Mumbai: India’s push to set up large renewable energy projects has given rise to a unique market for reselling connectivity to the grid, with some even looking to make a quick buck, three industry executives said.
Capacity to evacuate or transfer as much as 8-10 gigawatts of renewable power to the grid is available for purchase in the market, according to the executives cited above, who did not want to be identified. The capacity is being sold at a rate of ₹15-25 lakh per megawatt, they said.
India added about 18.5 gigawatts of renewable energy capacity in FY24 and has a total renewable capacity of about 153 gigawatts. Green power projects outpace the speed of adding new evacuation capacity—or infrastructure to transfer power from these plants to the Inter State Transmission System (ISTS) for distribution. That’s where the opportunity has cropped up.
The market comprises power producers looking to sell evacuation capacity due to changes in business plans as well as fly-by-night operators looking to make a quick profit. There are also engineering, procurement and construction (EPC) firms who would bid for evacuation capacity and resell it to power companies in exchange for a contract to develop the solar or wind energy plant, the industry executives quoted earlier said.
“If somebody is giving connectivity and land together, that is very valuable. Just connectivity at a good place (like Rajasthan) is also valuable,” said one of the executives. “It is a tricky transaction to conduct, regulation wise. But people have found ways to go around it.”
‘Evacuation capacity a scarce resource’
Evacuation capacity has become a scarce resource, especially in Rajasthan and north Gujarat, which receive among the highest solar irradiance in India and have affordable land.
The rights to transfer power to the grid are sold in advance before a substation comes up. A power project can apply for evacuation through the National Open Access Registry (NOAR). It can be done by either showing a letter of intent to purchase power from a central government agency like Solar Energy Corporation of India (SECI), or proof of at least 50% land acquisition for the renewable project, or by providing a bank guarantee of ₹10 lakh per megawatt.
Many local firms in states with high solar irradiance have blocked evacuation capacities at substations coming up between 2025 and 2028 with the aim of reselling it. They do so by either acquiring land for a power project or providing bank guarantees.
“Any new substation comes up and within a week there will be 8-10 applications,” said the second executive. “It’s like a gold rush.”
A lot of evacuation capacity has also come into the market as companies changed plans. The government had announced waiver of ISTS charges for renewable energy projects coming up before 30 June 2025. However, with delays in getting evacuation capacity, companies setting up renewable energy projects expect to miss this crucial deadline and are looking to exit their investments, the third executive said.