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Surrounding the golden fortress city of Jaisalmer in India’s Thar desert, a sea of wind turbines stretches out across the arid landscape as far as the eye can see — visibly marking the world’s third-largest carbon emitter’s green power expansion.

Engineers at a 30MW wind farm here operated by ReNew, one of India’s biggest clean energy developers, speak with pride about contributing to a national renewable capacity goal of 500GW by 2030. Yet not all of the country’s green power can be dispatched, with the energy grid emerging as a choking constraint.

Sumant Sinha, chair and chief executive of ReNew, is confident India will “definitely” achieve its renewable capacity target. “I can see that we’ll get to 500GW, but we won’t be able to exceed it because there’s not enough transmission.”

While India boasts one of the world’s largest transmission networks, spanning more than 494,000 circuit kilometres, the grid has not kept pace with the surge in renewable projects. More than 50GW of capacity is stranded, according to the Institute for Energy Economics and Financial Analysis, a US-based think-tank, and JMK Research & Analytics, an Indian cleantech research and consulting firm.

© Sajjad Hussain/AFP/Getty Images

“Transmission has become a critical bottleneck . . . causing rising curtailment and commissioning delays in resource-rich states,” says Jyoti Gulia, founder and chief executive of JMK.

Earlier this year, Pralhad Joshi, India’s minister for new and renewable energy, hailed a “Historic Green Leap” after the country reached 50 per cent of its power capacity from renewables, now totalling 243GW.

Even so, Gulia says, grid expansion delays would “lock in higher coal generation”. Nearly three-quarters of India’s power currently comes from coal, which remains central to meeting its growing electricity demand.

This is partly due to fragmented planning between state and central authorities, which largely run India’s grid, as well as mismatched build cycles. Renewable projects can be completed in 12 to 18 months, while transmission lines typically take three to five years.

Clean power is also predominantly produced in three states: Rajasthan, Gujarat and Tamil Nadu, while high demand regions such as Delhi, Haryana and Uttar Pradesh have little capacity, making cross state delivery critical.

“To perfect the timing is impossible,” Ashish Khanna, chief executive of Adani Green Energy — the country’s largest renewable power company — said in September at the Financial Times’ Energy Transition Summit in New Delhi. “You can’t first wait for a grid to come and then build a renewable project.”

Those constraints have become the most visible in the northwestern wind and sun-rich state of Rajasthan and development heavy areas there such as Jaisalmer. IEEFA and JMK estimate that 8GW of clean power capacity in the state currently cannot be transmitted.

One renewable industry executive in Rajasthan says the “spurt” of green projects, paired with slow grid growth, will probably slow further capacity build out for at least a couple of years.

Developers also face obstacles from environmental blockages and grinding difficulties acquiring contiguous land in a country with hundreds of millions of smallholder farmers. In parts of Rajasthan and neighbouring Gujarat, a years-long legal ban has prevented new overhead transmission lines from being laid across more than 100,000 sq km to protect the Great Indian Bustard, a highly endangered and poor-sighted bird known to fly into power cables.

In key areas, smaller players have also exploited those time lags, pre-booking chunks of transmission capacity with no intention of building power plants — driving up premiums to secure connectivity, which they then sell to developers. This delays projects and further burdens genuine operators.

Gulia says the bureaucratic need for multi-agency clearances and right-of-way permits that are frequently initiated post-award cause “months to years of delay”. Ideally there should be a single-window regulatory clearance system with strict timelines, she says, as well as performance-based incentives and disincentives.

Last year India announced a plan to bolster the power grid and deploy the vast amounts of renewable energy coming online. The expansion is expected to cost Rs9.15tr ($104bn) to allow the transmission of 600GW of green power capacity by 2032.

However, India’s Central Electricity Authority agency has acknowledged that public funding will not be sufficient to cover the build-out, which means the private sector is likely to have to step in.

Private investment from the likes of Adani and Tata Power is already starting to reshape the sector, Khanna at Adani Green says. About 9 per cent of the grid is operated by corporates.

“They are going to bring their own efficiencies to the system,” adds Khanna, “so I am hopeful that in times to come we will have less [of a] gap.”

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