India’s renewable energy surge is running into a hard grid constraint, with 4 GW of clean power curtailed, project timelines stretching from 24 to 36 months, and a ₹9 trillion transmission investment requirement colliding with rising costs and execution delays, exposing a widening gap between generation and evacuation infrastructure.
The scale of the disruption is already visible. In Rajasthan, nearly 4 GW of wind and solar capacity was curtailed between March and August 2025, with curtailment levels rising sharply from 8.5% to 51.5%, signalling severe congestion in one of the country’s largest renewable hubs.
“CEA monthly reports document ~4GW wind-solar curtailed in Rajasthan (Mar-Aug 2025), escalating from 8.5% (March 2025) to 51.5% (August 2025) due to ISTS evacuation gaps. Total stranded capacity likely 6-8GW when including partially curtailed plants,” the InGovern Research Services report said.
Not an isolated problem
The problem is not isolated. Other renewable-heavy states such as Gujarat, Maharashtra and Tamil Nadu have also recorded 10–30% curtailment, indicating a broader systemic strain across India’s renewable corridors.
“The physical infrastructure required to transport this energy… is becoming a structural bottleneck,” the report said, adding that the issue reflects a deeper “disconnect between generation commissioning and transmission readiness.”
The scale of the challenge is substantial. India will require nearly ₹9 trillion in transmission investments between FY23 and FY32, including ₹4.25 trillion during FY22–27 and ₹4.91 trillion during FY28–32, to support over 600 GW of installed capacity by 2032, according to Motilal Oswal Financial Services.
Major additions projected
The National Electricity Plan projects addition of over 191,000 circuit kilometres of transmission lines, 1,270 GVA of transformation capacity and 33 GW of HVDC links, highlighting the magnitude of infrastructure build-out required.
However, execution is falling behind. Transmission projects designed for 24 months are now taking nearly 36 months, with a group of projects witnessing average delays of around 12 months, driven by right-of-way issues, forest clearances and on-ground constraints.
In several cases, progress has lagged sharply. The report highlights a “time-progress divergence,” where certain projects have achieved only 3% physical progress despite utilising 28% of their timeline, pointing to early-stage execution bottlenecks.
Significant financial impact
The financial impact is significant. A 12-month delay can erode equity internal rate of return (EIRR) by nearly 200 basis points, as interest during construction continues to accrue without matching tariff escalation.
The cost pressures are also intensifying. According to Motilal Oswal Financial Services, rising commodity prices, particularly copper used in conductors and cables, are increasing transmission project costs, adding to capital expenditure requirements and affecting project viability.
Lead times are also extending as domestic manufacturers operate at high capacity utilisation and shift towards higher voltage transformers such as 400 kV and 765 kV, which involve longer manufacturing and testing cycles.
At the system level, installed transmission capacity stood at around 1,451 GVA as of March 2026, leaving a gap of 431 GVA to be added by FY27, underlining the pace required in the near term.
The execution landscape is also concentrated. Power Grid Corporation of India Ltd (PGCIL), which operates 1,83,174 circuit kilometres of lines and 288 substations with 5,99,016 MVA capacity, accounts for about 84% of inter-regional transmission capacity.
Over FY21–FY25, PGCIL secured more than 50% share of interstate transmission projects by tariff value, and in FY2025 alone, it won 26 out of 45 projects, or 53.4% share by value, highlighting reliance on a single player for large-scale grid expansion.
Its execution pipeline remains substantial, with ₹1.48 lakh crore of work-in-hand and a capital expenditure plan of ₹3 lakh crore through FY2032, but rising costs and delays are putting pressure on delivery timelines.
At the same time, awarding activity has slowed. Only 16 transmission schemes were awarded in FY26 compared to 45 in FY25, primarily due to temporary bandwidth constraints, though ordering is expected to recover as capacities expand over the next 1–2 years.
The InGovern report noted that despite record capital expenditure, there is a widening gap between spending and asset commissioning. While capex reached ₹26,255 crore in FY25, capitalisation stood at only ₹9,014 crore, pointing to delays in translating investment into operational assets.
It added that the combination of curtailment, execution delays and cost pressures signals a broader “systemic lag” in transmission development.
At the same time, the push for grid stability is accelerating adoption of battery energy storage systems (BESS), with India targeting around 13.5 GW by FY27 and 51.5 GW by FY32, which is expected to drive incremental equipment demand but also add to system complexity.
According to Motilal Oswal Financial Services, the key risks flagged include supply chain disruptions, semiconductor shortages, slower tendering activity, challenges in scaling BESS and rising commodity costs, particularly copper, which continue to weigh on execution timelines.