According to the recently published report by SBI Capital Markets (SBICAPS), the Indian power sector is undergoing a significant transformation to integrate renewable energy and enhance transmission capabilities. The report, titled “Transmission as a Counter-Balance to Evolving Regional Balance of Power,” emphasizes the need for robust investments and infrastructure to meet ambitious targets by FY2032.
Key insights from the report include a notable surge in renewable energy additions, with over 30 GW of capacity added in the past 12 months. Solar power leads this growth, contributing two-thirds of the additions, while wind energy has seen a resurgence after years of stagnation. However, the report raises concerns about the readiness of power evacuation infrastructure, particularly in remote areas such as Rajasthan and Ladakh.
The report underscores the shifting geographical balance in energy production. With the North and South regions accounting for a lion’s share of renewable capacity, the Western region, despite being a significant consumer, will see a relative decline in its share of installed capacity. This shift necessitates a doubling of annual transmission line additions and substation capacities to ensure seamless power flow between regions.
Funding emerges as a pivotal challenge, with an estimated ₹8.2 trillion required by 2030 for transmission upgrades. SBICAPS highlights the role of diverse funding mechanisms, including bank loans, bonds, and Infrastructure Investment Trusts (InvITs), to address this financial demand. Notably, 40% of the investment is required within the next 30 months to meet short-term goals.
The report also provides a broader perspective on the energy demand trajectory, noting a recovery post-pandemic but tempered by factors such as abundant monsoons and industrial slowdowns. With a peak demand of 250 GW recorded in May 2024, the power sector faces the dual challenge of balancing immediate needs while planning for long-term growth.
By leveraging robust planning and diverse financial instruments, India aims to achieve its ambitious target of 500 GW of renewable energy capacity by 2030. The findings of the SBICAPS report highlight the critical need for a coordinated approach to infrastructure development to bridge regional imbalances and align with the country’s renewable energy ambitions.
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