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
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.”
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.
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.
Mittal 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 Mittal.
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.
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