New Delhi, August 11, 2026: The Union Cabinet is expected to approve a ₹3,000 crore financial relief package for the power sector as the existing grid is unable to cater to expanded generation capacity. Besides this, government officials have told Mint that the Ministry of New and Renewable Energy is expected to seek cabinet approval for the third phase of the Green Energy Corridor, aimed at evacuating about 135GW of renewable energy from surplus-generation-rich states.
The relief package for the power sector comes at a time when major renewable energy hubs like Rajasthan and Gujarat have faced transmission delays around critical substations, with some solar projects forced to curtail generation by as much as 80-90% from their operational capacity to the grid. For energy generators, this has meant incurring a daily loss of ₹50 crore per day due to unevacuated power generation, threatening their debt service capabilities.
India’s non-fossil power generation capacity has reached 300GW, over 60% of its target for 2030. For the government, the next phase of the challenge would be to address the transmission grid infrastructure, as the government estimates that the country will need about 61,411 circuit km of transmission capacity by FY30 to meet its transmission targets.
Due to the limitations of the power grid, distribution companies have been forced to sell renewable power on electricity exchanges at prices below their purchase rates. Uttar Pradesh, Bihar, Assam and West Bengal have been forced to sign coal-based power purchase agreements because they cannot access cheaper green power due to transmission issues.
