Transmission expansion trails renewable energy growth in India - Institute for Energy Economics and Financial Analysis (IEEFA)
Published February 26, 2026
Transmission Expansion Lags Behind Renewable Energy Growth in India
The rapid expansion of renewable energy capacity in India has been remarkable in recent years, yet the development of transmission infrastructure has not kept pace. A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) highlights this disparity, emphasizing the urgent need for improvements in the transmission sector to ensure the efficient delivery of renewable energy across the country.
As of March 2023, India had achieved a total installed renewable energy capacity of 174.6 gigawatts (GW), with solar energy contributing a significant portion of this growth. The country is on track to meet its ambitious target of 450 GW of renewable energy capacity by 2030. However, the current state of the transmission infrastructure poses a challenge to realizing this goal.
Current State of Transmission Infrastructure
India's power transmission system is primarily managed by state-owned entities, with the Power Grid Corporation of India Limited (PGCIL) playing a pivotal role in the national grid's development. Despite the progress made in expanding the grid, the report indicates that the transmission network needs substantial upgrades to accommodate the increasing share of renewable energy sources.
The IEEFA report notes that the existing transmission lines are often inadequate for handling the variable nature of renewable energy generation, particularly solar and wind. This variability can lead to congestion in the grid, resulting in curtailment of renewable energy generation—a situation where renewable energy producers are forced to reduce their output due to transmission constraints.
Investment Requirements
To address these challenges, the IEEFA report estimates that India will need to invest approximately $20 billion in the transmission sector over the next five years. This investment is crucial for enhancing the capacity and reliability of the transmission network, enabling it to support the growing demand for renewable energy.
The report emphasizes the importance of modernizing the transmission infrastructure to incorporate advanced technologies, such as smart grid solutions and energy storage systems. These technologies can help manage the intermittent nature of renewable energy generation, ensuring a stable and reliable power supply.
Policy Recommendations
To facilitate the necessary investments and improvements in the transmission sector, the IEEFA report outlines several key policy recommendations. First, it suggests that the government should prioritize the development of transmission infrastructure in areas with high renewable energy potential. This targeted approach will help to optimize the utilization of renewable resources and minimize transmission losses.
Additionally, the report advocates for the establishment of clear regulatory frameworks that encourage private sector participation in transmission projects. By attracting private investment, India can accelerate the pace of transmission infrastructure development and enhance competition in the sector.
Regional Disparities
The report also highlights regional disparities in transmission infrastructure development across India. While some states have made significant strides in expanding their transmission networks, others lag behind. This uneven development can create challenges in balancing supply and demand for electricity, particularly in regions that are rich in renewable energy resources but lack adequate transmission capacity.
To address these disparities, the IEEFA report calls for a coordinated approach among state governments, the central government, and transmission operators. Collaborative efforts will be essential to identify bottlenecks in the transmission network and implement solutions that benefit all stakeholders.
Conclusion
The growth of renewable energy in India presents a significant opportunity for the country to transition to a more sustainable energy future. However, without a corresponding expansion of transmission infrastructure, this potential may remain unfulfilled. The IEEFA report serves as a timely reminder of the need for strategic investments and policy reforms to ensure that India's renewable energy ambitions are supported by a robust and resilient transmission network.
As India continues to make strides toward its renewable energy targets, addressing the challenges in the transmission sector will be critical to unlocking the full potential of its renewable resources. By prioritizing transmission expansion, India can pave the way for a cleaner, more sustainable energy future.
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