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Timely Transmission Infrastructure Key to 75 GW Renewable Surge by FY27

India is poised to add around 75 GW of renewable energy (RE) capacity during FY26 and FY27, increasing total RE capacity to 233 GW by March 2027, according to Crisil Ratings. However, the timely availability of transmission infrastructure is critical to accommodate this rapid expansion. A Rs1 lakh crore capex plan for transmission buildout is underway, but challenges such as right-of-way issues, delayed approvals, and equipment shortages could slow progress.

Renewables, especially hybrid and storage-backed projects, are gaining prominence for their ability to deliver consistent round-the-clock power. Their share in new capacity additions is projected to rise to 37% in the coming two fiscals, up from 14% in the past two.

While RE capacity typically gets commissioned faster than thermal power, insufficient evacuation infrastructure can create bottlenecks. Debt levels in the sector will increase due to high capital needs, but stable cash flows and operating performance are expected to keep debt-to-EBITDA ratios around seven times, with healthy debt service coverage of 1.2–1.3x.

Tender activity in Q1 2025 slowed due to unsigned power purchase agreements (PPAs) and power sale agreements (PSAs), compounded by land and grid connectivity delays. Under-subscription in RE tenders rose significantly, reaching 8.5 GW in 2024—five times higher than the previous year.

Industry experts warn that domestic module shortages and high prices continue to hamper execution. Minister for New & Renewable Energy, Pralhad Joshi, has urged state governments to accelerate PPA signings to avoid further delays in the RE rollout.