Over 35 GW RE capacity at risk of grid curtailment in fiscal 2027: Crisil Ratings

Surging renewable energy (RE) capacity addition amid slower deployment of transmission infrastructure poses a risk of grid curtailment for more than 35 GW of capacity in fiscal 2027 owing to lack of long-term grid access, according to Crisil Ratings.

The analysts said the curtailment for prolonged duration can impact the equity internal rate of return (IRR) and the debt service coverage ratio (DSCR). In this context, support from the sponsor and liquidity buffers will be crucial to mitigate risks to interest servicing in the initial period of the projects.

A rapid increase in capacity addition of RE, especially solar, has heightened the risk of evacuation for surplus power, especially during daytime. This is driving curtailment for projects especially with temporary general network access (TGNA), which faced 80% of the total curtailment in India between April and December 2025. Furthermore, TGNA projects had 39% of their capacities curtailed from November 2025 to February 2026.

This was more prominent in Rajasthan and Gujarat, which contribute 45% of the total RE generation capacity in India. Given a greater mismatch of generation and evacuation infrastructure, TGNA capacity of 13–14 GW in these zones suffered a higher curtailment of up to 50%.

[While long-term general network access (LT GNA) projects have dedicated transmission infrastructure, multi-year grid access, and priority scheduling, TGNA projects are typically partially commissioned or lack dedicated transmission. Because TGNA offers only time-bound access, it carries a higher risk of curtailment. With limited inter-state transmission capacity, a project with LTGNA supplying inter-state would typically be evacuated first vis-à-vis an inter-state project with a TGNA.]

Crisil projects 20 GW of fresh ISTS (inter-state transmission system) RE capacity to be commissioned and start on TGNA in fiscal 2027. “This, with existing capacity with TGNA (of 17 GW as on February 2026 as against 200 GW of installed solar and wind capacities as of February 2026), may result in RE capacity exposed to the risk of curtailment to reach 35–37 GW in fiscal 2027,” said Ankit Hakhu, Director. “That said, capacities currently on a TGNA are likely to get converted to LT GNA by the end of fiscal 2027 with ongoing transmission expansion coming online.”

The impact of a high curtailment can be significant on an RE project. An average curtailment of 50% for a period of 12 months can impact the project DSCRs by up to 10 bps and equity IRR by up to 150 bps. This highlights increasing complexity in the sector with integration of intermittent power sources like wind and solar requiring advanced grid management to main grid stability, and thereby potential credit risk elevation, especially for projects in stabilisation phase.

Says Ankush Tyagi, associate director, “Three factors can limit the impact of curtailment on credit quality of RE projects in the near term. Firstly, TGNA is more prominent in the recently or partially commissioned projects, which are either in a loan moratorium phase or have limited principal repayment obligation due to back-ended repayment structure. Secondly, sponsor support commitment remains strong, given the IRRs are still adequate despite reduction and TGNA is likely to get converted to LT GNA within the 10-12 months as additional transmission capacity comes online. And thirdly, liquidity buffers in the form of debt service reserve accounts mitigate near-term implications on interest servicing.”