Transmission Bottlenecks Threaten India’s Renewable Energy Boom: Grid Delays, T-GNA and Financial Risks

Transmission Bottlenecks Threaten India’s Renewable Energy Boom Latest News

• Nearly 21 GW — about 9% of India’s installed renewable energy capacity — is running on temporary grid connections due to delayed dedicated transmission infrastructure, putting project revenues and clean energy targets at risk.

The Core Problem

• Renewable energy capacity is being added faster than the transmission network needed to evacuate that power.
• Around 12 GW faces restrictions on power evacuation during peak solar generation hours.
  • Power evacuation refers to transferring electricity generated at a plant to the point of consumption.
• In FY26, about 6,900 GWh of clean electricity faced restrictions due to this mismatch; during April–June alone, 8,133 GWh of solar electricity was curtailed.

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Understanding the GNA-TGNA Framework

• Under the General Network Access (GNA) framework, inter-state transmission-connected projects with long-term GNA get firm evacuation rights — that is, guaranteed access to send their power into the grid.
• Projects awaiting dedicated transmission infrastructure operate under Temporary General Network Access (T-GNA), a stopgap arrangement that allows scheduling of power only when spare capacity exists.
• During congestion, long-term GNA projects get priority, forcing T-GNA projects to curtail (reduce) generation — by as much as 70-80% of capacity, according to developers.
• Electricity curtailment means the intentional reduction of power output from renewable generators.

Financial Stress on Developers

• Solar power enjoys “must-run” status in India, but can still be backed down for grid security, technical constraints, or transmission bottlenecks.
• Developers get compensated for grid-security-related curtailment, but not for T-GNA-related curtailment — directly eroding revenues.
• In Rajasthan, curtailment has reportedly touched 90-95% for some projects, with roughly 4 GW of state capacity affected.
• Developers are increasingly funding operations through equity and reserves rather than actual power revenue — an unsustainable model over time.
• As a result, the experts have demanded moratorium on principal repayment during transmission delays, interest-free/concessional bridge financing, extended loan tenure without credit downgrades, and debt restructuring without asset reclassification.

Risk of NPAs and Systemic Impact

• Industry experts warn affected projects could turn into Non-Performing Assets (NPAs) if the issue persists.
• They noted generators lose over 50% of generation during peak solar hours due to T-GNA curtailment — a rate unsustainable beyond a few months for loan servicing.
• 12 public sector banks, along with IREDA, PFC, REC, NaBFID, IIFCL, and SIDBI, cumulatively deployed about Rs 5.08 lakh crore in the renewable sector over FY25-26 — meaning financial institutions also bear risk if project viability deteriorates.
• Analysts have flagged that continued slippage in transmission commissioning could hit capacity additions, cash flows, Internal Rate of Returns (IRRs), and investor confidence.

Conclusion

• India’s renewable energy growth is being outpaced by transmission infrastructure, trapping a significant share of green capacity in a temporary, low-priority access regime. 
• Left unaddressed, this mismatch threatens developer solvency, banking sector exposure, and India’s broader clean energy targets — making transmission planning as critical as capacity addition itself.

Source: IE | BS