Why India’s Renewable Energy Expansion Depends on Grid and Storage Upgrades

India's renewable buildout is entering a bottleneck it cannot engineer around. According to rating agency ICRA, the country's renewable energy share is on track to exceed 35% of total electricity generation by 2029-30, up from 22% in 2024-25 — but only if transmission infrastructure and battery storage scale in lockstep with the roughly 150 GW pipeline now mid-construction.

The grid is the new ceiling

The numbers reveal momentum running straight into infrastructure limits. As of June 30, 2026, more than 150 GW of renewable energy projects were under construction, a pipeline that would be considered healthy in any market. Yet transmission has lagged generation capacity growth, producing real curtailment risk. Around 37% of capacity at impacted substations in India's North, West, and South regions operates under temporary general network access, known as T-GNA, and faces 30–50% curtailment during solar hours.

ICRA's Girishkumar Kadam, senior vice president and group head for Corporate Ratings, noted that curtailed assets erode project returns, which in turn slows the pace of additions. The bidding data already reflects the chill: 40.6 GW awarded in 2024-25, 14.7 GW in 2025-26, and just 4.7 GW awarded through August 10, 2026. Unsigned power purchase agreement capacity remained sizable at 40–45 GW as of April.

Storage steps forward

Battery energy storage systems are emerging as the stabilizer India needs. Total awarded BESS capacity — operational projects plus those under construction — reached roughly 90 GWh as of June 2026, a sharp increase over the prior 12 to 18 months. ICRA's cost math is telling as well: based on prevailing battery prices, the levelized cost of storage for two- to four-hour BESS projects runs INR 4–7/kWh, competitive with pumped storage hydropower at around INR 5/kWh.

The economics remain tight, however. With average battery costs of $70–75/kWh, total BESS capital costs land in the $110–130/kWh range. Falling battery prices have already catalyzed aggressive bidding in standalone storage tenders, a sign that competitive pressure could compress margins faster than costs decline. Viability gap funding and extended transmission charge waivers, valid through June 2028, are helping underwrite the buildout.

What to watch next

Three indicators will determine whether India's next renewable phase holds its trajectory: timely execution of intra-state and inter-state transmission projects to ease T-GNA curtailment, the pace of BESS capacity additions leveraging current policy support, and resolution of the 40–45 GW unsigned PPA overhang. The generation pipeline is real. Whether the grid is ready to absorb it is the variable that now decides the outcome.