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India's power transmission sector is expected to witness a major investment cycle over the next few years as the country expands its renewable energy capacity. However, Icra has cautioned that persistent issues such as land acquisition, right of way (RoW) disputes and regulatory approvals continue to delay project execution. Most transmission projects awarded through the tariff-based competitive bidding (TBCB) route have missed their scheduled completion timelines, affecting renewable energy evacuation and increasing the risk of power curtailment for developers.
India's power transmission sector continues to face execution-related challenges, with land acquisition, right of way (RoW) issues and regulatory approvals delaying the completion of several projects, according to a recent note by Icra.
The ratings agency said these delays are affecting project timelines and creating grid curtailment issues for renewable energy (RE) developers, which in turn impact their project returns. As India prepares to add large-scale renewable energy capacity to the national grid, timely expansion of the transmission network has become increasingly important.
Icra expects a sharp rise in transmission capacity addition over the coming years to support the country's clean energy targets. It has estimated that the sector will require capital expenditure of INR 5 lakh crore to INR 6 lakh crore between FY2027 and FY2032 for the development of new transmission infrastructure.
Despite the strong investment outlook, the agency said execution risks remain a key concern. Delays linked to land acquisition, RoW clearances and regulatory approvals continue to slow project implementation and postpone the commissioning of transmission assets.
Icra's Vice President and Co-Group Head, Ankit Jain, said that power transmission projects continue to face significant execution risks because of difficulties in acquiring land, resolving RoW-related issues and obtaining regulatory clearances, resulting in delays in timely implementation.
He further noted that most transmission projects awarded by central nodal agencies through the tariff-based competitive bidding (TBCB) route have been commissioned later than their scheduled commissioning dates due to these challenges.
According to Icra's analysis, among all TBCB transmission projects commissioned by the end of March 2026, only 12 per cent were completed within their scheduled timelines. The remaining projects were commissioned with delays ranging from two months to three years, with the median delay exceeding 10 months.
The report added that slower transmission capacity addition affects the evacuation of electricity generated by renewable energy projects. This increases the risk of grid curtailment, where renewable power generation has to be reduced because adequate transmission infrastructure is not available to carry electricity to demand centres.
India has been accelerating renewable energy capacity addition to achieve its clean energy goals, with parallel investments in transmission infrastructure being considered essential for integrating new solar and wind projects into the national grid. The government has also been expanding the use of the TBCB route to attract private investment in transmission projects, although execution bottlenecks have continued to affect timely delivery.
Source PTI
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