Right-of-way, land acquisition and regulatory delays in transmission projects are emerging as a key risk for renewable energy developers, with around 33% of recently commissioned 54.8 GW renewable energy capacity being evacuated through the temporary general network access route as of May 2026, where curtailment during solar hours has remained as high as 50-60%, even as India lines up a ₹5-6 trillion transmission capex cycle between 2026-27 and 2031-32, Icra said.
The rating agency expects a significant uptick in capacity addition in the power transmission sector as the country prepares to integrate upcoming renewable energy capacity into the grid. The capex will be driven by the government’s plan to evacuate power from over 900 GW of non-fossil fuel capacity by 2035-36, including around 548 GW of solar and wind capacity.
“The projected transmission capex of ₹5-6 trillion entails strengthening of the existing infrastructure, adding evacuation capacities as well as new transmission routes to support the generation centres,” said Ankit Jain, Vice President and Co-Group Head, Icra Limited.
Jain said Icra estimates that to reach close to the targeted level set by the government in its earlier National Electricity Plan-II, the sector would require a significant upsize in transmission line and sub-station capacity additions of about 20,000 circuit kilometres and 120 gigavolt-amperes, respectively, on an annual basis.
“This entails an investment opportunity of at least ₹5-6 trillion between 2026-27 and 2031-32 in the sector,” Jain said.
The expected investment cycle is also lifting prospects for equipment suppliers. Outstanding orders and order inflows for key equipment suppliers to the transmission sector in 2025-26 have more than doubled since 2021-22. Icra said the surge in transmission capex over the coming years is expected to lead to healthy order inflows for these players.
Supply-Side Bottlenecks
However, supply-side constraints could weigh on project timelines. Limited capacity of equipment manufacturers and skilled manpower may constrain execution unless these players scale up their capacities.
Execution risks remain the most critical challenge. “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,” Jain said.
Icra said most transmission projects awarded by central nodal agencies through the tariff-based competitive bidding route have been delayed beyond their scheduled commissioning date. Of the total projects commissioned by March 2026 under this route, only around 12% were completed within the scheduled timeline. The balance was commissioned with delays ranging from two months to three years, with the median delay exceeding 10 months.
Project Slippages
These delays are already feeding into curtailment risks. Since the last fiscal, high renewable energy penetration regions where transmission evacuation infrastructure is yet to fully operationalise have seen significant capacity curtailment. Icra said curtailment in the interstate transmission system network is largely driven by transmission constraints or inadequate temporary general network access margins, resulting in non-scheduling of power.
The problem is more prominent in Rajasthan and Gujarat, while curtailment in the southern region remains limited even during solar hours.
A pipeline of about 107 GW across solar, wind, hybrid, hydro, pumped storage and thermal segments, already granted connectivity, is 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,” Jain said.