32 | September 2025 | www.industrialoutlook.in
COM financial weaknesses and
tariff distortions complicate
mer-
chant investment. Policy and tariff
reforms are essential to align incen-
tives for reliability and investment.
Data, cybersecurity, and institution-
al capacity
Digitalization brings cyber risk.
System operators need modern
cybersecurity frameworks, trained
personnel, and governance reforms
to manage increasingly automated
operations.
Financing and credit risk
While investors are interested,
project financing depends on bank-
able PPAs, predictable revenue
streams, and disciplined procure-
ment. DISCOMs’ historical
pay-
ment and loss issues raise credit
concerns. Institutional reforms and
credit enhancement mechanisms are
frequently necessary.
Clearly, India’s grid transition is as
much about institutions and markets
as it is about wires and machines.
Policy,
institutional
responses,
and notable initiatives
India has not been idle. Several
policies and programs target the
very problems listed above:
• Green Energy Corridor (GEC): A
program to build dedicated trans-
mission infrastructure to evacua-
te renewable
power
from
re-
source-rich states to demand cen-
ters. The corridor approach recog-
nizes that generation without evacu-
ation is useless.
• Market reforms and ancillary
service frameworks: POSOCO and
regulators are piloting faster sched-
uling intervals, intra-day markets,
and ancillary services auctions so
flexibility providers can monetize
capabilities.
• National storage policies and
pilots: Various state and central
level pilots for BESS and pumped
hydro are underway, supported by
technical studies to assess effective
deployment strategies.
• Distribution reforms and smart
meter rollouts: Multiple states are-
im
plementing
AMI
and
DMS/ADMS systems to improve
billing, reduce AT&C (aggregate
technical & commercial) losses, and
enable demand response.
• Investment facilitation via blend-
ed finance and multilateral support:
The World Bank, Asian Develop-
ment Bank, and other financiers
offer programs to de-risk transmis-
sion and storage investments.
These institutional moves are criti-
cal because technology alone will
not solve market and operational
uncertainties.
Case studies and real-world sig-
nals
A handful of examples illustrate the
transition in practical terms:
• State renewable expansions:States
like
Gujarat
have
aggressively
added renewable capacity, demon-
strating how a combination of poli-
cy, local manufacturing, and grid
planning can scale additions quick-
ly. Recent months have shown large
monthly capacity additions in states
with proactive programs.
• Transmission upgrades and target-
ed lines: Numerous transmission
projects double-circuit lines, re-
gion-to-region interconnectors, and
substation upgrades are being com-
missioned to improve reliability and
reduce outages. These physical
investments are the backbone of a
reliable modern grid.
• Pilot battery projects and hybrid
tenders: Utilities and developers are
deploying hybrid solar-plus-storage
projects, while ISOs experiment
with ancillary auctions to procure
fast response.
Each pilot or regional success
provides lessons: better forecasting
reduces reserve needs; hybrid plants
reduce curtailment; and strong pro-
curement contracts attract more
competitive capital.
C S
OVER TORY