Green Energy Corridor Phase III: Strengthening India’s Renewable Power Grid

Context

The Union Cabinet has approved the Green Energy Corridor Phase III (GEC-III) scheme to expand intra-state transmission infrastructure and improve the integration of renewable energy into India’s electricity grid. The initiative aims to address transmission bottlenecks and support the country’s clean energy transition.

Green Energy Corridor Phase III: Objectives and Key Features

The Green Energy Corridor (GEC), implemented under the Ministry of New and Renewable Energy (MNRE), aims to develop dedicated transmission networks for evacuating electricity generated from large-scale solar and wind projects.

• Capacity expansion: The third phase aims to strengthen intra-state transmission systems to facilitate the evacuation of up to 135 GW of renewable energy and integrate 50 GWh of Battery Energy Storage Systems (BESS) by FY 2032–33.
• Financial allocation: The scheme envisages approximately ₹1.36 trillion for intra-state transmission infrastructure and ₹50,000 crore for battery storage deployment.
• Implementation mechanism: New transmission projects will be awarded through Tariff-Based Competitive Bidding (TBCB), while upgrades to existing infrastructure will follow a cost-plus approach.
• Institutional responsibility: State Transmission Utilities (STUs) will coordinate implementation at the state level.
• Shift in planning priorities: Earlier phases concentrated on inter-state and inter-regional power transfer. GEC-III focuses more on strengthening transmission networks within renewable-rich states such as Gujarat, Rajasthan, Madhya Pradesh and Andhra Pradesh.

This transition is intended to ensure that renewable electricity generated within states can reach consumers without being constrained by inadequate local transmission capacity.

Why Is Transmission Infrastructure Lagging Behind Renewable Energy Generation?

India’s renewable energy capacity has expanded rapidly, but the development of transmission networks has not always kept pace.

1. Differences in Project Completion Timelines

Solar power projects can often be commissioned within 12–18 months, whereas transmission lines and substations may require two years or longer because of land acquisition, regulatory approvals and construction challenges. This creates a mismatch between generation readiness and grid availability.

2. Congestion and Renewable Energy Curtailment

Inadequate transmission capacity restricts the amount of electricity that can be evacuated from renewable energy projects during periods of high generation.

• Nearly 21 GW of variable renewable energy capacity reportedly operated under the Temporary General Network Access (T-GNA) mechanism, of which around 12 GW faced significant evacuation restrictions during peak generation hours.
• Approximately 6,900 GWh of clean electricity was reportedly curtailed during FY 2025–26 because of insufficient transmission links.

Such curtailment results in the underutilisation of installed renewable capacity and reduces the economic benefits of investments in clean energy.

Role of Battery Energy Storage Systems in GEC-III

Battery Energy Storage Systems are intended to complement transmission infrastructure by improving the flexibility and reliability of renewable power integration.

• Managing variable generation: Batteries can store excess electricity generated during sunny or windy periods and supply it when renewable generation declines.
• Reducing peak congestion: Strategically located storage facilities can absorb surplus power during high-generation hours, easing pressure on existing transmission corridors.
• Improving grid flexibility: Storage can help balance electricity demand and supply, particularly during evening peak-demand periods when solar generation falls.
• Addressing deployment gaps: India’s operational BESS capacity stood at approximately 8.5–9.3 GWh by mid-2026, while the cumulative tender pipeline reportedly exceeded 281 GWh.

However, battery storage cannot replace the need for adequate transmission capacity. Its effectiveness depends on appropriate siting, grid connectivity and commercially viable operating arrangements. Storage projects should therefore be located at identified congestion points rather than allocated solely on the basis of proximity to renewable energy generators.

Major Challenges in Expanding Transmission Networks

1. Land Acquisition and Right-of-Way Disputes

Transmission infrastructure requires continuous corridors across different land parcels. Disagreements over compensation, local opposition and prolonged litigation can delay project execution and increase costs.

2. Environmental and Wildlife Protection

Transmission projects passing through ecologically sensitive regions must comply with environmental safeguards. For instance, restrictions on overhead power lines in parts of Rajasthan have complicated infrastructure development in the habitat of the critically endangered Great Indian Bustard (GIB).

3. Financial Constraints of State Transmission Utilities

Several STUs face financial pressures, delayed fund releases and institutional coordination problems. Weak project preparation and coordination between transmission agencies and distribution companies can further slow implementation.

4. Coordination and Regulatory Bottlenecks

Delays in forest clearances, land permissions and inter-agency approvals can prevent transmission infrastructure from becoming operational alongside renewable energy projects.

5. Limited Commercial Incentives for Storage

Uncertainty regarding battery revenue streams, ancillary services and long-term tariffs may discourage private investment in grid-scale storage, even when technical requirements are clearly established.

Way Forward

• Link Funding to Implementation Milestones: Central Financial Assistance should be aligned with land readiness, construction progress and commissioning targets to improve accountability and reduce stalled projects.
• Integrate Transmission Planning with PM Gati Shakti: Spatial mapping should identify potential transmission routes, environmental sensitivities and land-related constraints before projects are awarded.
• Establish Viable BESS Market Mechanisms: Clear tariff frameworks, ancillary service markets and long-term revenue arrangements can improve investor confidence in battery storage.
• Adopt Advanced Transmission Technologies: High-Temperature Low-Sag (HTLS) conductors and dynamic line rating systems can improve the utilisation of existing corridors. Underground cabling may be considered where technically and economically feasible in ecologically sensitive areas.
• Strengthen State-Level Institutions: Improving STU finances, technical capacity and coordination with distribution companies can accelerate implementation.
• Promote Ecological Safeguards: Early wildlife assessments, appropriate route selection and consultation with affected communities can reduce conflicts and avoid costly delays.
• Improve Coordination Between Generation and Transmission: Renewable energy projects and associated grid infrastructure should be planned and commissioned in a coordinated manner.

Conclusion

The Green Energy Corridor Phase III scheme addresses a critical challenge in India’s energy transition: generating renewable electricity is not sufficient unless it can be transmitted reliably to consumers. By combining stronger intra-state networks with strategically deployed battery storage, the initiative can help reduce renewable energy curtailment and improve grid flexibility. Its success will depend on timely execution, financially sustainable institutions, modern transmission technologies and a careful balance between energy infrastructure development and environmental protection.

Source : Down To Earth