00a0\u201cHistorically, the sector has been heavily weighted towards national grid-connected, large-scale projects,\u201d he says. \u201cThat balance is now shifting. Rather than moving from centralised to decentralised systems, the\u00a0two\u00a0are beginning to develop more evenly, with both playing\u00a0an important role\u00a0in the sector\u2019s growth.\u201d\u00a0<\/p>\n

Utility-scale solar will continue to depend on national grid expansion, particularly in resource-rich regions, but distributed renewables are set to play an increasingly\u00a0important role\u00a0in capacity addition.\u00a0<\/p>\n

Despite current constraints, Rustagi\u00a0remains\u00a0optimistic about India\u2019s long-term trajectory.\u00a0\u201cWhen the 500GW target was announced,\u00a0nobody took it seriously,\u201d he says. \u201cBut this time we are actually expecting for the target to be exceeded.\u201d\u00a0<\/p>\n

With strong fundamentals, a maturing domestic supply chain and ongoing grid investments, India appears well positioned to meet its ambitious renewable energy goals.\u00a0<\/p>\n

\u201cIf we keep adding capacity at current levels with slight increases year on year, we will be able to easily meet the 500GW target,\u201d Rustagi concludes.<\/p>\n<\/div>\n

Read More<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cThere is currently a crunch in grid capacity available, particularly on the national grid. Many projects that were to be connected at the national grid level are getting delayed.\u201d\u00a0 A recent\u00a0Ember report\u00a0illustrates the challenge: as non-fossil fuel sources reached around 50% of installed capacity\u00a0last year, 2.3TWh of solar was curtailed between May and December\u00a0due to<\/p>\n","protected":false},"author":1,"featured_media":901631,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[94110,28591],"tags":[11868,18911],"class_list":{"0":"post-901630","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-consolidation","8":"category-gathers","9":"tag-consolidation","10":"tag-gathers"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/901630","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=901630"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/901630\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/901631"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=901630"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=901630"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=901630"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}