Rapid Renewable Growth Strains Power Grid & Raises Costs Amid Soft Demand: CEA

New Delhi, Nov 7 (KNN) India’s accelerated rollout of renewable energy capacity is placing stress on the power grid and contributing to higher electricity supply costs, amid a slower-than-expected rise in demand, a senior Central Electricity Authority (CEA) official said on Friday.

CEA Chairperson Ghanshyam Prasad, speaking at a forum hosted by The Energy and Resources Institute (TERI), noted that the country’s renewable capacity additions in the first half of 2025 were the fastest since 2022. 

India has already reached a milestone of sourcing half of its installed power capacity from non-fossil fuel sources and aims to add 500 GW of such capacity by 2030.

However, Prasad cautioned that India’s current approach—building transmission infrastructure based on expected renewable generation rather than actual capacity utilisation or demand—has driven a sharp rise in transmission charges, raising concerns among state distribution utilities, according to Reuters.

With transmission networks being prepared in advance of confirmed demand, grid absorption remains uncertain, he said, resulting in some renewable projects lacking power purchase agreements.

India is expected to add more than 40 GW of renewable capacity this year, but “without demand, the surplus would be very difficult to manage,” Prasad observed. 

He warned that developers could face situations where clean-power capacity is built but cannot be evacuated or sold.

To manage the challenge, the CEA will revise transmission plans every six months to better align with real-time capacity expansion trends and is collaborating with the India Meteorological Department to enhance localised forecasting for wind and solar generation. 

Prasad also called for robust resource adequacy planning at both national and state levels to help distribution companies anticipate requirements and contract capacity accordingly.

While affirming India’s commitment to renewables, Prasad stressed that maintaining grid reliability would require continued investment in coal, nuclear, hydro and gas-based capacity. 

(KNN Bureau)