A high level of preparedness notwithstanding, the Central Electricity Authority (CEA) is concerned that May and June as “high-risk months” could see power outages in many parts of the country.
Clearly, the comparatively higher pace at which renewable energy (RE) capacities have been added in recent years and establishment of the “world’s largest synchronised grid” haven’t been enough to pre-empt supply deficits during peak summer periods.
According to industry executives, the problem lies with belated focus on RE storage creation, which is crucial for round-the-clock RE supply. Connectivity of the naturally intermittent energy to the grid is still poor. Another issue slowing the growth of RE is the delay in signing of power purchase agreements (PPAs).
To be sure, about half — 46% to be precise — of the country’s installed power generation capacity is now RE-based, yet RE sector is capable of meeting just around 15% of the peak power demand (see chart). According to projections, even by 2030, RE could meet less than a third of the peak demand, though it might by then account for a two-thirds of the capacity in place.
RE capacity addition has far outpaced fossil-based (primarily coal-fired) power in recent years. Just 1.4 giga watts (GW) of thermal power were added in April-January 2024-25. In comparison, 29.5 GW was additionally created in RE sector in 2024-25.
With significant growth and initiatives underway to develop green energy corridors, faster execution and inter-agency coordination remain critical for more effective use of RE, industry players feel.
Kishor Nair, CEO of Avaada Energy, says: “The current transmission network, particularly at the intra-state level, lag behind the pace of installed generation capacity, especially in renewable-rich states. There is a need for faster execution of transmission corridors, timely grid integration, and robust planning between central and state agencies to ensure renewable energy is not stranded due to lack of evacuation infrastructure.”
Naveen Khandelwal, CEO, BrightNight India observes that many distribution companies (discoms) are taking time in signing of the PPAs either in hopes of a reduction in tariffs or due to “complexity” in the tender process.
“India would have signed more than 25-30 GW of PPAs in the last 12 to 18 months and bid for roughly 100 GW were called in the last two years. However, only 35-40 GW capacity (of PPAs) have got signed,” Khandelwal says.
Discoms are taking time in understanding whether generation profiles fit into their scheme of things. Or else, they may be looking for tariff reliefs.
While the government has been taking measures to solve these issues, hurdles remain. In October 2023, the ministry of power, under the Energy Conservation Act, notified year-wise Renewable Purchase Obligations (RPOs) extending till 2030. This was a pioneering move to buttress the commercial viability of RE units with legal backing. Separate RPO targets were set for solar, wind, hydro, and distributed RE.
Additionally, in 2022, the Central Electricity Regulatory Commission issued Connectivity and General Network Access to the Inter-State Transmission (IST) System Regulations, providing non-discriminatory open access to generating companies for IST through general network access (GNA). “After the introduction of these regulations, a lot of GNA got awarded but there is a mismatch between (PPA) winners and GNA awardees,” Khandelwal says. Actual commissioning of evacuation is not visible in the near future and that is going to delay the commissioning of projects on the ground, industry watchers believe. There is a significant amount of overlap as not all GNA awardees are PPA winners. Some of the PPA winners are actually waiting for evacuation.
Nair also highlights that the lack of enforcement mechanisms for non-compliance, especially penalty imposition. There are expectations among some states that central government will waive inter-state transmission charges that have created delays in PPA signings. “These regulatory uncertainties impact investor confidence and stall project financial closures,” Nair adds.
This is not to say RE delivery rates have not improved. Also, inter-regional grid capacity has risen substantially, with the facility to transfer 116 GW of power from one corner of the country to another, while maintaining consistent frequency.
Industry players believe that the situation should improve further in the next couple of years with commissioning of under-construction infrastructure and high-volume transmission corridors. “
Both HVDC and HVAC transmission systems should start reaching the completion stages by FY27, allowing offtake of huge volumes of power from generation-rich areas to load centres,” Khandelwal says. N Venu, MD & CEO, India and South Asia, Hitachi Energy stresses the need to streamline regulatory processes, ensure policy consistency, and enhance tender transparency.
Intermittency of RE creates two key challenges – timing mismatches between generation and consumption, and simultaneous peak production across multiple facilities. Solar peaks between 10 am and 2 pm, when consumption isn’t at the maximum, while wind generates 70% of its annual output in just four months, which is during monsoon. Siddharth Bhatia, CEO and MD, Oyster Renewable Energy says. “I anticipate mandatory minimum storage requirements for RE plants in the near future, along with continued development of pumped storage projects as grid-scale solutions.”
Renewable Energy Management Centers (REMCs) has been set up across regions to support grid operators in forecasting RE generation with greater precision. These centers, equipped with advanced analytics and real-time data, help in demand-supply planning and curtailment minimisation.
The National Electricity Plan (Transmission) unveiled last year estimates transmission infrastructure required to support 500 GW of RE capacity by 2030, and 600 GW by 2032. This requires addition of 190,000 circuit kilometres of transmission lines over the next decade. The plan also incorporates integration of 10 GW of offshore wind farms, 47 GW of battery energy storage systems, and 30 GW of pumped storage plants by 2030.
As per the industry, the fastest and most scalable way to address intermittency is to allow Battery Energy Storage Systems (BESS) at every RE project under a fixed feed-in tariff framework. “If developers are given the regulatory and commercial freedom to build, say, 100 mega watt hour or higher storage capacity at project sites wherever technically feasible, it will not only stabilize the local grid but also enhance the commercial value of RE,” Nair says. He feels this model can make RE dispatchable, reduce curtailment, and defer the need for expensive transmission upgrades.
The government has set a target of achieving 500 GW of renewable energy capacity by 2030, requiring addition of at least 50 GW of green capacity annually. “A run rate of 50 GW per year is needed, 30 GW annual addition is not enough,” says a senior executive at a Mumbai based energy company who did not wish to be identified.
Industry believes that the sector’s transformation hinges on three key interventions: rapid deployment of storage solutions including pumped hydro, modernization of grid infrastructure with emphasis on dynamic load management, and market-based mechanisms for better resource allocation. Giving more thrust to development of nuclear power as a clean base load complement to RE too is an imperative.
