The Union Cabinet, headed by Prime Minister Narendra Modi, has given the green light to the Green Energy Corridor Phase-III (GEC-III) scheme. This initiative represents a significant expansion of India’s intra-state power transmission network, aimed at facilitating the movement of up to 135 GW of renewable energy across various states and Union Territories. The approval marks a critical step in bolstering the country’s commitment to renewable energy sources.

In a statement on the social media platform X, PM Modi highlighted benefits such as cleaner energy, enhanced grid strength, and increased opportunities resulting from this decision. The GEC-III scheme is primarily designed to strengthen the Intra-State Transmission System (InSTS), which is essential for integrating renewable energy produced within individual states into the broader electricity grid.

Key Features of the Initiative

A notable aspect of the GEC-III scheme includes the implementation of 50 GWh of Battery Energy Storage Systems (BESS). These systems can be deployed at renewable energy generation sites or other strategic locations to support grid management. The incorporation of this battery storage capacity aims to tackle one of the critical issues associated with renewable energy: its inherent intermittency.

For example, solar energy is unavailable at night, and generation can vary due to weather conditions. The government asserts that these battery systems will play a pivotal role in managing grid congestion, minimising curtailment during peak hours, and effectively meeting electricity demands during periods when solar energy generation is not possible.

The GEC-III scheme has a projected completion timeline set for the financial year 2032-33 and commands a total budget of Rs 1,86,405 crore. Out of this allocation, Rs 1,36,378 crore is designated for the development of intra-state transmission systems, while Rs 50,000 crore is earmarked specifically for the battery storage initiatives.

Financial Aspects and Implementation Strategy

The government plans to provide Rs 54,082 crore in Central Financial Support (CFA) as part of this initiative. This financial backing aims to mitigate intra-state transmission fees, thereby helping to lower electricity costs for consumers. Regarding the transmission aspect, all new, greenfield projects will be executed through a Tariff-Based Competitive Bidding (TBCB) approach, while modifications and upgrades to existing networks—referred to as brownfield projects—will be handled on a Cost Plus Basis.

State Transmission Utilities will act as the principal implementing agencies for this ambitious project. Additionally, Transmission Service Providers will engage in competitive bidding under a Build-Own-Operate-Maintain (BOOM) framework to ensure efficient execution.

The government has indicated that GEC-III will contribute to India’s goal of reaching 900 GW of installed non-fossil fuel capacity by the year 2035. Beyond its role in transmission infrastructure, the initiative is anticipated to generate employment opportunities in sectors such as power generation, manufacturing, construction, and energy storage.

Broader Implications for Energy Sector

The expansion of battery storage under this scheme will also bolster India’s domestic energy-storage industry. Furthermore, the expanded grid will necessitate a skilled workforce for ongoing operations, maintenance, and effective grid management. The government contends that this corridor is essential for fortifying long-term energy security while encouraging the integration of renewable energy resources. Ultimately, GEC-III aims to contribute to a significant reduction in the carbon footprint of India’s electricity system.

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