By: Abhinand Basant, Deputy Managing Director, Kshema Power India
Something has shifted in the arithmetic of India’s power sector, and the capital backing the transition has recognised this shift well ahead of the headlines. For most of the past decade the binding constraint on clean energy sat firmly on the generation side, in land acquisition, module supply, turbine availability, tariff discovery and off-take certainty. That constraint has now broken. India added 55.29 GW of non-fossil capacity in FY 2025-26, the highest figure recorded in any single year and nearly double the previous record of 29.5 GW, according to the Ministry of New and Renewable Energy, which suggests that building clean power is no longer the difficult part of the transition.
The value of installed capacity is realised only when transmission infrastructure can reliably connect generation to demand. That route is the high-voltage spine that carries electricity from the resource-rich districts where it is produced to the industrial belts and urban load centres that actually consume it, and it has quietly become the most consequential and least celebrated asset in the Indian energy stack. Treating it as back-office infrastructure rather than as strategic capital is the central planning error of this cycle.
Generation vs. Transmission
The mismatch between the two is structural rather than accidental, and it begins with the clock each one runs on. A utility-scale solar plant can travel from financial close to commissioning inside 12 to 18 months, while an extra-high-voltage transmission line takes 24 to 40 months, because route surveys, right-of-way negotiation, forest clearance, foundation work and conductor stringing across genuinely difficult terrain cannot be compressed in the same way. The result is a single grid operating on two very different timelines, and the gap between them is where value quietly leaks out of the system.
That leakage is now measurable rather than theoretical. Analysis published by the energy think tank Ember found that roughly 300 GWh of renewable generation was curtailed in the first quarter of 2026 purely because the network could not carry it, close to two thirds of all curtailment on the national grid in that period. It also notes that India has delivered only about 80 per cent of its annual transmission targets over the past five years and that around one in four interstate schemes is running a year or more behind schedule, which points to a backlog that is compounding rather than clearing.
Curtailment of this kind rarely reaches the front page, surfacing in revised debt service coverage ratios and in the quiet repricing of projects. According to another estimation, a delay of six to twelve months in grid access can compress a project’s internal rate of return by 100 to 200 basis points, and in auctions decided by a few paise, this figure is not a rounding error but the margin itself.
Transmission Emerges as a Distinct Investment Opportunity
Policy has already quantified the opportunity with some precision. The National Electricity Plan for transmission, prepared by the Central Electricity Authority, calls for more than 191,000 circuit kilometres of transmission lines and 1,270 GVA of transformation capacity between 2022-23 and 2031-32, alongside 33 GW of HVDC bipole links, lifting inter-regional transfer capacity from 119 GW to 168 GW, and pegs the associated investment requirement at over ₹915,000 crore by 2032.
Tariff-based competitive bidding has attracted infrastructure funds, pension funds and sovereign investors to a sector once dominated by state utilities. With relatively predictable, availability-linked revenues, transmission assets are increasingly viewed as stable, long-term infrastructure investments. As a result, investors are shifting their focus from module efficiency and power generation forecasts to grid connectivity, evacuation readiness and pooling-station capacity.
Demand is increasingly coming from commercial and industrial buyers, who accounted for about 34% of solar and 75% of wind capacity added in FY 2025–26. At this scale, reliable power evacuation is no longer just a developer concern—it is becoming a critical procurement priority for businesses.
Where Projects Actually Slow Down
The primary bottleneck in India’s clean energy expansion is no longer access to capital but execution capacity. Securing right-of-way remains a major hurdle due to fragmented land ownership, compensation disputes, legal challenges, and lengthy environmental approvals. In sensitive regions like Rajasthan, mandates for underground cables through wildlife habitats have required complex mid-project redesigns. At the same time, a tight global supplier base for high-voltage direct current (HVDC) converter equipment has turned procurement into a significant scheduling risk. Resolving these challenges requires precise project sequencing, disciplined engineering oversight, and contractors experienced in navigating difficult terrains, from Himalayan altitudes to extreme desert environments.
Several solutions can ease grid congestion while new transmission corridors are being built. Battery storage at pooling stations can absorb surplus solar power, while dynamic line rating and high-temperature, low-sag conductors can increase existing corridor capacity. Substation upgrades and timely grid integration can further unlock stranded generation. Strong O&M is essential to sustain performance over the asset life.
India’s next phase of clean-energy growth must be measured not only by capacity installed, but by transmission infrastructure energised and power reliably delivered. Achieving the 500 GW target will depend on a strong grid that connects generation to demand.