Green Energy Corridor Phase-III: Implications of India’s Transmission and Storage Push

The Union Cabinet’s approval of the Green Energy Corridor Phase-III (GEC-III) marks a significant expansion of India’s renewable-energy infrastructure, with the scheme combining large-scale intra-State transmission development with battery energy storage. Announced on September 30, 2026, GEC-III has a total outlay of ₹1,86,405 crore, including ₹1,36,378 crore for intra-State transmission systems and ₹50,000 crore for 50 GWh of Battery Energy Storage Systems (BESS). The scheme provides Central Financial Support of ₹54,082 crore and is targeted for completion by FY 2032-33. It is expected to facilitate evacuation of up to 135 GW of renewable energy.

Earlier phases focused principally on strengthening intra-State transmission. Phase-II, approved at ₹12,031.33 crore for approximately 20 GW across seven States, provided Central Financial Assistance at 33% of project cost. The Government had already planned transmission alongside storage in the GEC Phase-II Ladakh project, approved in 2023 for a ₹20,773.7 crore inter-State transmission system to evacuate 13 GW of renewable energy from a project planned with 12 GWh of BESS. GEC-III brings a similar approach to intra-State transmission. The scheme’s stated aim is power evacuation within States and Union Territories, with BESS deployed to address intermittency, congestion and peak-hour curtailment. The assistance is intended to offset intra-State transmission charges, and the scheme is expected to support the target of 900 GW of installed non-fossil capacity by 2035.

The Electricity Act, 2003 provides the statutory framework for the intra-State transmission component of GEC-III. Section 39(2) makes State Transmission Utilities responsible for planning and developing intra-State transmission, and the scheme names them as the implementing agency. Section 63 requires Commissions to adopt tariffs discovered through transparent competitive bidding under Central guidelines. Section 86(1)(e) and (f) cover renewable promotion and dispute adjudication, Section 108 policy directions from State Governments to State Commissions have been used to set bidding thresholds and Section 164 is important for project execution, as it enables the Appropriate Government to confer specified powers associated with the Telegraph Authority under Part III of the Indian Telegraph Act, 1885 for placing electric lines and electrical plant. That Part continues to apply for this purpose under Section 60(3) of the Telecommunications Act, 2023, until Section 164 is amended.

The release also states that all greenfield Intra-State Transmission System (InSTS) projects will use Tariff Based Competitive Bidding (TBCB) under a Build-Own-Operate-Maintain (BOOM) model; brownfield works proceed on Cost Plus Basis. Clause 5.3 of the Tariff Policy, 2016 provides for intra-State transmission projects above a threshold fixed by State Commissions to be developed through competitive bidding. The Ministry of Power recommended TBCB in March 2021, and the Supreme Court judgement on November 23, 2022 in TATA Power Company Limited Transmission v. Maharashtra Electricity Regulatory Commission & Ors. (Civil Appeal No. 1933 of 2022), held that competitive bidding was not binding on the State Commission, treated the National Tariff Policy, 2016 as a material consideration and left cost thresholds to State Commissions. Kerala fixed ₹250 crore in December 2025; Andhra Pradesh notified regulations in 2024. Central fiscal incentives, including additional State borrowing space tied to power-sector reforms, have reinforced this push. GEC-III thus provides for TBCB on all greenfield projects under the scheme across States with differing thresholds and readiness.

GEC-III also adds to an existing policy framework supporting battery storage. The Government has in 2023, provided viability gap funding for 13,220 MWh of BESS with an outlay of ₹3,760 crore and, in June 2025, approved another scheme for 30 GWh with ₹5,400 crore funding. Certain co-located BESS projects are also eligible for a waiver of inter-State transmission charges if commissioned by June 2028. In addition, the Government has introduced incentives for domestic battery-cell manufacturing. Against this backdrop, GEC-III includes a ₹50,000 crore component for 50 GWh of BESS. The scheme’s implementation will therefore need to be considered alongside these existing storage-support measures. BESS contracts will also need to address issues such as battery degradation, augmentation, availability, safety and end-of-life obligations under the Battery Waste Management Rules, 2022.

Connectivity, Land and Execution

Capacity has value only with access. CERC’s Connectivity and General Network Access framework for the inter-State system continues to evolve, State-level access rules will govern intra-State lines, and disputes over connectivity timelines, bank guarantees and solar/non-solar-hour access remain live. Land, right-of-way and clearances are the persistent risk for linear assets; delay cascades into EPC claims, financing stress and availability obligations.

Thus, as implementation progresses, the detailed scheme guidelines, State-level implementation frameworks, bidding documents and procurement arrangements will determine how the framework announced by the Cabinet is translated into transmission and storage projects across States and Union Territories.