India's renewable energy drive is putting pressure on its grid operations and driving up electricity costs, as the pace of capacity addition outstrips demand growth, Reuters reported, citing a senior official at the Central Electricity Authority (CEA) on November 7.

The country's renewable power generation recorded its fastest growth rate since 2022 during the first half of the year. 50% of India's installed power capacity comes from non-fossil fuel sources earlier this year, progressing toward its 2030 target of adding 500 GW.

However, Ghanshyam Prasad, chairperson of the CEA, noted that India's approach to building transmission infrastructure based on potential renewable generation rather than actual capacity or demand has resulted in sharply rising transmission charges, worrying state power plants.

These charges, typically paid by distribution companies to power producers, cover the costs of high-voltage electricity transmission networks.

Prasad indicated that India is projected to add more than 40 GW of renewable energy this year, noting that without corresponding demand growth, managing the surplus would prove challenging.

The mismatch between transmission readiness and renewable project commissioning creates uncertainty about grid absorption, leading to some renewable projects operating without power purchase agreements, he added.

To tackle these issues, Prasad stated that the CEA will update transmission plans every six months to reflect real-time developments. The authority is also collaborating with the India Meteorological Department to enhance localized weather forecasting for solar and wind generation.

He emphasized the importance of carefully planned grid integration and comprehensive resource adequacy planning at the national and state levels. This would allow distribution companies to forecast future needs and secure generation resources appropriately.

Without such planning, Prasad warned that clean energy developers might encounter situations where built capacity cannot be evacuated or sold.

To maintain grid security and reliability, he stressed that India must continue investing in coal, nuclear, hydro, and gas-based power alongside renewables.

The official concluded that unless the system is viewed holistically, encompassing planning, execution, grid operation and costs, the sector would face continued challenges.