Too much power, too little grid: Why Adani, NTPC and JSW are forced to cut solar power production
What happens when solar power capacity races ahead while transmission capacity lags? A bottleneck, that has forced the grid regulator to step in and direct power production cuts at Adani Group, NTPC Green, KKR-backed Serentica, EQT-backed Zelestra and JSW Group
Top solar power producers in Rajasthan have dialled down production, after a congested grid prompted the regional regulator to step in. According to three people aware of the matter, Adani Group, NTPC Green, KKR-backed Serentica, EQT-backed Zelestra and JSW Group have had to curtail peak-hour production totalling 5GW in the second half of November alone, leading to potential losses and highlighting the slow pace of transmission capacity addition in the face of frenetic solar power growth.
On 14 November, the Northern Region Load Despatch Centre (NRLDC) cited concerns over grid security to curb the evacuation of power from the plants in Rajasthan. NRLDC said it was restricting a mandatory no-objection certificate due to "evacuation constraints" in Rajasthan, the Indian state with the highest solar power production. Out of the above 23GW capacity at five power pooling stations, with only 18.35GW is available for evacuation, the communication said. The state's total renewable energy capacity stands at over 40GW.
Queries sent to NRLDC and the power companies remained unanswered.
According to one of the three people cited above, there are similar issues at other pooling stations as well. "There is curtailing of up to 50-55% in peak solar hours in some instances," the person said.
At the heart of the matter is the frenetic pace of India's solar power production, while transmission capacity has lagged.
Rahul Mishra, senior vice-president and head of commercial and industrial business, BluPine Energy said: "Rajasthan’s challenge today is that of evacuation. Capacity is built, plants are operational, but the grid cannot absorb and transmit the power because key high-voltage corridors are delayed by 15-24 months." This has led to a spike in power curtailment, and it will likely remain elevated for the next one to two until new infrastructure comes up, he said.
Rajasthan has India's highest solar irradiation and maximum solar days, and curtailing production here casts a long shadow. However, other states aren't spared either. Latest data from Grid Controller of India showed that on 1 December, 4.78GW or about 20% remained curtailed in the northern region, nearly 68% or 7.63GW in the southern region and 2.79GW or 30% in the western region.
An executive at a solar power project spelt out the financial implications. “If a plant sends out 20 million units of power at a tariff of ₹3 per unit, then cumulatively, the plant will earn ₹60 million. And if the RLDC directs supplying only 15 million units, then the developer would have to incur a revenue loss of ₹15 million. Along with generation loss, it also is a loss of revenue."
A renewable power plant is considered a "must-run" plant, meaning its production is not regulated for commercial reasons. However, the grid regulator can direct curtailment in case of a technical constraint or if production threatens grid security.
"On an average, we have been adversely impacted with 42% curtailment on monthly basis since the start of this financial year. We have been hit by losses to the tune of more than ₹20 crore due to that," said an executive at another developer.
The executive added that only in cases where power has been scheduled by the generator one day prior to the supply, and then curtailment follows the next day, the generator gets a partial compensation from the grid infrastructure provider.
The executive cited above noted that while tariffs on thermal power plants include two parts—fixed cost and variable—taking into account the capital cost, the same is not the case for solar, where capital cost is not included; therefore, any loss of power generated leads to loss of revenue.
A former executive with Grid India said 'right of way' remains a major issue in installing transmission capacity. “There have been increasing instances of resistance by residents against giving RoW and installation of transmission infrastructure. However, the recent commissioning of Khetri Narela 765 kv transmission line is expected to ease the situation going ahead."
Grid capacity is building up, though gradually. On Thursday, state-run Power Grid Corp. of India announced the commissioning of the 765 kV double-circuit Khetri–Narela transmission line connecting Delhi, National Capital Region and Rajasthan.
"As the Bhadla to Sikar 765 kv comes up, the situation should ease further," said the former official on condition of anonymity.
Bhupinder Singh Bhalla, former secretary of the Union energy ministry, acknowledged that curtailments are not common among must-run renewable energy projects. "These curtailments may have occurred due to transmission infrastructure not coming up on schedule resulting in lack of capacity to evacuate the higher generation during the peak solar hours," Bhalla said.
However, Bhalla was of the view that the curtailment is a short-term phenomenon and will ease out in the long run. “Although the affected companies may be incurring losses now, their investment plans may not be impacted by these instances."
Capacity addition in transmission space has been lagging amid issues such as land acquisition and RoW. In FY25, 8,830 circuit kilometres (ckm) were added, nearly 38% less than the 14,203 ckm added in FY24, showed data from the Central Electricity Authority (CEA). Overall, India has a power transmission network of 495,405 ckm, and as per the National Electricity Plan, an additional 191,000 ckm of transmission lines would be required by 2031-32.
The curtailment adds to the woes of the renewable energy space as developers are finding it tough to get buyers for about 43GW of power for which letter of awards (LoA) have already been given.
Mishra of Bluepine added: "That is also feeding into delayed PPAs. Some are examining battery energy storage system (BESS) to time-shift output, but storage can only partially soften a structural congestion problem and adds to cost."
These issues are significant, as prolonged delays risk slowing India’s plan to add 50GW of renewable capacity each year to reach 500GW by 2030 The setback comes after the Centre recently ordered state-owned power procurers to cancel awarded contracts where it’s not feasible to sign power sale and purchase agreements.
Mint had earlier reported that the power ministry has asked renewable energy implementation agencies to cancel projects for which PSAs and PPAs have not been signed. The energy ministry had on 4 November said that any cancellation would take place in a phased manner only after all viable options for executing power sale and purchase pacts are fully explored.
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