India's Renewable Energy Goals Face Hurdles Due to Transmission Bottlenecks
A report by InGovern Research Services highlights the challenges faced by Power Grid Corporation of India Ltd (PGCIL) in meeting India's ambitious renewable energy goals.
Transmission Delays and Execution Challenges
Power Grid Corporation of India Ltd (PGCIL) is struggling with delays in building power transmission lines, which are caused by land acquisition and other issues.
- Land acquisition challenges
- Right-of-way disputes
- Forest clearance issues
These delays are affecting PGCIL's profits and its stock market performance.
Capital Expenditure Programme
PGCIL is undertaking a large capital expenditure program of ₹3 lakh crore through FY32, including ₹32,000 crore planned for FY26 alone.
- Existing project pipeline worth ₹1.48 lakh crore
- Aggressive capital expenditure programme of ₹3 lakh crore through FY32
Financial Performance
Execution delays are beginning to weigh on financial performance. PGCIL's return on net worth has declined from 18.5% in FY23 to around 15.3% in the first nine months of FY26.
- Return on net worth decline from 18.5% in FY23 to 15.3% in FY26
- Capital tied up in unfinished projects surged to ₹1.2 lakh crore
Impact on Renewable Energy Output
Transmission delays are also impacting renewable energy output.
Stock Performance
Despite stable annual profits of ₹15,000-16,000 crore, PGCIL's stock performance has lagged.
- 12% CAGR between FY20 and FY26
- 18% CAGR for the Nifty 50
Dividend Payouts
Dividend payouts have also declined-from ₹14.75 per share in FY22 to ₹9.00 per share in FY25-as the company retains more earnings to fund its capex programme with no corresponding increase in commissioned assets.