3.1 Short-term operational improvements
Several operational reforms can be implemented to address evacuation constraints and the resulting renewable energy curtailment. These measures can help bridge the immediate gap while enabling the broader course correction needed to better synchronise generation and transmission planning.
Beginning the process of decongesting ISTS corridors
Over the last 4–5 years, India’s renewable energy capacity additions have become increasingly concentrated in a few states, particularly Rajasthan and Gujarat. This has been driven by factors such as ISTS transmission charge waivers, relatively easier access to large land parcels, and the development of structured grid connectivity procedures. While this concentration has improved economies of scale and enabled the development of large-scale renewable projects at record-low prices, the model is increasingly running into transmission buildout and evacuation constraints.
A number of operational reforms can improve investment interest in intra-state (InSTS) transmission networks and support a more decentralised renewable energy buildout closer to demand centres. For instance, compensation mechanisms linked to curtailment under emergency TRAS currently apply mainly to ISTS-connected plants. This creates a distorted incentive structure that encourages more concentration within ISTS corridors. A more uniform curtailment and compensation framework across both ISTS and InSTS connected projects could help reduce this imbalance.
Transmission and connectivity planning at the state level also requires significant administrative improvement. This includes clearer long-term planning visibility and better disclosure around connectivity allocation processes, associated charges, and updated substation capacity availability. Currently, only a few states have well-documented systems and publicly available data on these aspects. This remains a major barrier for planning project development.
Using batteries for transmission-as-a-service
Given batteries’ role as the “multitool” of the power sector transition, innovative use cases can unlock additional value, with transmission-as-a-service being one such application to help manage grid congestion.
The average curtailment across key renewable energy zones in the Northern and Western regions has been around 6–8 GWh, with occasional spikes to higher levels. Under typical conditions, absorbing most of the curtailed energy linked to T-GNA constraints would require roughly 3–4 GW of battery energy storage systems (BESS) with a 2-hour duration. This is not a small requirement, particularly against India’s BESS target of 34.7 GWh by FY2027.
Most existing BESS targets primarily consider its role in balancing demand and supply, and often overlook use cases that may appear unconventional but can still offer strong commercial value.
BESS deployed specifically for congestion management could deliver significant system-level benefits. This includes absorbing power from stranded renewable energy assets that face evacuation constraints and deferring capital expenditure on new transmission infrastructure in the near term — creating a multipronged benefit. However, existing market and regulatory structures create several bottlenecks that could limit such deployment without dedicated regulatory support.
Standalone BESS developers face uncertainty in contracting with projects under T-GNA, as these plants transition to full connectivity within a few months, making such arrangements of very short-duration. Additionally, long-term PPAs still largely anchor India’s power market, making it difficult to finance storage projects that rely on merchant revenue or short-term power purchase contracts. While some BESS deployment may emerge given that market-based arbitrage opportunities are attractive, scaling this model is likely to be uncertain without clearer long-term revenue visibility. Additionally, current regulations governing non-solar hour GNA restrict BESS assets from procuring power from the exchanges, therefore limiting operational flexibility. Collectively, these factors constrain the deployment of standalone BESS towards addressing grid congestion.
There are several regulatory pathways of how BESS can function as a virtual transmission augmentor by bridging short-term evacuation gaps.
One potential structure for enabling BESS deployment is through an intermediary entity, for instance as the CTU or a CTU-backed institution. Given its visibility on upcoming capacity additions and transmission constraints, such an entity could aggregate power from projects facing T-GNA restrictions and contract it with BESS developers, on a back-to-back basis – similar to what SECI does for long-term power purchase agreements. This would provide power supply certainty for BESS operators, removing the need to repeatedly identify and contract with individual plants as they enter and exit the T-GNA queue.
The second alternative can be deploying BESS as a transmission asset. This model can mirror how transmission infrastructure is developed and remunerated, with storage assets treated similarly to other grid elements – like transmission schemes or substations. The cost recovery can follow a capacity payment mechanism, apportioned across states based on their demand (GW), much like existing transmission cost recovery. It removes commercial risk for BESS developers by ensuring fixed capacity payments, while also avoiding the need for a single counterparty to contract the asset, as costs are socialised across grid participants.
Under either structure, BESS assets participating in such procurement frameworks could be mandated to absorb curtailed T-GNA-linked renewable generation on a priority basis, while retaining flexibility to source additional power from bilateral contracts or power exchanges whenever spare charging capacity is available. BESS developers should retain the flexibility to discharge power through the most value-accretive avenues like bilateral PPAs, power exchanges, and ancillary service markets. Such operational flexibility would improve BESS asset utilisation and also maximise the value of otherwise curtailed energy.