With renewables overtaking coal-based sources in India’s installed power capacity, concerns are growing around intermittency, grid stability, and power balancing as solar and wind power injection increases. Solar-heavy states such as Rajasthan and Gujarat are already facing rising risks of curtailment and transmission congestion.

Developers say technologies such as Automatic Generation Control (AGC) and grid-forming inverters, along with storage deployment and transmission expansion, will become increasingly important to maintaining grid reliability, efficiency, and resilience as renewable penetration rises.

While AGC can stabilize the grid by automatically adjusting generation or battery output to balance supply and demand and maintain frequency, grid-forming inverters can provide rapid voltage and frequency support by mimicking conventional generators. This helps renewable-heavy grids remain stable during disturbances.

According to data from the Central Electricity Authority, the Ministry of New and Renewable Energy, and Mercom’s India Solar Project Tracker, India’s renewable energy capacity, including large hydroelectric projects, made up 51.7% of the country’s cumulative power capacity, with 276.5 GW installed at the end of the first quarter of 2026.

The push for grid stabilization comes amid Grid India highlighting 68 instances of renewable energy generation losses exceeding 1 GW between 2022 and 2025 across large renewable energy complexes, primarily due to inadequate reactive support and fault-ride-through failures.

For instance, over three days in August 2024, India’s electricity grid experienced persistently high frequencies above the 50.05 Hz ceiling for 26% to 38% of the time.

While AGC and grid-forming (GFM) technology offer significant operational advantages, they also present implementation challenges. Their integration can impose additional financial burden on developers already dealing with grid constraints, energy curtailment, and policy uncertainty.

In two discussion papers published last year, GRID India explored extending GFM requirements to all new battery energy storage systems above 50 MW located in weak-grid or remote areas. Another paper examined the expansion of AGC to renewable energy projects above 100 MW for secondary reserve ancillary service down-regulation.

In another push for GFM adoption, GRID India proposed to the Central Transmission Utility that all new battery energy storage systems exceeding 50 MW be required to include grid-forming capability upon connectivity approval.

Developers say renewable energy projects equipped with grid-forming inverters and AGC can deliver power in a more stable and dispatchable manner, which will be essential for India’s transition to a high-renewable power system.

Ashutosh Vyas, Head – Energy Business (Utility) at Hero Future Energies, said the combination of GFM and AGC enables fast local responses to grid disturbances while supporting coordinated system-level control.

He explained that GFM can act within milliseconds to establish voltage and frequency, provide synthetic inertia, and limit the rate of change of frequency under weak-grid conditions. AGC, on the other hand, operates over longer timeframes and helps maintain a continuous supply-demand balance by optimizing dispatch and restoring system frequency to nominal levels.

Krishnan C Menon, General Manager and Head of Engineering and Design at Radiance Renewables, said grid-forming inverters help maintain grid stability during disturbances. He explained that conventional grid-following inverters track the existing grid frequency while continuing to inject power. In contrast, grid-forming units actively support the grid by helping control voltage and stabilizing frequency.

This makes grid-forming inverters the first line of defense during grid disturbances, especially in weak-grid conditions or in systems with high renewable energy penetration.

Industry experts say integrating GFM at the generation level can reduce reliance on traditional baseload power plants. These technologies can help the grid manage the renewable energy variability more effectively, making the power system more flexible and reliable.

Siddharth Bhatia, MD and CEO at AB Energia, said grid-forming inverters and AGC together represent a shift from passive renewable generation to active grid participation.

Such grid innovations could be a game-changer for the renewable energy sector, which continues to face significant curtailment, especially in high-irradiance states where grid constraints limit power evacuation.

Developers say that, based on current renewable energy projections, India’s grid capacity may need to grow by 2x to 2.5x its current size by 2050.

According to the Central Electricity Authority, India plans to expand its transmission network by 137,500 circuit km of lines and 827,600 MVA of substation capacity at an estimated cost of ₹7.93 trillion (~$84.33 billion) to support 900 GW of non-fossil fuel capacity by the financial year 2035-36. However, against the cumulative target of 15,382 ckm of transmission lines for April 2025 to March 2026, India achieved 12,139 ckm, accounting for 78.9% of the target.

Vyas noted that as renewable energy deployment accelerates, grid expansion must keep pace across transmission capacity, system strength, and operational flexibility. He added that technologies such as AGC and GFM can help optimize the utilization of existing infrastructure.

Developers said these technologies may not eliminate the need for physical grid expansion. However, they can help the system absorb higher levels of renewable energy more efficiently while accelerating energy transition without requiring proportionate increases in grid infrastructure investment.

They also noted that such integrations can reduce renewable energy curtailment, improve power transfer capability, and delay the need for additional grid infrastructure investments.

Additional Financial Burden

While integrating GFM and AGC offers significant benefits for grid stability and higher renewable energy injection, it also increases project costs.

Developers estimate that these technologies can raise project capital expenditure by 5% to 8%. However, they said the additional cost could be offset over time through lower curtailment and reduced ancillary service expenses.

Vyas highlighted that as the market shifts toward hybrid, round-the-clock, and firm power solutions, these capabilities are likely to become essential components of project viability rather than optional additions. “In the long run, they improve bankability and long-term returns by making renewable projects more dependable and future-ready.”

However, he added that the cost premium could remain a constraint for purely energy-arbitrage projects operating on tighter margins.

To encourage adoption, developers say renewable projects investing in AGC and GFM should be compensated through clear mechanisms. These could include performance-based incentives for accurately meeting grid requirements, payments for ancillary services, capacity payments, or dedicated provisions in power purchase agreements that recognize the costs of these technologies.

Challenges

Despite their potential benefits, several challenges remain in implementing these technologies. These include limited retrofitting capability for existing renewable energy projects, the need for grid-side upgrades, and limited domestic manufacturing capability.

Developers said integrating these solutions into existing renewable energy projects could be relatively straightforward. However, grid interconnection may still require broader upgrades to the transmission and control systems.

Vyas said AGC can be integrated into renewable energy projects relatively easily by upgrading plant controllers, communication networks, and software logic, enabling projects to respond to grid operator instructions automatically. He added that GFM is better suited to existing solar or wind projects paired with storage systems.

However, effective deployment will also require stronger real-time monitoring systems, enhanced grid controls, and faster operational response capabilities to manage fluctuations in supply, demand, and grid conditions.

Another major challenge is domestic manufacturing readiness. India’s capability to manufacture grid-forming inverters and AGC-enabled systems is evolving but remains underdeveloped.

In February 2026, the CEA asked inverter manufacturers to disclose their domestic production capacity for grid-forming inverters to assess India’s manufacturing readiness.

Developers pointed out that India still relies heavily on global original equipment manufacturers for advanced grid-forming controls, high-end power semiconductors, and real-time control software.

They also highlighted India’s limited domestic experience in large-scale system integration, testing, and validation of grid-forming behavior under weak-grid conditions, capabilities which are critical to ensuring reliable deployment.

Renewable energy developers say the adoption of GFM and AGC will largely depend on regulatory reforms that mandate or incentivize their integration.

Effective adoption will require clearly defined grid-forming requirements in grid codes, along with broader frameworks that enable inverter-based resources to participate in AGC and ancillary service markets. The government will also need to establish a clear revenue mechanism for grid-stability services provided by renewable energy projects.