Delays in land acquisition, right-of-way (RoW) clearances and regulatory approvals are emerging as a major bottleneck for India’s renewable energy ambitions, with a third of recently commissioned clean energy capacity relying on temporary transmission access that has seen curtailment of up to 60% during peak solar hours.
A report by Icra cautioned that while India is headed for a Rs 5-6 lakh crore investment cycle in power transmission between 2026-27 and 2031-32, the pace of grid expansion will have to accelerate sharply to keep up with the country’s renewable energy build-out.
As of May 2026, around 33% of the 54.8 GW renewable energy capacity commissioned recently was being evacuated through the temporary General Network Access (GNA) route, where power curtailment during solar hours has remained as high as 50-60% because of inadequate transmission capacity.
The planned transmission spending is tied to the government’s target of evacuating power from more than 900 GW of non-fossil fuel capacity by 2035-36, including about 548 GW of solar and wind projects.
“The projected transmission capex of Rs 5-6 lakh crore 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.
According to the rating agency, achieving the government’s earlier National Electricity Plan-II targets would require annual additions of about 20,000 circuit kilometres of transmission lines and 120 GVA of substation capacity.
“That translates into an investment opportunity of at least Rs 5-6 lakh crore between 2026-27 and 2031-32,” Jain added.
Supply-Side Deficits
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.
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,” he 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.
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.