India will need an investment to the tune of $60-80 billion over the next five years in grid infrastructure to accommodate its tremendous growth in renewable energy capacity, said a brief note published by the Institute of Energy Economics and Financial Analysis (IEEFA).

The note highlights that India’s growing renewable energy additions are outgrowing the grid capacity. India’s transmission network capacity grew at a compounded average growth rate (CAGR) of 12 percent between FY 2013-14 and 2017-18.  It also says that slowdown in wind power commissioning during the last two years is mainly due to structural limitations of its national transmission grid.

The IEEFA has examined the investment progress of three transmission companies – Power Grid Corporation of India, Adani Transmission, and Sterlite Power, over the last year.

It found that Power Grid Corporation has added 9,072 circuit km (ckm) of extra high voltage transmission lines, and 41,620 Mega Volt Ampere (MVA) transformation capacity with 15 new substations in the FY 2017-18. Adani Transmission commissioned 3,150 ckm of transmission line in FY 2017-18, a growth of 58 percent. Sterlite Power has won 30 percent of the total capacity awarded through bidding routes in recent year and commissioned a 414 ckm transmission line in Jammu and Kashmir two months in advance of deadline.

According to the report, building inter-regional transmission capacity between renewable-rich zones is needed for transmitting power from energy surplus states to deficit states.

“Greater deployment of renewable energy is a key enhancement of Indian energy security. Given the best renewable energy resources are predominantly located in just eight states including Rajasthan, Jammu & Kashmir, Gujarat, Karnataka, Madhya Pradesh, Tamil Nadu, Maharashtra, and Andhra Pradesh, inter-regional transmission capacity for transmitting power from energy surplus states to deficit states will also be needed, as well as better load balancing capacity”, said Tim Buckley, Director of IEEFA.

The note suggests that grid infrastructure is as equally important investment opportunity as the renewable energy sector is in India. A robust grid infrastructure will minimize grid curtailments for renewable power and save renewable assets from financial risks.

Earlier, Mercom reported how the transmission availability may make or break India’s mega solar tenders.

In November 2018, Mercom published a report on solar curtailment issues. States like Tamil Nadu, Andhra Pradesh, Karnataka, among others are facing curtailment somewhere between 10 and 25 percent.