Energetica India Magazine - November 2025

energetica INDIA- November_2025 53 WIND POWER consumers. Furthermore, tariff-based competitive auctions have pushed developers to deliver lower-cost power, ensuring that wind remains price-competitive against both fossil fuels and solar energy. The government has also encouraged wind-so- lar hybrid projects, which not only balance the variability of renewables but also optimise the use of scarce land and grid infrastructure. Financing the Transition: Banking Sector’s Role in Scaling Wind Energy The Indian banking system will be central to financing the re - newable energy transition, particularly in scaling wind power. With investment requirements projected at USD 60–68 billion annually by 2030, domestic banks, non-banking finance com - panies (NBFCs), and development finance institutions (DFIs) must play a leading role alongside foreign capital. Commercial banks in India are already major lenders to the power sector, but their portfolios remain skewed toward ther- mal projects. As coal-based power faces regulatory and market risks, a gradual rebalancing toward renewables is inevitable. Wind projects, with their long gestation period and 20–25 year operating life, need long-tenure financing at competitive inter - est rates. Banks will therefore need to align their lending mod- els, possibly through consortium arrangements, to spread risk. The Reserve Bank of India (RBI) has classified lending to re - newable energy as part of priority sector lending (PSL) under certain thresholds, but scaling to utility-scale wind farms will require beyond-PSL financing frameworks. Green bonds and sustainability-linked loans are expected to bridge this gap, of- fering banks a new product line while meeting their environ- mental, social, and governance (ESG) mandates. From a risk perspective, Indian lenders have been cautious due to concerns such as payment delays by state distribution com- panies (DISCOMs), tariff disputes, and curtailment risks. To address this, credit enhancement mechanisms – such as partial risk guarantees, escrow structures for payment security, and blended finance partnerships with multilateral agencies – are becoming more important. These structures reduce risk premi- ums and make projects more bankable. For public sector banks, the renewable sector represents both an opportunity and a challenge. As government policy strongly favours clean energy, institutions like the State Bank of India (SBI), PFC, and REC have already scaled up renewable lend- ing portfolios. But balancing profitability with sustainability will require stringent project appraisal, cash-flow modelling, and continuous monitoring. Private banks, on the other hand, may leverage their strength in structured finance to underwrite large-ticket renewable projects and syndicate them to inves- tors. At a systemic level, Indian banks will also face climate stress- test requirements in the coming years, aligned with global Ba- sel norms. This will push banks to disclose their exposure to fossil fuel versus renewable sectors and accelerate the realloca- tion of capital. Wind projects, with relatively stable capacity utilisation and proven technology, could emerge as preferred assets in such a framework, particularly when combined with storage to mitigate variability risks. Grid Integration and Storage Solutions No renewable energy expansion can succeed without a ro- bust grid. In states such as Tamil Nadu, which generate large amounts of wind power, curtailment is a recurring challenge. During high-wind months, excess generation cannot be ab- sorbed due to insufficient transmission capacity. The Green Energy Corridor project, designed to strengthen and expand renewable evacuation infrastructure, is crucial in this regard. It aims to connect renewable-rich states to demand centres across the country, reducing curtailment and improv- ing reliability. At the same time, energy storage will become indispensable. Estimates from the Central Electricity Authority (CEA) sug- gest that storage capacity must grow from 6 GW in 2025 to 61 GW by 2030. Batteries, pumped hydro projects, and flexible thermal plants with battery retrofits will be vital in providing