India clears Rs 1.86 lakh crore green energy corridor scheme with battery storage - The Indian Express

The Union Cabinet on Wednesday approved the Green Energy Corridor Phase-III (GEC-III) scheme, aimed at enabling the evacuation of up to 135 gigawatts (GW) of renewable energy across states. With a total outlay of Rs 1,86,405 crore, the scheme is targeted for completion by FY33. This scheme is aimed at tackling a festering problem in India’s power sector — even as the peak power demand has been surging to record highs, the grid operators have been forced to curtail electricity generated by solar power sources due to transmission bottlenecks.

Along with the development of the intra-state transmission system (InSTS), the scheme, for the first time under the Green Energy Corridor programme, includes a dedicated battery energy storage component, with provisions for deploying 50 GWh of Battery Energy Storage Systems (BESS) at renewable energy developer/generator sites or other locations of importance to the grid. According to the government, the storage capacity is intended to address intermittency, transmission congestion and peak-hour curtailment, while helping meet demand during non-solar hours.

Of the total outlay, Rs 1,36,378 crore has been earmarked for developing intra-state transmission systems, while Rs 50,000 crore has been allocated for 50 GWh of BESS. The scheme will involve total Central Financial Support of Rs 54,082 crore.

“The Central Financial Assistance (CFA) will help in offsetting the Intra-State transmission charges and thus keep the power costs down. Thus, the government support will ultimately benefit the end users — the citizens of India,” the government said in a statement.

“All Greenfield projects under the InSTS component will be implemented through Tariff Based Competitive Bidding (TBCB) mode, while brownfield upgradation and network strengthening works will be executed under Cost Plus Basis (CPB). The State Transmission Utilities will be the overall implementing agency, and Transmission Service Providers (TSPs) will participate under TBCB on a Build-Own-Operate-Maintain (BOOM) model,” the government added.

The inclusion of the battery component in the scheme comes as the country’s rapidly expanding renewable energy sector is grappling with a major challenge of transmission constraints.

Close to 21 GW, about 9% of the installed renewable energy capacity, is transferred from plants through temporary grid connections while awaiting dedicated transmission infrastructure. Of this, around 12 GW faces restrictions on evacuation of electricity during periods of peak solar generation, exposing developers to revenue losses and raising concerns over the financial viability of several projects.

During FY26, around 6,900 gigawatt-hour (GWh) of clean electricity faced restrictions due to a mismatch between the rapid pace of renewable energy deployment and commissioning of associated transmission infrastructure, latest government data shows.

During April-June, when the peak power demand touched a record high of 270 GW, the grid operators had to curtail 8,133 GWh of electricity generated by solar power sources due to transmission bottlenecks and to maintain grid security, Ministry of New and Renewable Energy (MNRE) had informed the Parliament in July.

The curtailed electricity from solar sources is approximately equal to one-and-a-half days’ worth of power consumed by the entire country in April-June.

Curtailment — when grid operators ask renewable energy plants to reduce generation to maintain system stability — translates into a substantial loss of clean electricity at a time when India plans to expands renewable ⁠energy capacity to meet its clean energy targets of 500 GW by 2030 from the present 295 GW.

Notably, the Ministry of New and Renewable Energy (MNRE) is implementing the Green Energy Corridor (GEC) in two phases to augment transmission lines and transformation capacity through intra-state transmission (InSTS) and inter-state transmission (ISTS) networks. However, a parliamentary panel has previously flagged delays in the scheme’s implementation.

According to government data, under GEC Phase-I, being implemented across eight states — Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, and Tamil Nadu — 9,130 circuit kilometres (ckm) of transmission lines had been constructed as of June 30 against the target of 9,461 ckm.

Under GEC Phase-II, which is being implemented in seven states — Gujarat, Himachal Pradesh, Karnataka, Kerala, Rajasthan, Tamil Nadu and Uttar Pradesh — the target is to add 7,863 ckm of transmission lines and 24,388 MVA of substation capacity. According to the government’s data submitted to Parliament, of the 95 packages under the scheme, 93 had been tendered and 85 awarded as of June 30. A total of 1,124 ckm of transmission lines had been charged and 6,860 MVA of substation capacity commissioned till June 30.

As per the report of the parliamentary panel, issues related to compensation for Right of Way (RoW) have emerged as the major cause for delay in laying of transmission lines.