Rapid renewables rollout vs demand mismatch driving up power costs: CEA

India's rapid renewable energy rollout is straining grid operations and contributing to rising electricity supply costs as demand growth has not kept pace, a senior official at the Central Electricity Authority (CEA) said on Friday.

India's renewable power output rose at its fastest pace since 2022 in the first half of 2025. The country achieved 50% of its installed electricity capacity from non-fossil fuel sources earlier this year, amid its target of adding 500 gigawatts by 2030.

However, India is building transmission based on potential renewable energy generation rather than actual capacity or demand and this approach has led to skyrocketing transmission charges, which is concerning state power utilities, Chairperson Ghanshyam Prasad said at a forum organised by The Energy and Resources Institute (TERI) in New Delhi.

Transmission charges are costs involved with the high-voltage transmission network that carries electricity, and are typically paid by purchasers, usually distribution companies, to power producers.

India is likely to add over 40 GW of renewable energy this year, said Prasad, adding that without demand, the surplus would be very difficult to manage.

The mismatch between transmission readiness and renewable commissioning keeps grid absorption uncertain, resulting in some renewable projects lacking power purchase agreements, he added.

To address these challenges, the CEA will revise transmission plans every six months to reflect real-time developments, and is working with the India Meteorological Department to improve localised weather forecasting for solar and wind generation, Prasad said.

He also advocated for carefully planned grid integration, and stressed the need for resource adequacy planning at both national and state levels, allowing distribution companies to anticipate future requirements and tie up generation resources accordingly.

Unless this happens, "clean energy developers may face situations where capacity is built but cannot be evacuated or sold," he said.

To maintain grid security and reliability, India must continue investing in coal, nuclear, hydro, and gas alongside renewables, he said.

"Until we see the system holistically - planning, execution, grid operation, and cost - we will go wrong," the official said.