Powering the Future: India’s Energy Landscape in 2025
January 25, 2025, 4:31 am
Location: India, Delhi
Employees: 5001-10000
Founded date: 1989
Total raised: $109.7M
India's energy sector is a dynamic tapestry, woven with threads of innovation, investment, and regulatory frameworks. As we step into 2025, the landscape is marked by significant developments in transmission projects and renewable energy initiatives. The Inter-State Transmission System (ISTS) and rooftop solar projects are at the forefront, showcasing the country’s commitment to a sustainable energy future.
In the first nine months of FY25, the ISTS-Tariff Based Competitive Bidding (TBCB) framework awarded projects worth a staggering Rs 1 trillion. This surge in investment signals a robust confidence in the sector. India Ratings and Research (Ind-Ra) maintains a stable outlook for transmission projects, buoyed by consistent regulations and anticipated operational performance. The capital outlay of Rs 1,016.75 billion from 37 awarded projects eclipses the cumulative Rs 808.93 billion from all TBCB projects completed since FY14. This is not just a number; it’s a testament to the momentum building in India’s energy infrastructure.
However, the road is not without bumps. Among 58 commissioned projects, only eight met their deadlines. The average delay? A frustrating nine months. The Central Electricity Regulatory Commission (CERC) has been lenient, granting extensions for delays caused by unforeseen circumstances. This leniency is a double-edged sword. While it provides relief, it also raises questions about efficiency and accountability.
The Power Grid Corporation of India Limited (POWERGRID) has emerged as a dominant player, securing over 65% of the ISTS-TBCB awards. This dominance is a double-edged sword as well. While it consolidates expertise, it also risks stifling competition. New entrants into the market are crucial. They bring fresh ideas and drive down costs, benefiting consumers. A diverse developer base can enhance the value chain, making transmission more efficient and cost-effective.
The credit profile of operational ISTS assets remains stable, thanks to CERC’s Sharing Regulations 2020. These regulations introduce a revenue-sharing mechanism that mitigates counterparty risks. The annual collection efficiency for these assets is projected to exceed 95%. However, not all states are on the same page. States like Maharashtra, Uttar Pradesh, and Rajasthan are grappling with moderate collection volatility. This inconsistency could pose challenges for future investments.
Amendments to the Sharing Regulations in October 2023 introduced new revenue mechanisms for ISTS assets. Yet, these projects face higher counterparty risks due to an unproven record of timely revenue collection. The balance between innovation and risk management is delicate. Investors are watching closely.
On the renewable energy front, POWERGRID is making strides with a new tender for a 1.07 MW rooftop solar project at the National Institute of Technology (NIT) Durgapur. This initiative is part of POWERGRID’s corporate social responsibility efforts. The deadline for bids is February 13, 2025. This project is not just about solar panels; it’s about fostering a culture of sustainability and responsibility.
Bidders must meet stringent criteria, including a minimum local content requirement of 50%. This push for local suppliers is a strategic move. It not only supports the domestic economy but also ensures that projects are executed with local expertise. The selected contractors will be responsible for the entire lifecycle of the project, from design to maintenance. This comprehensive approach ensures accountability and quality.
POWERGRID is not resting on its laurels. Recent collaborations with REC Power Development and Consultancy to enhance interstate transmission systems in Gujarat and Karnataka highlight its proactive stance. Additionally, a partnership with Rajasthan Rajya Vidyut Prasaran Nigam aims to bolster the intrastate transmission network. These initiatives are crucial for ensuring that energy flows seamlessly across states, powering homes and industries alike.
In December 2024, POWERGRID raised Rs 42.5 billion through bonds issued via private placement. This capital infusion is vital for funding ongoing and future projects. It reflects investor confidence in POWERGRID’s vision and strategy. The financial backing will enable the company to expand its reach and enhance its capabilities.
As India navigates the complexities of energy transition, the focus must remain on sustainability and efficiency. The challenges are significant, but so are the opportunities. The energy sector is at a crossroads, and the decisions made today will shape the landscape for years to come.
In conclusion, India’s energy sector in 2025 is a blend of promise and challenges. The ISTS-TBCB projects and renewable energy initiatives are paving the way for a sustainable future. However, the path is fraught with delays and risks. The balance between innovation and accountability will be crucial. As the country moves forward, the commitment to a robust, efficient, and sustainable energy framework will be the key to unlocking its full potential. The future is bright, but it requires careful navigation.
In the first nine months of FY25, the ISTS-Tariff Based Competitive Bidding (TBCB) framework awarded projects worth a staggering Rs 1 trillion. This surge in investment signals a robust confidence in the sector. India Ratings and Research (Ind-Ra) maintains a stable outlook for transmission projects, buoyed by consistent regulations and anticipated operational performance. The capital outlay of Rs 1,016.75 billion from 37 awarded projects eclipses the cumulative Rs 808.93 billion from all TBCB projects completed since FY14. This is not just a number; it’s a testament to the momentum building in India’s energy infrastructure.
However, the road is not without bumps. Among 58 commissioned projects, only eight met their deadlines. The average delay? A frustrating nine months. The Central Electricity Regulatory Commission (CERC) has been lenient, granting extensions for delays caused by unforeseen circumstances. This leniency is a double-edged sword. While it provides relief, it also raises questions about efficiency and accountability.
The Power Grid Corporation of India Limited (POWERGRID) has emerged as a dominant player, securing over 65% of the ISTS-TBCB awards. This dominance is a double-edged sword as well. While it consolidates expertise, it also risks stifling competition. New entrants into the market are crucial. They bring fresh ideas and drive down costs, benefiting consumers. A diverse developer base can enhance the value chain, making transmission more efficient and cost-effective.
The credit profile of operational ISTS assets remains stable, thanks to CERC’s Sharing Regulations 2020. These regulations introduce a revenue-sharing mechanism that mitigates counterparty risks. The annual collection efficiency for these assets is projected to exceed 95%. However, not all states are on the same page. States like Maharashtra, Uttar Pradesh, and Rajasthan are grappling with moderate collection volatility. This inconsistency could pose challenges for future investments.
Amendments to the Sharing Regulations in October 2023 introduced new revenue mechanisms for ISTS assets. Yet, these projects face higher counterparty risks due to an unproven record of timely revenue collection. The balance between innovation and risk management is delicate. Investors are watching closely.
On the renewable energy front, POWERGRID is making strides with a new tender for a 1.07 MW rooftop solar project at the National Institute of Technology (NIT) Durgapur. This initiative is part of POWERGRID’s corporate social responsibility efforts. The deadline for bids is February 13, 2025. This project is not just about solar panels; it’s about fostering a culture of sustainability and responsibility.
Bidders must meet stringent criteria, including a minimum local content requirement of 50%. This push for local suppliers is a strategic move. It not only supports the domestic economy but also ensures that projects are executed with local expertise. The selected contractors will be responsible for the entire lifecycle of the project, from design to maintenance. This comprehensive approach ensures accountability and quality.
POWERGRID is not resting on its laurels. Recent collaborations with REC Power Development and Consultancy to enhance interstate transmission systems in Gujarat and Karnataka highlight its proactive stance. Additionally, a partnership with Rajasthan Rajya Vidyut Prasaran Nigam aims to bolster the intrastate transmission network. These initiatives are crucial for ensuring that energy flows seamlessly across states, powering homes and industries alike.
In December 2024, POWERGRID raised Rs 42.5 billion through bonds issued via private placement. This capital infusion is vital for funding ongoing and future projects. It reflects investor confidence in POWERGRID’s vision and strategy. The financial backing will enable the company to expand its reach and enhance its capabilities.
As India navigates the complexities of energy transition, the focus must remain on sustainability and efficiency. The challenges are significant, but so are the opportunities. The energy sector is at a crossroads, and the decisions made today will shape the landscape for years to come.
In conclusion, India’s energy sector in 2025 is a blend of promise and challenges. The ISTS-TBCB projects and renewable energy initiatives are paving the way for a sustainable future. However, the path is fraught with delays and risks. The balance between innovation and accountability will be crucial. As the country moves forward, the commitment to a robust, efficient, and sustainable energy framework will be the key to unlocking its full potential. The future is bright, but it requires careful navigation.