Over 35 GW of renewable energy capacity in India could face grid curtailment in fiscal 2027, warns Crisil Ratings
It attributes rapid capacity additions and slower expansion of transmission infrastructure as the reasons
Most curtailment has been reported in Rajasthan and Gujarat, which together produce about 45% of India’s renewable energy
Analysts caution that prolonged curtailment could affect project finances, lowering debt service coverage ratios by up to 10 basis points and equity IRR by up to 150 basis points
Over 35 GW of renewable energy capacity in India could face grid curtailment in fiscal year 2027, according to Crisil Ratings. The agency attributes this risk to the rapid growth in renewable energy installations alongside the slower expansion of transmission infrastructure.
There is especially an increase in solar capacity addition that has heightened the risk of evacuation for excess power produced, especially during daytime.
Between April 2025 and December 2025, 80% of total curtailment in India happened within temporary general network access (TGNA). Between November 2025 and February 2026, around 39% of TGNA projects were curtailed, according to Crisil.
TGNA is a type of network access with no dedicated transmission infrastructure and time-bound access to the transmission network and limited inter-state transmission system (ISTS) capacity.
Most of the curtailment happened in Rajasthan and Gujarat, which together produce about 45% of India’s renewable energy. Because transmission capacity has not kept pace with generation, about 13 GW to 14 GW of TGNA capacity in these states faced curtailment of up to 50%, analysts add.
“We project ~20 GW of fresh ISTS 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,” forecasts Crisil Ratings Director Ankit Hakhu.
He also expects current TGNA capacities to be converted to long-term general network access (LT GNA) by the end of fiscal year 2027 with an increase in transmission expansion. LT GNA operates with dedicated transmission infrastructure, multi-year access to the grid, and stronger scheduling rights.
Prolonged curtailment could lead to, as the analysts explain, a financial impact on a renewable energy project in terms of equity internal rate of return (IRR) and debt service coverage ratio (DSCR). They say that an average curtailment of 50% for 12 months can impact project DSCRs by up to 10 basis points (bps) and equity IRR by up to 150 bps.
As more intermittent sources of energy, like wind and solar, come online, managing the grid will become more complex. Without strong grid management, projects may face higher financial and credit risks.
While measures such as hour-split grid access for solar projects and adding storage are being introduced to reduce curtailment, Crisil Associate Director Ankush Tyagi says 3 factors could help limit the impact of curtailment on the credit quality of renewable energy 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,” explains Tyagi.
