India’s rapidly expanding renewable energy sector is grappling with a major challenge: transmission constraints. Close to 21 gigawatts (GW), that is about 9% of the country’s installed renewable energy capacity, is currently transferred from plants through temporary grid connections while awaiting dedicated transmission infrastructure. Of this, around 12 GW faces restrictions on “power evacuation” during periods of peak solar generation, exposing developers to revenue losses and raising concerns over the financial viability of several projects. Power evacuation is the process of transferring electricity generated at a power plant to the consumption point.During the financial year 2025-26 (FY26), around 6,900 gigawatt-hour (GWh) of clean electricity faced restrictions due to a mismatch between the rapid pace of renewable energy deployment and commissioning of associated transmission infrastructure, latest government data shows. These projects operate under Temporary General Network Access (T-GNA), a stopgap arrangement for renewable energy plants awaiting commissioning of associated transmission infrastructure.Under the current General Network Access (GNA) framework, inter-state transmission system (ISTS)-connected renewable energy projects with long-term GNA are granted firm transmission evacuation rights. T-GNA projects, however, can schedule power only if spare transmission capacity is available. During periods of network congestion, long-term GNA projects receive priority, often resulting in curtailment of generation from T-GNA-connected plants.According to developers, the curtailment faced by these projects are as high as 70-80% of their generating capacity, posing serious concern on project viability and debt servicing. Story continues below this adElectricity curtailment refers to the intentional reduction of power output from renewable generators.Financial stressWhile renewable energy sources, such as solar, enjoy “must-run” status in India, they can still be backed down on grounds of grid security, technical constraints and transmission bottlenecks. During April-June, the grid operators had to curtail 8,133 GWh of electricity generated by solar power sources due to transmission bottlenecks and to maintain grid security, latest government data showed. Developers are compensated for grid-security-related backing down, but curtailment caused by transmission bottlenecks — particularly for projects operating under Temporary General Network Access (T-GNA) — has emerged as a key concern, eroding revenues and threatening project viability.Story continues below this adOn July 22, the Sustainable Project Developers Association (SPDA), which represents over 50 leading renewable energy companies, wrote to the Ministry of New and Renewable Energy (MNRE) seeking financial relief for projects facing stress due to transmission constraints.Also Read | AI data centres to add 26.3 GW load by 2031-32, says power ministry; grid stability a concern“At present, a large number of renewable energy projects are experiencing financial stress primarily due to delays in the availability of evacuation infrastructure, which are outside the control of project developers,” the letter accessed by The Indian Express read. “While developers continue to incur interest during construction, commitment charges, IDC, O&M expenses and other fixed costs, project revenues remain deferred until transmission systems become operational,” it added. The association urged the MNRE to take up the matter with the Ministry of Finance, the Reserve Bank of India (RBI), and financial institutions to facilitate financial relief for affected projects.Story continues below this adAmong the measures sought were moratorium on repayment of principal for the period of transmission delay, interest-free or concessional bridge financing for the affected period, extension of loan repayment tenure without adverse credit implications, and restructuring of project debt without downgrading asset classification, where appropriate.NPA concernsIndustry executives also cautioned that these projects could turn into non-performing assets (NPAs) if the government doesn’t address the issue. “Today, we are funding our plants from our own equity because the revenue coming from the plant is not even 5% of what was projected,” an industry executive of a leading clean energy firm who runs a plant in Rajasthan told The Indian Express. “In our Rajasthan project, where curtailment is as high as 90-95%, whatever little generation is allowed is sold in the spot market. We raised debt based on projected revenues, for example assuming our 300 megawatts (MW) plant would generate power at around Rs 2.5 per unit. But if we are allowed to inject only 10 MW into the grid, there is simply not enough revenue to service that debt,” the executive said. Story continues below this adAlso Read | Power subsidies are slowing household solar adoption. A solution: More subsidiesAs per industry estimates, in Rajasthan alone, around 4 GW of RE projects are facing high-level of curtailment due to non-availability of transmission margins. “Most of the developers are managing through equity, cash flows and old reserves. But this is not sustainable. If this continues, these projects will eventually become NPAs. Everyone in the industry is relying on internal cash flows and reserves to keep their projects afloat,” the industry executive cautioned.Anujesh Dwivedi, Partner, Deloitte India, said the generators tend to lose out on over 50% of their generation during such peak solar-hours due to T-GNA curtailment. “Such a high rate of curtailment can at best be absorbed by generators for a few months, beyond which their ability to fulfil their loan and repayment obligations will be significantly impacted,” Dwivedi added.Story continues below this adWhile most renewable energy projects in India are developed by the private sector, they rely heavily on institutional financing. According to government data, 12 public sector banks, along with IREDA, PFC, REC, NaBFID, IIFCL and SIDBI, cumulatively deployed about Rs 5.08 lakh crore in the renewable energy sector during the last two financial years (FY25 and FY26).Also Read | Kerala is seeing record rooftop solar adoption. So why is it still facing power supply issues?Consequently, any deterioration in the financial viability of these projects also poses a risk to the financial institutions that have funded them.This also dents investor confidence as high curtailment due to connectivity bottleneck impacts return metrics of the RE projects.Story continues below this ad“As seen in the past, slippage in achieving timely commissioning of the upcoming transmission infrastructure cannot be ruled out, which could impact RE capacity additions or lead to continued grid curtailment episodes for the RE players, leading to material impact on the return metrics of the RE projects,” Ankit Jain, Vice President, Co Group Head – Corporate Ratings, ICRA, said.“Depending on the curtailment levels, the cash flow generation for the projects get impacted in the initial years, till the time these are operated on T-GNA, leading to impact on Internal Rate of Returns (IRRs) as well as pressure on debt servicing for the project,” Jain said.