Rapid renewable growth boosts India's transmission infrastructure

The country’s green energy sector could add 90GW capacity by end-2025.

The Indian transmission infrastructure is projected to grow by over 25% from 2020 to 2025, mainly driven by the rapid growth in the renewable capacity that has suffered limited expansion due to lack of infrastructure, according to a GlobalData report.

It estimated that the infrastructure would need an investment amounting $27b-$34b (INR2-2.5t) over the period to bring the power evacuation infrastructure for modernizing aging infrastructure and new expansion to accommodate the power from new capacity build-up targets.

Furthermore, a steep reduction in renewable generation costs, conducive policy environment and availability of investment avenues have doubled the share of the Indian renewable capacity in the capacity mix to 23.4% at the end of March, from 11.8% at end-March 2015.

GlobalData estimated that the country’s renewable sector could add about 90GW capacity by end-2025, which the report noted may already seem unrealistic due to lack of power evacuation facilities. However, an expansion in the transmission infrastructure can open doors for further renewable capacity.

GlobalData’s practice head of power Ankit Mathur commented that the government’s multiple infrastructure projects under Green Energy Corridor (GEC) are facing significant delays due to the pandemic, and the India-China standoff has worsened the hurdles for solar PV expansion as China accounts for more than 80% of the solar equipment import.

Still, the recent growth of investors in the private sector has heightened competition from private companies for new tenders, which would help bring down the capital costs of the projects.

“In addition, the introduction of tariff-based competitive bidding for the selection of transmission developers will ensure project profitability and thus accelerates investments by the private sector,” Mathur said.