31 | September 2025 | www.industrialoutlook.in
better telemetry are being rolled
out. More distributed resources
(rooftop solar, EV chargers) are
creating visibility and control chal-
lenges, but digitalization is the tool
to tame them.
F. Market reforms and new proucts.
The electricity markets are matur-
ing ancillary services, frequency
regulation, faster scheduling inter-
vals, and intra-day markets are
being developed to provide the
signals and compensation for flexi-
bility.
These trends together point to a grid
that is becoming more capital-inten-
sive, more software-driven, and
more modular but also more com-
plex to operate.
Opportunities where money, val-
ue and societal benefits lie
If the grid transition is the problem,
the opportunities are its economic
upside. Here are the main opportu-
nity areas:
Grid infrastructure investment
Transmission strengthening, new
substations, double-circuit lines,
and HVDC interconnects are imme-
diate needs. These projects offer
predictable long-dated returns and
are attractive to institutional inves-
tors, sovereign funds, and lenders.
Dedicated green corridors for re-
newables unlock stranded resources
and reduce curtailment losses.
Energy
storage
and
flexibility
services
Storage is the “missing link” that
converts variable renewables into
dispatchable capacity. Battery ener-
gy storage systems (BESS), utili-
ty-scale pumped hydro, and hybrid
plants (solar+storage, wind+stor-
age) present substantial business
models:
capacity
value
during
peaks, energy arbitrage, ancillary
services, and deferment of transmis-
sion upgrades. As markets develop
to compensate flexibility (ancillary
markets,
capacity
mechanisms),
storage economics improve.
Distributed energy and prosumer
markets
Rooftop solar, coupled with be-
hind-the-meter batteries and smart
inverters, enables consumers to
become
prosumers. Aggregation
platforms and virtual power plants
(VPPs) can participate in markets,
providing localized grid services
and monetizing demand flexibility.
Digital platforms and grid software
Grid operators will pay for forecast-
ing, synthetic inertia algorithms,
market clearing engines, and distri-
bution management systems. Soft-
ware that enables telemetry, cyber-
security, data analytics, predictive
maintenance, and faster market
operations will be in demand.
Electric mobility and sector cou-
pling
EV charging, managed smartly, can
be an enormous resource for the
grid (vehicle-to-grid services, flexi-
ble load). Coordinated charging
reduces peak stress and EV fleets
can act as distributed storage.
Local manufacturing and supply
chains
India’s push for domestic manufac-
turing (solar modules, inverters,
batteries) creates industrial oppor-
tunities from cell and module pro-
duction to converter stacks and grid
hardware.
New financial products and risk
management tools
Given
the
capital
needs
and
revenue uncertainty, structured fi-
nance, green bonds, and long-term
PPAs backed by credible counter-
parties will grow. Insurance and
hedging instruments for merchant
renewables, storage, and transmis-
sion projects will expand.
These opportunities are not hypo-
thetical. Many are already being
deployed or are commercially vi-
able in certain projects and markets;
the race now is about scaling and
standardizing them.
Technical and operational chal-
lenges (the hard stuff)
Transforming the grid is not just a
financing exercise it’s a technical
revolution with thorny operational
problems.
Variability, uncertainty, and
fore-
casting limits
Solar and wind output fluctuate
with
weather.
Forecasting
has
improved, but errors still require
balancing reserves. Over-depen-
dence on day-ahead forecasts with-
out robust intra-day adjustment
increases curtailment and system
costs.
Frequency stability and inertia
Traditional synchronous generators
provide
inertia
and
governor
response that stabilize frequency. A
grid with high inverter-based re-
sources loses that built-in inertia.
India must deploy grid-forming
inverters, fast frequency response,
and new ancillary markets to pro-
cure synthetic inertia and ramping
reserves.
Transmission bottlenecks and cur-
tailment
Renewable clusters often appear in
resource-rich but remote regions;
the transmission network to evacu-
ate them has lagged. This leads
to
congestion
and
curtailment.
Strengthening corridors like the
Green Energy Corridor is necessary
but capital-intensive and slow.
Distribution level complexity and
voltage issues
High
rooftop
solar
penetration
causes reverse flows, voltage rise,
and protection coordination prob-
lems on distribution feeders. Many
distribution networks need re-engi-
neering and better control systems.
Market design and regulatory mis-
alignments
Absent clear price signals for flexi-
bility, investors hesitate to build
storage or flexible capacity. DIS-
C S
OVER TORY