Power Transmission Execution Risks Threaten Renewable Evacuation
POWER & RENEWABLE ENERGY

Power Transmission Execution Risks Threaten Renewable Evacuation

Icra has warned that power transmission projects face execution risks from land acquisition, right of way (RoW) and regulatory approvals, affecting timelines and renewable energy (RE) evacuation. It expects capacity addition uptick as the country gears up to integrate RE capacity. The agency estimated sector capital expenditure (capex) of Rs five to six trillion (tn) between 2026-27 and 2031-32. Delays lead to grid curtailment issues for developers and dent returns.

Icra said most transmission projects awarded by central nodal agencies via tariff-based competitive bidding (TBCB) have been delayed beyond the scheduled commissioning date (SCOD). Of projects commissioned by March 2026 under this route, only 12 per cent were completed on time; the remainder were finished with lags ranging from two months to three years, with a median delay of over 10 months. Such slippage constrains the timely addition of evacuation infrastructure.

The agency cautioned that land acquisition and RoW constraints, together with regulatory clearances, remain primary execution bottlenecks for contractors and developers. These hurdles increase financing costs and contractual disputes and complicate project management across regions. Icra indicated that the resulting transmission shortfalls raise the likelihood of curtailment episodes for renewable generators.

Icra envisages a significant rise in transmission capacity requirements as the grid prepares for higher renewable penetration, but it stressed that realising announced capex will require smoother permitting and enhanced coordination among central and state agencies. It urged stakeholders to prioritise right of way planning and expedited approvals to limit implementation delays and protect returns for renewable energy investors. Without improvements, the agency warned that persistent execution risks could hinder the pace of grid modernisation.

The assessment noted that delays often translate into higher carrying costs and strained contractor resources during protracted construction phases. Stakeholders will need to align land acquisition schedules with transmission timelines to reduce mismatches.

Icra has warned that power transmission projects face execution risks from land acquisition, right of way (RoW) and regulatory approvals, affecting timelines and renewable energy (RE) evacuation. It expects capacity addition uptick as the country gears up to integrate RE capacity. The agency estimated sector capital expenditure (capex) of Rs five to six trillion (tn) between 2026-27 and 2031-32. Delays lead to grid curtailment issues for developers and dent returns. Icra said most transmission projects awarded by central nodal agencies via tariff-based competitive bidding (TBCB) have been delayed beyond the scheduled commissioning date (SCOD). Of projects commissioned by March 2026 under this route, only 12 per cent were completed on time; the remainder were finished with lags ranging from two months to three years, with a median delay of over 10 months. Such slippage constrains the timely addition of evacuation infrastructure. The agency cautioned that land acquisition and RoW constraints, together with regulatory clearances, remain primary execution bottlenecks for contractors and developers. These hurdles increase financing costs and contractual disputes and complicate project management across regions. Icra indicated that the resulting transmission shortfalls raise the likelihood of curtailment episodes for renewable generators. Icra envisages a significant rise in transmission capacity requirements as the grid prepares for higher renewable penetration, but it stressed that realising announced capex will require smoother permitting and enhanced coordination among central and state agencies. It urged stakeholders to prioritise right of way planning and expedited approvals to limit implementation delays and protect returns for renewable energy investors. Without improvements, the agency warned that persistent execution risks could hinder the pace of grid modernisation. The assessment noted that delays often translate into higher carrying costs and strained contractor resources during protracted construction phases. Stakeholders will need to align land acquisition schedules with transmission timelines to reduce mismatches.

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