By Dhanendra Kumar
India is running a galloping race towards a green future. With a goal to build 650 gigawatts (Gw) of renewable energy capacity by 2032, the ambition is clear. However, an essential piece of the puzzle is failing to keep pace—the power transmission network. We are building solar panels and wind turbines faster than we can build the network to carry that electricity. The result is a costly logjam, and a primary cause is the overwhelming concentration of project execution with a single entity—the state-owned Power Grid Corporation of India (PGCIL).
How to identify this problem?
The most visible symptom of this problem is “curtailment”, which is a technical term for a simple, wasteful reality: Turning off perfectly good renewable energy plants because the grid cannot absorb their power. When too much power is generated in one area and the transmission lines cannot handle the flow, operators may have to curtail some of the generation, even when they have this capacity, to prevent overloading the grid. Curtailment happens primarily due to transmission congestion, lack of grid capacity, or mismatches between generation and demand, leading to lost revenue for producers and wasted clean energy. Producers are paid for the electricity they generate, so curtailment directly results in lost income, affecting financial viability and debt servicing for capital-intensive projects. Curtailment also represents a loss of clean, carbon-free energy that could have been used instead of fossil fuels, which undermines environmental goals.
Consider Rajasthan. Between March and August this year, nearly 4 Gw of clean power was wasted. At its peak in August, over half of the potential solar and wind generation in the state was forcibly idled. Similar scenes are playing out in Gujarat and Maharashtra.
For developers, this is a financial blow. Reports indicate losses of up to 250 crore in just five months as revenue vanishes into thin air. The Central Electricity Regulatory Commission has also admitted petitions filed by two solar developers seeking compensation for losses caused because their projects were complete, but the grid connectivity from the PGCIL was not. One of the developers has claimed21 crore in losses alone.
The root of this evacuation crisis is a systemic delay in building the high-voltage interstate transmission lines (ISTS). The data is telling. In the last fiscal year, the sector built only 8,830 circuit kilometres of transmission lines against a target of 15,253—a 42% shortfall, the lowest ISTS addition in a decade.
This is where the problem of concentration becomes acute. The PGCIL is an undeniable national asset with a proven track record. However, its overwhelming and dominant market share is creating a single point of failure. In the last fiscal year, it was the lowest bidder in 26 out of 45 interstate transmission projects, accounting for over 57% of all projects. Of the 91 projects currently under execution, valued at over `2.3 lakh crore, the PGCIL is handling 46.
Relying so heavily on one entity for a task of this scale and urgency is a systemic risk. This concentration directly translates into delays. Key projects, many executed by the PGCIL, are running 18-24 months behind schedule. A scheme to evacuate 8.1 Gw of solar power from Rajasthan, with parts scheduled for completion as far back as 2022, is still not fully operational. Similar holdups are seen in major projects in Khavda (Gujarat) and Anantapur (Andhra Pradesh). When one company bears too much of the burden, delays in one project inevitably cascade, holding up multiple renewable energy zones at once.
So, what is the way forward?
First, we must consciously decentralise the development of our transmission infrastructure. The regulatory framework should actively encourage more players. This would also be in consonance with competition. A practical step would be to introduce market share limitations, similar to the successful model used in solar power auctions, where a single bidder cannot be allocated more than 50% of the offered capacity. This would preserve competitive intensity and build execution resilience without undermining PGCIL capabilities.
Second, we must tackle the biggest on-ground hurdle—securing right-of-way and statutory clearances. The government should institute a dedicated single-window clearance mechanism for interstate transmission projects. By having a central authority to handle land and environmental clearances, we can shift this non-core execution risk away from individual bidders and into a more efficient, stable institutional framework.
India’s renewable energy dream is too important to be left stranded. We have successfully created a competitive and vibrant market for generating clean power. It is now time to apply the same innovative thinking to building the highways that will carry it. A robust, timely, and modern transmission grid is the backbone of our energy future. To build it, we need more than one strong back—we need a concerted, collective effort.
The writer is former Chairman, Competition Commission of India, and Chairman, Competition Advisory Services India LLP (COMPAD)
Disclaimer: Views expressed are personal and do not reflect the official position or policy of FinancialExpress.com. Reproducing this content without permission is prohibited.