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Cabinet Approves INR 1.86 Lakh Cr Green Energy Corridor Phase-III

The Union Cabinet has approved the INR 1.86 lakh crore Green Energy Corridor Phase-III scheme to strengthen intra-state transmission to evacuate 135 GW of renewable energy and deploy 50 GWh of BESS by FY 2032-33. Industry leaders weigh in on its impact on the RE and BESS sector.

October 01, 2026. By Mrinmoy Dey

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Green Energy Corridor Phase-III (GEC-III) scheme with a total outlay of INR 1,86,405 crore to strengthen intra-state transmission networks and enable the evacuation of up to 135 GW of renewable energy across States and Union Territories by FY 2032-33.

Under the scheme, INR 1,36,378 crore will be allocated for the development of Intra-State Transmission Systems (InSTS), while INR 50,000 crore will support the deployment of 50 GWh of Battery Energy Storage Systems (BESS) at renewable energy developer/generator ends or other strategically important locations. The BESS component is aimed at addressing renewable energy intermittency, transmission congestion, peak-hour curtailment and demand during non-solar hours.

The scheme carries a total Central Financial Support of INR 54,082 crore, which will help offset intra-state transmission charges and reduce the transmission-related component of power costs for end users.

GEC-III will be implemented up to FY 2032-33, with State Transmission Utilities (STUs) serving as the overall implementing agencies. All greenfield projects under the InSTS component will be developed through Tariff Based Competitive Bidding (TBCB), while brownfield upgrades and network-strengthening works will be executed on a Cost Plus Basis (CPB). Transmission Service Providers selected through TBCB will implement projects under a Build-Own-Operate-Maintain (BOOM) model.

The scheme is designed to strengthen grid infrastructure required for integrating higher volumes of renewable power and support India's target of 900 GW of installed non-fossil fuel capacity by 2035. The addition of 50 GWh of BESS is expected to provide greater grid flexibility and improve the utilisation of renewable power during periods of high demand and non-solar hours.

What the Scheme Aims to Achieve?

The government expects the scheme to also contribute to the long-term energy security of the country and promote ecologically sustainable growth by reducing the carbon footprint. “It will generate large direct and indirect employment in the power sector, manufacturing, and construction industries. BESS manufacturing and deployment will additionally generate employment in the domestic energy storage industry. The scheme will also generate long-term skilled employment in operation, maintenance, and grid management across participating States,” the Union Cabinet stated.

Commenting on the announcement, Vineet Mittal, Chairman, Avaada Group, said, “The Union Cabinet’s approval of Green Energy Corridor Phase III is an important step towards fulfilling the promise of ensuring affordable and dependable delivery of clean power. By bringing transmission and battery storage into one programme, it recognises that generation, delivery and availability must advance together. As storage deployment grows, it can create a larger market for daytime generation. Some batteries will initially absorb surplus electricity from existing plants. As demand and storage utilisation increase, additional renewable generation may be needed to charge them.”

Felix Kadam, Co-Founder and Managing Director, CosPower Engineering, remarked, “The recent approval of Green Energy Corridor Phase III is a critical milestone in strengthening India’s power infrastructure for the next phase of renewable energy development. With the growing share of energy from solar, wind, battery storage and similar systems, managing voltage fluctuations, reactive power, harmonics and other aspects of power quality will become increasingly important. As renewable generation can vary with weather conditions, power-quality management will need to address these fluctuations and ensure a stable power supply, while also meeting the growing demand from industries, data centres, EVs and other power-electronics-driven applications.”

Intra-State Transmission Network in Focus

The intra-state focus of this programme deserves particular attention. Electricity must travel through state networks to reach industrial clusters, agricultural communities and growing towns. Strengthening those networks can help states make better use of their renewable resources and improve the delivery of power within their boundaries.

Srivatsan Iyer, Global CEO, Hero Future Energies, said, “Green Energy Corridor Phase-III addresses a critical need. As renewable capacity scales up, evacuation infrastructure has to keep pace, and much of that constraint sits at the state level. Strengthening intra-state transmission, and building it ahead of generation, is essential to avoid stranded capacity and curtailment.”

Mittal emphasised the importance for every district to assess the role that local renewable generation and storage can play in meeting its electricity needs. “The right solution will vary by location. Some districts will benefit from solar and batteries close to demand centres. Others will require stronger connections to larger renewable projects. Planning should reflect local resources, land availability, network conditions and consumption patterns,” he said.

Harpreet Singh, CEO, SunBridge Solar, remarked, “For developers, greater visibility and long-term planning of transmission capacity can significantly improve project development, investment decisions and execution certainty, particularly in renewable-rich states. The inclusion of battery energy storage is also an important step, as storage can provide greater flexibility in managing renewable intermittency, balancing supply and demand, and improving utilisation of the transmission network.”

Dedicated Boost for BESS

The 50 GWh of storage is equally significant. Deployed at the generator end and at key grid locations, it will help absorb surplus solar, ease congestion and supply power in non-solar hours. “This is how renewable energy becomes firm and dispatchable, which is what the grid increasingly values. Against the CEA's projected requirement of over 236 GWh by 2031-32, it is a meaningful first step. The support on intra-state transmission charges will also help keep costs in check for consumers,” commented Iyer.

Vineet Mittal, Director, Navitas Solar, said, “The planned deployment of 50 GWh of battery energy storage can provide greater flexibility to the grid by enabling renewable power to be stored when generation is high and deployed when demand requires it. This will be particularly important as India scales up solar and wind capacity across regions with strong renewable potential. A stronger combination of transmission infrastructure and storage can help reduce congestion, improve grid stability and enable more renewable power to be integrated reliably.”

Amitansu Satpathy, Founder and Group Managing Director, MD, BPE, commented, “Including battery energy storage in the scheme is the most significant part of this phase. Storage lets clean power be held when generation is high and released when demand peaks. That makes solar and wind more dependable and helps keep the grid stable. Central support to offset intra-state transmission charges should also help keep electricity affordable.”

Mittal from Avaada added that careful planning is required. “Battery capacity alone does not tell us how much new solar must be built. That depends on charging sources, operating cycles, efficiency, local demand and the availability of existing surplus power. We should plan these investments as an integrated system.”

Manufacturing Boost for Transmission and RE Sector

This programme can also support a broader manufacturing opportunity. “Solar modules and cells, batteries, transformers, cables, inverters and control systems all form part of the infrastructure required for a more electrified economy. For India, the opportunity is to develop the capability to design, manufacture, install and maintain these systems at scale. That means investing in quality, engineering, skilled people and sustained innovation. Government has set out the direction. Industry, utilities and implementing agencies must now turn that direction into dependable infrastructure,” commented Avaada's Vineet Mittal.

Mittal of Navitas Solar added, “For the broader solar industry, this 1.86 lakh crore infrastructure push creates a stronger foundation for sustained capacity addition and supports India’s transition towards a more resilient and flexible clean-energy ecosystem.”

Manoj Kumar Singh, Director General, DIPA, remarked that the Scheme initiative provides a clear and highly predictable pipeline for the power equipment and technology sector through FY33. “The dedicated focus on storage and adding over 51,000 circuit kilometres of transmission lines means we can safely scale up solar and wind power while maintaining absolute grid stability. This rollout will significantly boost domestic manufacturing, generate widespread technical employment, and unlock major opportunities for advanced engineering and power management infrastructure across the country,” he said.

Satpathy believes that for Indian manufacturers of storage and power electronics, this creates long-term demand visibility and room to scale domestic capabilities. “Holistically, these measures give states and utilities a clear roadmap to integrate renewables at scale and move closer to the country's non-fossil capacity goals,” he said.

Focus Must Shift to Execution

The next priority should be closer synchronisation between generation, transmission and storage planning. Transmission capacity needs to be planned and commissioned in line with the development timelines of renewable projects, with clear coordination among developers, transmission utilities, system operators and state agencies. India has already established a strong renewable-energy pipeline.

“The challenge now is to convert that pipeline into reliable, operational and grid-integrated capacity at scale. Predictability in connectivity, timely execution of transmission infrastructure and effective coordination across stakeholders will be critical to achieving this. The next phase of India’s energy transition will be defined not merely by how much renewable capacity we add, but by how effectively we connect, store, transmit and deliver that energy,” Singh remarked.

What matters now is execution. “Transmission, storage and generation need to be planned together, with predictable timelines and consistent tender structures. Where that happens, capital flows more efficiently, and projects are delivered on time,” stated Iyer.