Page 52 - Policy Economic Report - October 2025

POLICY AND ECONOMIC REPORT
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Such transitions take time to yield visible capacity figures, but they represent lasting structural progress,
the kind that underpins a robust energy future.

Transmission Reforms Poised to Unlock Over 200 GW of Renewable Potential

Transmission has emerged as the new frontier. India’s grid is being reimagined through the ?2.4 lakh
crore Transmission Plan for 500 GW, linking renewable-rich states with demand centres. The
Government is prioritizing investment in transmission infrastructure through the Green Energy Corridors
and new high-capacity transmission lines from Rajasthan, Gujarat, and Ladakh. While these projects are
multi-year efforts, once operational they will unlock over 200 GW of new renewable capacity. The
current stage is therefore temporary - a transition lag, not a structural ceiling. Government has already
planned for building HVDC corridors and boosting inter-regional transmission capacity from 120 GW
today to 143 GW by 2027, and 168 GW by 2032.

Additionally, the recent amendments to the CERC General Network Access (GNA) Regulations, 2025
have significantly improved the outlook for transmission readiness. The introduction of time-segmented
access— ‘solar-hours’ and ‘non-solar-hours’— allows dynamic sharing of corridors between solar, wind,
and storage projects, unlocking idle capacity and easing congestion in RE-rich states. Provisions for
source flexibility, stricter connectivity norms, and greater substation-level transparency further
streamline grid access and curb speculative allocations. These reforms mark a decisive step toward
optimising transmission utilisation and fast-tracking stranded renewable projects, directly addressing
one of the sector’s core implementation challenges.

India Remains a Magnet for Clean Energy Capital

Despite short-term delays, India remains a magnet for clean energy capital. Renewable tariffs continue
to be among the lowest globally, ensuring long-term competitiveness. India continues to be one of the
most attractive destinations for investment in clean energy sector, and international interest remains
high. Global investors are not exiting India; they are repositioning towards integrated and storage-
backed portfolios. The sector’s fundamentals — strong demand growth, policy continuity, and cost
competitiveness — remain firmly intact.

The Real RE Story: From Expansion to Integration

The deeper story is one of evolution, not erosion. India’s clean energy transition is entering a phase
where the core challenges are about integration, reliability, and scale efficiency. A temporary flattening
of project pipeline in this context is a mark of maturity. The sector is doing the harder work now —
synchronising renewables with grid infrastructure, financial discipline, and long-term market design.

To complement physical grid expansion, Virtual Power Purchase Agreements (VPPAs) and other market-
based instruments will play a pivotal role in accelerating renewable energy deployment. VPPAs allow
corporate and institutional buyers to contract renewable power virtually—decoupling procurement
from physical delivery—thereby deepening demand, providing price certainty to developers, and
stimulating private investment in projects awaiting grid connectivity. Coupled with green attribute
trading, market-based ancillary services, and day-ahead and real-time market integration, these

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