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New Delhi: India’s power transmission sector is on the cusp of a massive expansion, with an estimated ₹10 lakh crore investment required to double the country’s power capacity to 900 GW by 2032. A recent report by Avener Capital states that the sector’s transformation is being driven by India’s energy goals of achieving energy independence by 2047 and net zero emissions by 2070, creating substantial opportunities and challenges.

India’s transmission capacity, currently at 2,530 GVA, is set for a fivefold increase over the next eight years. The surge in demand will largely be met through Tariff-Based Competitive Bidding (TBCB) mechanisms, which now account for over 90% of transmission projects awarded under Public-Private Partnership (PPP) models. This shift underscores the government’s push towards attracting private investment to build critical infrastructure, with TBCB becoming a preferred model for transparency and price discovery.

The report highlights that to meet rising energy demands and sustainability targets, India’s grid capacity will need to accommodate vast renewable additions, with major solar and wind installations planned across key states. Rajasthan leads with a projected 115 GW, followed by Gujarat with 42 GW, and Andhra Pradesh with 59 GW. These projects form part of the government’s “One Grid, One Nation” initiative, designed to unify India’s grid and create a seamless national transmission network.

The report also notes a significant evolution in India’s regulatory framework over the past two decades, aimed at promoting private sector participation in transmission. The Electricity Act, National Tariff Policy, and various guidelines have enabled an investor-friendly environment. By offering incentives for efficient project execution, the government hopes to attract more foreign investment, especially as annuity revenue models make these projects appealing for long-term investors.

Growth drivers in the sector include the exponential rise in electricity demand, spurred by the government’s Make in India initiative, expanding semiconductor manufacturing, and cross-border electricity trade. The push for sustainability, alongside infrastructure needs such as electric vehicle charging stations and offshore wind power, will further increase transmission capacity demands. The report projects that grid modernization will play a crucial role, with technologies like AI, digitalization, and smart grids set to optimize power flow and increase grid reliability.

"The focus on renewable energy and infrastructure targets has positioned India’s power transmission sector at a critical juncture," the report states, underlining that modernization efforts, along with efficient financing models, are essential to meet these high-capacity goals. TBCB has emerged as a game-changer, driving competitive procurement, enhancing project quality, and expediting execution timelines.

In addition to funding, the report identifies challenges such as land acquisition, right-of-way issues, and environmental clearances, which can cause project delays. The sector's reliance on technology and automation will also be essential to overcome operational challenges, especially in regions with complex geographies.

India’s ambitious transmission expansion aligns with its goal to become a developed nation by 2047, for which robust infrastructure is essential. As part of its roadmap, India’s power consumption per capita is projected to rise significantly, from the current 2,519 kWh to meet international standards. Avener Capital’s analysis concludes that the power transmission sector is prepared to capitalize on these transformative opportunities, positioning India as a leading market for sustainable energy investments.