Cabinet clears ₹1.8 lakh-crore Green Energy Corridor-III

The Union Cabinet approved the Green Energy Corridor Phase-III (GEC-III) scheme on Wednesday, a large programme aimed at reinforcing India’s Intra-State Transmission System (InSTS) so that it can evacuate up to 135 gigawatts (GW) of renewable energy across states and Union territories.

The scheme also provides for 50 gigawatt-hours (GWh) of Battery Energy Storage Systems (BESS), to be deployed either at the premises of renewable energy developers and generators or at other locations considered important for grid flexibility.

The government said this is needed because solar and wind power do not flow steadily. Solar panels work only when the sun shines, and wind depends on the weather. Often the power lines are too crowded to carry all the electricity being produced, so some clean energy goes to waste, particularly during peak solar hours.

The scheme tackles this in two ways. First, it will strengthen the electricity networks inside states and Union territories so they can carry up to 135 GW of renewable energy. Second, it will set up battery storage systems, with a total capacity of 50 GWh. Battery storage addresses both problems by absorbing surplus generation when supply is abundant and discharging it during evening peaks or when solar output is unavailable.

“India’s power generation capacity is over 500 GW right now, of which 52% is renewable energy. There are not many nations that can claim this feat. India has a commitment towards environment that is consistent. We are taking steps to reduce fossil fuel dependence, pollution and increase environmental protection,” said information and broadcasting minister Ashwini Vaishnaw at a media cabinet briefing in New Delhi.

The total project outlay is ₹1,86,405 crore, targeted for completion by FY 2032-33. Of this, ₹1,36,378 crore is earmarked for InSTS development and ₹50,000 crore for the 50 GWh of BESS. The Central Government will contribute ₹54,082 crore.

The implementation framework distinguishes between new and existing infrastructure. All greenfield transmission projects will be awarded through Tariff Based Competitive Bidding (TBCB), in which bidders compete on the lowest tariff. Successful Transmission Service Providers (TSPs) will operate on a Build-Own-Operate-Maintain (BOOM) model, taking responsibility for the asset across its life cycle. Brownfield upgrades and network strengthening, on the other hand, will be executed on a Cost Plus Basis (CPB), where the actual cost incurred is reimbursed along with an agreed margin. State Transmission Utilities, the state-level power grid companies, will oversee the work.

The scheme is closely tied to India’s target of 900 GW of installed non-fossil capacity by 2035. The government says it will help cut pollution and carbon emissions. It will also strengthen the country’s long-term energy security.