Green Energy Corridor Phase 3: Who Funds Rs 1.86 Lakh Cr?

Why Is India Curtailing Renewable Electricity Despite Rising Power Demand?

Renewable energy curtailment in India is rising fast. Data show 378.52 million units curtailed in September 2026, affecting 118.6 GW of capacity. Between May and August, curtailment was nearly four times the 2025 level.

Gujarat and Rajasthan accounted for about 79 percent of the September total, and Rajasthan’s was entirely solar.

Transmission is only part of the cause. Sources report that 470 GWh was curtailed on the inter-state system in the first quarter of 2026, with transmission constraints behind nearly two-thirds of it, about 300 GWh.

In September, however, power system balancing accounted for a major share, and analysts also cite demand mismatches and limited flexibility.

Rajasthan is the worst case. Sources reported peak curtailment of nearly 51.5 percent, over 4 GW affected, and developer losses of around Rs 250 crore, even after two 765 kV corridors were commissioned.

The Centre for Social and Economic Progress notes that power purchase agreements usually treat curtailment for grid security or transmission constraints as technical and typically uncompensated, while other curtailment may earn deemed generation payments.

Adani Green informed analysts that its agreements pay deemed generation when the grid orders back-down. Unpaid curtailment hits revenue, strains debt service, and weakens investor confidence.

Lenders size loans against contracted revenue, so a project that loses a fifth of its midday output may struggle to meet repayments, and that perception raises borrowing costs for the next project.

Rajasthan’s exposure matters here because developers have built on the assumption that new 765 kV corridors would clear the backlog, and they have not yet done so.

Can 135 GW of evacuation capacity and 50 GWh of storage fix this?

Yes, but only partly. Storage can shift midday surplus into the evening, and new lines can relieve congested nodes. Much of the documented curtailment sits on inter-state and temporary-access routes, while this scheme strengthens state networks, so it must be matched by progress at the national level.

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