Policy Update
Yash Kumar
Renewable energy is energy that comes from natural resources that are constantly replenished, like sunlight and wind. Renewable energy is also known as green energy. The Indian Energy sector has been developing its reliance on renewable energy, which aims to increase India’s non-fossil fuel capacity to 500 GW by 2030. This objective highlights the importance of a strong infrastructure to integrate the power generated from different sources like solar, wind and hydro into the existing national energy grid. The Green Energy Corridor (GEC) is a nationwide initiative that is designed to integrate renewable electricity with conventional power stations to ensure efficient transmission from those regions which are rich in resources and have high demand. This project is also crucial for India to meet its commitments on climate change while also ensuring the long-term energy security of the country.
Background:
The concept of a Green Energy Corridor has emerged from a 2012 study by the Power Grid Corporation of India Limited (PGCIL); the study highlighted that the existing infrastructure is not capable of handling the anticipated surge in renewable energy. Following the study, Power Grid Corporation of India Limited submitted a detailed Green Energy Corridor report in September 2012. The report highlighted the need for a dedicated transmission infrastructure for large-scale solar and wind power plants. Green Energy Corridor as a project was implemented and formally started in 2015, with the Ministry of New and Renewable Energy (MNRE) playing a central role in its planning and execution.
The Existing Power Grid infrastructure was not designed to handle the fluctuations and large volumes of renewable energy; because of this, The Green Energy Corridor is essential to address this challenge of integrating renewable sources with the main power grid, which is often irregular and dispersed geographically. Without the Green Energy Corridor, a large portion of the renewable energy that is generated could go to waste due to a lack of proper infrastructure. The primary objective of the project is to include renewable electricity with the conventional grid to facilitate the transfer of large-scale renewable energy, which will improve the stability and reliability of the power grid. This will help in reducing India’s carbon footprint and promote ecologically sustainable growth.
Functioning:
The Green Energy Corridor primarily operates through two components:
The Inter-State Transmission System (ISTS) and Intra-State Transmission System (InSTS) along with supporting components like Renewable Energy Management Centres, Reactive Power Compensation Systems and Storage Solutions.
The Inter-State Transmission System (ISTS) is primarily responsible for the transfer of electricity across state boundaries. It plays an important role in evacuating power from renewable energy-rich states to regions with high demand. The ISTS focuses on creating high-voltage transmission lines and substations that connect renewable energy plants in remote or underdeveloped areas to the central grid. This system provides the transfer of renewable power over long distances; as part of the Green Energy Corridor, the ISTS provides support to integrate considerable–scale renewable energy by providing the required infrastructure needed to deliver power renewable energy plants to industrial and urban areas.
While the ISTS connects states, the Intra-State Transmission System (InSTS) operates within the boundaries of the state to facilitate the transfer of power between different regions or districts of the same state. It ensures that the renewable energy generated within a state can be transmitted to various parts of the state where the demand exists. It primarily focuses on boosting the local transmission infrastructure for renewable energy influx.
The Renewable Energy Management Centres (REMC) systems manage and balance the fluctuations of renewable energy generation. Renewable sources of energy such as solar and wind are irregular; that is, they do not continuously produce power. The REMC uses real-time data and efficient forecasting tools to predict the energy generation patterns from renewable energy sources and efficiently schedule their integration into the grid.
The Reactive Power Consumption (RPC) and Energy Storage Systems (ESS) are crucial in stabilising the voltage and maintaining the balance between supply and demand in the grid. RPC is used to correct the voltage drops and ensures that the power system remains stable when a large amount of renewable energy is integrated into the grid. ESS, like batteries, helps store the excess renewable power when the generation is high and dispatch it when the demand increases or generation reduces, thus increasing the efficiency and reliability of the grid.
Performance:
The Green Corridor Project includes both the Inter-State Transmission System (ISTS) and Intra-State Transmission System (InSTS), along with the establishment of Renewable Energy Management Centres (REMCs) and other control supporting infrastructure such as Reactive Power Compensation and Energy Storage Systems.
Renewable Energy Management Centres (REMCs) have been installed at the following locations:
Renewable Energy Management Centres Southern Region includes the following states: Tamil Nadu, Andhra Pradesh, Karnataka State Load Dispatch Centres (SLDCs) & South Regional Load Dispatch Centres (SRLDC).
Renewable Energy Management Centres Western Region includes the following states: Gujarat, Maharashtra, Madhya Pradesh State Load Dispatch Centres (SLDCs) and Western Regional Load Dispatch Centres (WRLDC).
Renewable Energy Management Centres North Region includes the following states: Rajasthan State Load Dispatch Centres (SLDCs), National Load Dispatch Centre (NLDC) New Delhi, and North Regional Load Dispatch Centre (NRLDC) New Delhi. These Renewable Energy Management Centres provide accurate forecasting, real-time monitoring and efficient scheduling of renewable energy to ensure the smooth integration of renewable energy into the National Grid.
The Green Energy Corridor is being implemented in phases:
Phase I
Phase 1, which is known as Intra-State Green Energy Corridor Phase 1, under which Intra-State Transmission System Phase I (InSTS-I), was first launched in 2015-16, with a total target of 9700 Cpower evacuation of approximately 24 GW of renewable energy in eight states: Tamil Nadu, Karnataka, Rajasthan, Andhra Pradesh, Maharashtra, Gujarat, Himachal Pradesh and Madhya Pradesh. While Phase 1 was expected to be completed by 2022, but the deadline was extended to 2023 and then further to 2024 and 2025. InSTS has an estimated budget of Rs 10,141.68 Crore. The funding includes a 40% Central Grant by the Ministry of New and Renewable Energy (MNRE), a 40% loan from KfW Germany and 20% equity by the State Transmission Utilities (STUs).
Out of the eight states, four states have completed all of their projects: Rajasthan, Madhya Pradesh, Karnataka and Tamil Nadu. The remaining four states, Andhra Pradesh and Himachal Pradesh, have been granted extensions for their projects up to June 2025, Maharashtra up to December 2024 and Gujarat up to March 2025. The projects have been delayed primarily due to delays in land acquisition, Right of Way (ROW) issues and forest clearances.
Whereas the ISTS component, which was commissioned in March 2020 with a budget of Rs 11,369 Crore with an aim to build 3,200 circuit kilometres (Circuit kilometres (ckt-km) refer to the total length of electrical transmission or distribution lines in terms of the actual path taken by each circuit, regardless of how many circuits are carried on the same physical structure) of transmission lines and substations with a capacity of 17,000 MVA. The funding includes 30% equity by PGCIL and 70% loan from KfW, the German state-owned development bank and Asian Development Bank (ADB). The project was expected to evacuate approximately 6 GW of renewable energy power. The Energy Transmission schemes for the solar park: Anantapur (1500MW), Pavagada (2000MW), Rewa (750MW), Bhadla-III (500MW), Bhadla-IV (250MW), Essel (750MW), Banaskantha (700MW) and Fatehgarh (1000MW) to be implemented by Power Grid Corporation of India Ltd (POWERGRID) has already been commissioned along with the Transmission System for 1000 MW AREPL Solar Park of Fatehgarh has also been commissioned by Fatehgarh 3 Beawar Transmission Limited (F3BTL) by Tariff-Based Competitive Bidding (TBCB) under Inter-State Transmission System (ISTS) Projects.
Phase II
Phase 2 includes the Intra-State Transmission System Phase II (InSTS-II) and Inter-State Transmission System (ISTS) project for Ladakh. InSTS-II was approved in January 2022 with the aim of facilitating the grid integration and evacuation of around 20 GW of renewable energy in seven states: Gujarat, Himachal Pradesh, Karnataka, Kerala, Rajasthan, Tamil Nadu and Uttar Pradesh.
The InSTS GEC- II scheme has a total target of 10,750 circuit kilometres of intra-state transmission lines and 27,500 MVA substations, which was approved by the Cabinet Committee on Economic Affairs (CCEA). The phase is expected to be complete by 2026-27.
| State | Estimated project cost (₹ Crore) | Central Financial Assistance (CFA) (₹ Crore) | Length of transmission lines envisaged (circuit kilometres) | Capacity of substations envisaged (MVA) | RE addition envisaged (MW) |
| Gujarat | 3636.73 | 1200.12 | 5138 | 5880 | 4000 |
| Himachal Pradesh | 489.49 | 161.53 | 62 | 761 | 317 |
| Karnataka | 1036.25 | 341.96 | 938 | 1225 | 2639 |
| Kerala | 420.32 | 138.71 | 224 | 620 | 452 |
| Rajasthan | 880.92 | 290.70 | 1170 | 1580 | 4023 |
| Tamil Nadu | 719.76 | 237.52 | 624 | 2200 | 4000 |
| Uttar Pradesh | 4847.86 | 1599.80 | 2597 | 15280 | 4000 |
| Total | 12,031.33 | 3970.34 | 10753 | 27546 | 19431 |
Source: Powermin.gov.in
The project cost is Rs 12031.33 Crore, out of which Rs 3970.34 Crore is given by the Ministry of New and Renewable Energy as central financial assistance. The remaining amount is available as a loan from KfW/REC/PFC. The transmission schemes will be implemented by the State Transmission Utilities (STUs) of the following seven states: Gujarat, Karnataka, Himachal Pradesh, Tamil Nadu, Rajasthan, Kerala, and Uttar Pradesh for evacuation of approximately 20 GW of renewable power in the same states. Currently, the STUs are open and inviting tenders for implementing the projects. Currently, the scheduled commissioning time duration for the projects under the scheme is March 2026. Following the scheme, some states have requested the revision of projects under Phase II, which have been approved by the Ministry of New and Renewable Energy.
The Ladakh- Kaithal Line
The ISTS Project for Ladakh which was sanctioned in October 2023, with an aim to establish transmission infrastructure for 13 GW of renewable energy projects in the Ladakh region; the plan is to establish a transmission line from the Union Territory of Ladakh to Kaithal in Haryana. This transmission line will evacuate power from a 13 GW renewable energy project in Ladakh to other parts of the country; this project also ensures a constant and reliable power supply to the Ladakh region along with Jammu & Kashmir. The expected date of completion is by 2029-30.
Phase III
The India Government is planning on advancing the third phase of the Green Energy Corridor to further increase the intra-state transmission infrastructure for renewable energy. The Budget for Phase 3 is projected to be approximately Rs 56,000 crore, with the Union Government expected to contribute around Rs 22,400 crore, covering around 40% of the total. The remaining funding will be sourced from the state governments and other stakeholders. The key states involved in this phase include Gujarat, Rajasthan, Maharashtra, Karnataka and Andhra Pradesh. Gujarat is expected to undertake projects worth over Rs 29,000 crore, followed by Rajasthan with projects exceeding Rs 9,000 crore.
Source: India Transmission Portal
Impact Assessment:
Phase II & III is aiming to integrate 44 GW of renewable energy. When fully operational, this could prevent large amounts of carbon emissions per year based on average emission factors. The Ladakh and Kaithal Line, where the plan is to evacuate 13 GW, will also mitigate a large amount of emissions by replacing fossil fuel-based generation. States like Tamil Nadu and Gujarat, which are heavily Industrialised and Urbanised, stand to gain more cleaner electricity inputs, which will reduce local air pollution and public health burden. Also, renewable power consumes less water in maintenance than thermal power plants, which will benefit arid zones like Rajasthan and Ladakh. The addition of more than 20,000 circuit kilometres of transmission lines and more than 50,000 MVA of substation capacity from both phases significantly increased India’s capability to integrate irregular renewable sources like solar and wind without destabilising the grid as many states are rich in renewable energy but are poor in consumption, like Rajasthan, Ladakh, etc. so, power generated from these states can be sent efficiently to high-demand states like Uttar Pradesh, Maharashtra, etc. This will help to reduce regional disparities and transmission congestion. Enhanced renewable energy evacuation supports India’s ambition to cut down on crude and coal imports, improving India’s energy independence.
Challenges:
The Green Energy Corridor (GEC) is a crucial initiative aiming to integrate renewable energy into India’s power grid. However, the implementation faces several challenges. Land acquisition and Rights of Way (RoW) delays are the main challenges due to legal disputes and resistance from local communities, which slow down infrastructure development. Coordination among the Union and State agencies is another significant issue as they both may have different priorities and strategies to execute these projects, which results in delays in projects and creates more inefficiencies. Financial constraints are also a very crucial issue. At the same time, central government funding is available, but many states struggle to meet their share of investment, which affects the project deadlines. Additionally, the technical complexities of managing irregular renewable energy sources demand advanced forecasting, grid stability mechanisms and storage solutions, which are still underdeveloped.
These challenges collectively impact the timeline, cost, and efficiency of the Green Energy Corridor.
Way Forward:
India ranks fourth globally in terms of its capacity to exploit wind power after China, the USA, and Germany. This shows India has an enormous scope of capitalising on renewable resources, especially wind and solar energy. This scheme will enhance the country’s power generation capacity with renewable energy. By aligning with India’s target of 500 GW non-fossil fuel capacity by 2030 and net-zero emissions by 2070, the Green Energy Corridor contributes to the national climate commitments under the Paris Agreement. Its execution has increased investments in clean power, reduced carbon intensity, and strengthened energy sovereignty. Beyond infrastructure, the Green Energy Corridor provides grid modernisation, supports manufacturing in India through domestic manufacturing of equipment, and generates employment across rural and semi-urban sectors. The inclusion of high-voltage lines from remote regions to high-consumption regions further decentralises energy access and reduces regional disparities. Though challenges like land acquisition, policy synchronisation, and irregular infrastructure exist, the long-term impact of the Green Energy Corridor can reshape India’s power ecosystem–making it greener and more equitable. This scheme has huge potential to give India access to a cleaner and energy-efficient ecosystem.
Thus, advancing the Green Energy Corridor is not only pivotal for India’s climate commitments but also a cornerstone of its strategy to achieve energy self-reliance and sustainable development.
References:
1. Baruah, R. (2025, March 19). Green Energy Corridor-III may get ₹22 cr assistance. Mint. https://www.livemint.com/industry/india-mnre-green-energy-corridor-iii-renewable-energy-gujarat-rajasthan-maharashtra-fossil-fuel-11742290288500.html
2. Books, T. S. (2023, December 9). Green Energy Corridor Phase-II. Spectrum India Online. https://spectrumindiaonline.com/green-energy-corridor-phase-ii/
3. Green Corridors – India. (2017). KfW Development Bank. https://www.kfw-entwicklungsbank.de/PDF/Entwicklungsfinanzierung/Issues-NEW/Indian_Green_Corridors_2017.pdf
4. Green Energy Corridor | Government of India | Ministry of Power. (n.d.). https://powermin.gov.in/en/content/green-energy-corridor
5. Green Energy Corridor Overview | MINISTRY OF NEW AND RENEWABLE ENERGY | India. (n.d.). https://mnre.gov.in/en/green-energy-corridor-0verview/
6. Green energy corridors deliver electricity | KfW Development Bank. (n.d.). https://www.kfw-entwicklungsbank.de/SDG-portal/SDG-13/Green-energy-corridors-India/
7. ITP :: India Transmission Portal. (n.d.). https://indiatransmission.org/green-energy-corridor#:~:text=The%20Green%20Energy%20Corridor%20Project,the%20Ministry%20in%202015%2D16.
8. Kasiva, K. S. &. (2023, October 18). Green Energy Corridors: Building the Future for Sustainable energy. King Stubb & Kasiva. https://ksandk.com/energy/green-energy-corridors-future-for-sustainable-energy/
9. Mendonza, A. (2025, February 3). India’s 2025-26 Budget: A Green Energy perspective. Energy Central. https://energycentral.com/c/ec/indias-2025-26-budget-green-energy-perspective
10. Samant, S. (2025, February 6). Phase three of intra-state Green Energy Corridor in works: Joshi. The Economic Times. https://economictimes.indiatimes.com/industry/renewables/phase-three-of-intra-state-green-energy-corridor-in-works-joshi/articleshow/117991745.cms?from=mdr
About the Contributor: Yash Kumar is a research intern at IMPRI, pursuing his Bachelor of Arts (Hons) in Economics and Sociology with a minor in Political Science from Christ University, Bangalore.
Acknowledgement: The author would like to Thank Ms. Aasthaba Jadeja for supporting and reviewing the Article.
Disclaimer: All views expressed in the article belong solely to the authors and not necessarily to the organization.
Read more at IMPRI:
Exploring Decentralized Governance and Blockchain’s Role in India’s Bureaucratic Trust Crisis
