Green Energy Corridor Phase 3

Oct. 5, 2026

Why in news?

The Centre approved the third phase of the Green Energy Corridor (GEC), with an outlay of ₹1.86 lakh crore, aimed at facilitating the evacuation of up to 135 gigawatts (GW) of renewable energy (RE).
- Evacuation refers to transferring electricity generated from renewable sources to the places where it is actually consumed.
This comes as India's rapidly expanding RE capacity poses a growing challenge: ensuring electricity generated from renewables can actually be evacuated and absorbed by the grid when and where needed.

What’s in Today’s Article?

What Is the Green Energy Corridor (GEC)?

The GEC is a flagship government programme to build dedicated transmission infrastructure integrating large-scale renewable energy — solar and wind — into the national power grid.
What's New in Phase 3: For the first time, GEC includes a dedicated battery energy storage component, with provisions for deploying 50 gigawatt-hours (GWh) of Battery Energy Storage Systems (BESS).
Understanding Storage:
- Energy storage systems store excess renewable electricity during high-generation periods and discharge it when demand rises but generation remains low.
- They convert electricity into a storable form when available, then convert it back to electricity when needed.
- A GWh measures total energy produced, consumed, or stored over a period.

Why This Matters: The Evacuation Problem

Transmission bottlenecks and grid congestion — particularly during periods of high solar generation in the daytime — are causing renewable power to be curtailed or restricted from being evacuated.
This problem is worsening because renewable capacity is expanding faster than the transmission infrastructure needed to carry it.

How the ₹1.86 Lakh Crore Is Allocated?

Intra-State Transmission Systems (InSTS) - Over ₹1.36 lakh crore
50 GWh of BESS - ₹50,000 crore
Central Financial Support (CFS) - ₹54,082 crore
- The CFS is meant to offset intra-state transmission charges and keep power costs lower for end users.
Implementation models:
- Greenfield projects (entirely new) under InSTS: Tariff-Based Competitive Bidding (TBCB) — private transmission companies compete to develop and operate a project at a competitively determined tariff.
- Brownfield upgrades and network-strengthening: Cost-Plus Basis (CPB) — project cost plus an approved return is recovered through the regulated tariff.
Who implements it: State transmission utilities serve as overall implementing agencies, while transmission service providers participate in the TBCB process under a build-own-operate-maintain model.
The scheme targets completion by FY33.

The Scale of India's Future Needs And Significance of GEC-III

India is expected to add around 400 GW of RE capacity between 2030 and 2035–36.
This would require about 160 GW of additional InSTS infrastructure.
GEC-III is expected to support 135 GW of this infrastructure creation at the state level.
Decentralisation Goal: The scheme would also help decentralise RE capacity, which has so far been concentrated largely in five states.
- Proposals have already been received from at least 13 states, expanding GEC's geographical footprint — GEC-I covered eight states, GEC-II covered seven states.
Boosting Private Capital: Greenfield projects — traditionally developed by states via CPB using budgetary resources or loans — will now be opened to TBCB.
- Experts draw a parallel with inter-state transmission (ISTS), where transmission service providers bring in capital upfront and recover it over a 35-year period.
- The same model will now apply at the state level, aiming to maximise private capital inflow and competition.

The Challenges So Far

Persistent delays. MNRE is implementing GEC in two phases (GEC-I and GEC-II) to augment transmission lines and transformation capacity. Both have faced consistent delays:
- GEC-I: Now expected to complete by March 2027.
- GEC-II: All projects expected to complete by 2028.
A steering committee at the Cabinet Secretary level will monitor GEC-II and GEC-III progress twice a year.
Transmission constraints are a major barrier to evacuating RE power. In FY26, around 6,900 GWh of clean electricity faced restrictions due to a mismatch between rapid RE deployment and the pace of transmission infrastructure commissioning.

Why Battery Storage Is So Significant?

Large volumes of renewable energy have had to be curtailed — meaning grid operators ask RE plants to reduce or temporarily stop generation to maintain grid stability — particularly during daytime peak solar generation, when supply can exceed the grid's absorption capacity.
This happens mainly due to a lack of energy storage capacity.
The Storage Gap: Deployment of energy storage systems has not kept pace with rapid RE capacity addition, raising concerns about whether the grid can efficiently absorb rising renewable power shares.
Current Installed Capacity:
- BESS: ~2.9 GW
- Pumped Hydro Storage (PHS): ~7.2 GW
Future Targets (Central Electricity Authority plan, by 2035–36):
- Total storage capacity: 174 GW / 888 GWh
- BESS: 80 GW / 321 GWh
- PHS: 94 GW / 567 GWh

Conclusion

Generating clean power is only half the challenge — moving and storing it is the other half, and India has been lagging on both.
GEC-III's dual focus on transmission and, for the first time, battery storage, signals recognition that curtailment, not generation capacity, is the real bottleneck.
Whether India meets its 2035–36 storage targets will determine if this renewable energy boom translates into reliable power, or continues to be wasted at the point of generation.