RE Bid Activity Drops 64% as Transmission Lag Continues
India's renewable developers bid for less than half the capacity they did a year earlier, and ICRA says demand is not the constraint. The grid is.
Renewable energy bidding activity in India fell to 14.7 GW in the fiscal year ending March 2026, down from 40.6 GW the previous year, according to ratings agency ICRA. The decline, reported August 19, is the clearest sign yet that transmission bottlenecks are no longer just curtailing power after projects are built. They are now shaping which projects get bid on in the first place.
The timing matters. Four days before this data emerged, the Central Electricity Regulatory Commission proposed transmission charge waivers for renewable and battery storage projects delayed by grid constraints, a direct regulatory response to the same problem ICRA's numbers now confirm at the bidding stage rather than only the commissioning stage.
The Bidding Slowdown
ICRA cited two causes for the drop: difficulty signing power purchase and power sale agreements, and transmission infrastructure that has not kept pace with generation capacity. Capacity addition itself is also projected to slow, from 50.9 GW in the last fiscal year to an estimated 45 GW in FY27, though far less sharply than the bidding collapse, since bids typically precede commissioning by one to two years.
Curtailment Mechanics
Projects without permanent grid connectivity rely on temporary general network access, an interim evacuation route used while permanent transmission is built. ICRA's July research found 33% of 54.8 GW of newly commissioned capacity relies on this route, with curtailment of 50 to 60% during solar hours. An updated August estimate put curtailment on affected substations at 30 to 50%, a lower range than the July figure. Climate Watch is noting the gap between the two ICRA snapshots rather than treating them as interchangeable.
Where the Investment Gap Sits
Only 12% of centrally awarded transmission projects were completed on schedule through March 2026, with a median delay exceeding ten months. ICRA estimates India needs Rs 5-6 trillion in transmission investment between FY27 and FY32, roughly 20,000 circuit kilometers of new lines and 120 GVA of substation capacity annually, to keep pace with renewable capacity already in the pipeline.
So What
The bottleneck is redistributing risk within the sector. Developers holding firm grid connectivity gain a relative edge, while projects dependent on temporary access face real revenue loss from curtailed generation they cannot sell. For investors, transmission execution, not generation capex, is becoming the metric that determines whether a project bid is worth backing at all.
"Continued grid curtailment episodes" are the likely result if transmission delays persist, said Ankit Jain, Vice President and Co-Group Head at ICRA.
The open question is whether Rs 5-6 trillion in transmission spending arrives fast enough to support ICRA's own forecast that renewable generation share, including large hydro, will cross 35% by 2029-30, up from 22% in 2024-25.
What to Watch
Watch FY27 capacity addition against ICRA's 45 GW estimate, whether transmission project completion rates improve past the current 12% on-schedule rate, and whether bidding activity recovers in the rounds following CERC's proposed waiver mechanism.
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