New Delhi: India is preparing a major push to unclog its increasingly stretched green power grid, with the ministry of new and renewable energy (MNRE) set to shortly seek Union cabinet's approval for the over ₹50,000-crore third phase of India's green energy corridor, according to two government officials.
The much-awaited new phase will strengthen intra-state transmission networks in renewable energy (RE)-rich states, including Gujarat, Rajasthan, Karnataka, Maharashtra and Andhra Pradesh, they said. Most of the projects under this phase are expected to be in Gujarat, followed by Rajasthan.
The push comes as India’s rapid addition of solar and wind capacities outpace the grid’s ability to evacuate the power, forcing generation curtailment and emerging as a key hurdle to the country's 2030 clean energy goals.
The proposal has already got the go-ahead from the finance ministry's expenditure finance committee (EFC) and has also cleared other requirements ahead of cabinet consideration, the officials said.
The scheme is expected to include intra-state systems to support renewable energy-rich states and states with emerging RE markets, with the parent ministry for support to offset high costs, reduce tariffs, and eventually attract private investment, the officials said.
The development assumes significance amid rising share of renewable capacity and instances of generation curtailment due to transmission capacity constraints. The scheme will aim to develop transmission and power transformation capacity–substations across the renewable energy-rich states.
India has recorded an electricity curtailment equivalent to 18% of the average monthly solar generation of 13 terawatt hours (TWh), which is resulting in compensation payouts.
“We are doing two things under the green energy corridor: developing new lines and also augmenting existing substations and transmission lines. The scheme will next be taken to the cabinet,” said one of the two government officials cited above, with both requesting anonymity.
“The scheme size will be over ₹50,000 crore. All other approvals required prior to cabinet approval have been received,” said the second official.
The issue at hand
Curtailment of solar and wind power generation takes place due to inadequate transmission capacity despite the growing renewable energy capacity in the country. India’s ambitious solar power goals amid inadequate transmission and electricity storage capacity has spooked the country’s power grid with stability concerns.
Industry participants say transmission, not generation, is the binding constraint on India's energy transition.
Sanjeev Aggarwal, founder and executive chairman, of I Squared Capital-backed Hexa Climate, said, “We are already curtailing clean power as the grid simply cannot evacuate, and one in four inter-state schemes is running a year or more behind."
"Against that, a ₹50,000 crore phase-III is the right order of magnitude, and structuring it as a competitively-bid PPP (public-private partnership) , with private developers carrying right-of-way risk and performance penalties, is exactly the accountability the earlier phases lacked," Aggarwal said.
He, however, sees the real test in sequencing, as the corridors have to be commissioned ahead of the plants they are meant to evacuate, not two years after.
Aditya Malpani, senior director and regional head, business development (West) at AMPIN Energy Transition, said the plan is absolutely crucial to maintain the must run status of renewable energy projects. “With the expansion of dedicated transmission corridor for RE projects, it will resolve the curtailment issues being faced by developers, ultimately helping the grid/discoms," he added.
Shaping the green corridor
India's green energy corridor project took off in 2015 comprising both Inter State Transmission System (ISTS) and Intra State Transmission System (InSTS) along with the setting up of RE management centres and control infrastructure storage systems.
Under the first phase, the intra-state transmission system for evacuation of 24GW RE has been commissioned, while the transmission system under the second phase for evacuation of around 20 GW RE is under implementation and is likely to be completed by end FY27. The two phases involve an investment of around ₹10,000 crore and ₹12,000 crore, respectively.
India has a transmission capacity of 5,08,535 circuit km.
Queries emailed to the union ministry of new and renewable energy remained unanswered until press time.
At a recent event, MNRE minister Pralhad Joshi had said India has started planning the next phase of its green energy corridor project, covering 10,000 circuit km of transmission network to evacuate large volumes of renewable power to the consumption centres.
On Sunday, the ministry announced that India's non-fossil power generation capacity has reached 300GW, led by solar power, reaching about 54% of the targeted 500GW by 2030.
A report by Parliament's standing committee on energy, submitted on 6 August, said MNRE was working to launch the this phase of the green energy corridor in FY27, under which it aims to evacuate around 135GW of renewable energy. The ministry told the panel that the plan was structured as a PPP scheme, to be implemented in tariff-based competitive bidding (TBCB) mode.
A report released in May by green energy-focussed think tank Ember said India’s renewable buildout is outpacing grid expansion. "In the first quarter of 2026, transmission constraints accounted for nearly two-thirds of all renewable energy curtailment at 300GWh. This growing mismatch between fast-moving solar projects and slower-moving transmission infrastructure is now the most critical operational risk to the country’s 2030 target of 500GW of non-fossil electricity," it said.
This comes at a time when distribution companies (discoms) are selling renewables on electricity exchanges at a price lower than the purchase rates. Also, several states, including Uttar Pradesh, Bihar, Assam and West Bengal, have signed costly coal-fuelled power purchase agreements (PPA) rather than the cheaper green power.
Over the past five years, India has delivered only about 80% of its annual transmission targets. The government estimates the requirement of 61,411 circuit km (ckm) of additional interstate transmission system (ISTS) capacity by FY30.