ABSTRACT
India aims to boost non-fossil fuel-based electricity generation to 500 GW by 2030, relying on robust transmission infrastructure. The surge in new generation, mainly from renewables, underlines the urgent need to fortify the country’s transmission network, addressing efficiency and renewable source intermittency. Integrating variable RE sources into the energy mix poses challenges for grid stability, exacerbated by grid congestion, especially in the Western region due to increased RE influx.
However, significant financing challenges plague the transmission sector, with banks hitting exposure limits, constraining lending and liquidity. Regulatory hurdles, including ambiguous exposure norms for insurers and pension funds, impede innovative financing. Streamlining regulations is crucial for unlocking potential in such models. Collaborative efforts between banks and developers are vital for devising viable funding structures, especially during construction. Developing realistic bidding mechanisms is crucial for the sector’s long-term sustainability.
This chapter develops a financing framework to support robust transmission infrastructure, aligning financial incentives with RE expansion and grid reliability goals, addressing the financing gap and prioritising strategic investments for India’s transition to a sustainable energy landscape.
