Insufficient transmission lines have emerged as a major obstacle to India’s rapid expansion of renewable energy capacity, leading to many solar power projects being “curtailed” during daylight hours, rating agency ICRA said on Wednesday (August 19, 2026). Curtailment occurs when a power generator is forced to reduce or stop producing electricity due to oversupply and grid congestion.

Around 37% of renewable energy capacity at substations affected by curtailment in the northern, western, and southern regions operates under a Temporary General Network Access (T-GNA), and this capacity faces 30% to 50% curtailment during the day, ICRA said in a statement.

T-GNA is a short-term arrangement that allows a renewable energy project to use available capacity on the inter-State transmission system, typically for periods ranging from a single time block to about 11 months. Prolonged T-GNA use can affect a power supplier’s revenues. ICRA says projects operating under T-GNA are particularly vulnerable to curtailment, raising their operational costs.

In western India, where about 55% of the affected capacity was under T-GNA, peak curtailment reached 8,617 MW as of August 6; the corresponding figure for the northern region was 5,573 MW.

Better infrastructure needed

Girishkumar Kadam, senior vice-president and group head of corporate ratings at ICRA, said at a press briefing that timely execution of intra-State and inter-State transmission infrastructure, along with greater storage capacity, would be critical to sustaining renewable energy additions. Apart from “transmission constraints”, other impediments included delays in firming Power Purchase Agreements, land acquisition, and distribution company finances.

The constraint comes even as India’s renewable energy pipeline remains substantial. ICRA said more than 150 GW of renewable projects were under construction as of June 30 this year. It estimates that renewable energy, including large hydro, will account for more than 35% of electricity generation by the financial year 2029-2030, compared with 22% in 2024-2025.

Grid adequacy is key

However, bids for new renewable energy projects have slowed sharply. After 40.6 GW was awarded in 2024-25, awards fell to 14.7 GW in 2025-26 and stood at 4.7 GW through August 10 this year. ICRA also estimated that 40 GW to 45 GW of capacity with bids awarded remained without signed PPAs as of April 2026.

Mr. Kadam said the nature of new bidding was also changing, with less emphasis on conventional solar and wind and greater focus on firm and dispatchable renewable energy (FDRE) and round-the-clock (RTC) power. The increasing importance of “grid adequacy” is reflected in the agency’s assessment that transmission and storage will determine whether the existing pipeline can increase power generation.

ICRA nevertheless retained a “stable outlook” for India’s renewable energy sector, citing policy support and competitive tariffs.

Published - August 19, 2026 08:03 pm IST