New Delhi: India's power transmission sector is headed for a multi-year investment cycle, with ICRA estimating an opportunity of at least Rs 5-6 trillion between 2026-27 and 2031-32 to evacuate the renewable energy (RE) capacity being added to the grid. The projected capex will be driven by the government's plan to evacuate power from over 900 GW of non-fossil fuel capacity by 2035-36, of which about 548 GW is solar and wind, the rating agency said.
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To reach close to the target set under the National Electricity Plan-II, ICRA estimates the sector needs to add roughly 20,000 circuit kilometres (ckm) of transmission lines and 120 gigavolt-amperes (GVA) of sub-station capacity every year.
The build-out, however, is lagging RE capacity addition, leaving generators exposed to grid curtailment that erodes their returns.
Ankit Jain, Vice President and Co-Group Head at ICRA Limited, said, "The projected transmission capex of Rs 5-6 trillion entails strengthening of the existing infrastructure, adding evacuation capacities as well as new transmission routes to support the generation centres."
Outstanding orders and order inflows for key equipment suppliers to the transmission sector more than doubled in 2025-26 compared with 2021-22, ICRA noted, and the capex surge is expected to keep inflows healthy. But it flagged supply-side constraints — limited manufacturing capacity and a shortage of skilled manpower — that could hold up execution unless equipment makers scale up.
ICRA said projects awarded through the tariff-based competitive bidding (TBCB) route have largely slipped past their scheduled commissioning dates.
Jain said, "Power transmission projects continue to face significant execution risks owing to challenges in acquiring land, ROW related issues and regulatory approvals, leading to delays in timely implementation. Most transmission projects awarded by the central nodal agencies through the tariff-based competitive bidding (TBCB) route have been delayed beyond their scheduled commissioning date (SCOD) due to these challenges. Out of the total projects commissioned by March 2026 under this route, only ~12 percent was done within the scheduled timeline, while the balance was commissioned with a lag of two months to three years, with the median delay of over 10 months."
The curtailment is concentrated in high-RE regions where evacuation infrastructure is not yet fully operational. Jain said, "Out of the recently commissioned total RE capacity of 54.8 GW, ~33 percent is being evacuated under T-GNA route at an all-India level as of May 2026. Further, the curtailment under TGNA is the highest during solar hours and has remained in the range of 50-60 percent during the same period. These instances are more prominent in Rajasthan and Gujarat, while curtailments in the southern region remain limited even in the solar hours."
A pipeline of about 107 GW across solar, wind, hybrid, hydro, pumped storage and thermal, all already granted connectivity, is due to be integrated into the inter-state transmission system (ISTS) between 2026-27 and 2030-31.
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Jain concluded: "As seen in the past, slippages in achieving timely commissioning of the upcoming transmission infrastructure cannot be ruled out, which could impact RE capacity additions or result in continued grid curtailment episodes for the RE players, materially impacting the return metrics of the RE projects."