Over 35 GW RE Capacity at Risk of Grid Curtailment in FY27: Crisil Ratings
Crisil Ratings estimates that over 35 GW of renewable energy capacity could face curtailment risk by FY27 due to limited transmission capacity and reliance on temporary grid access.
March 20, 2026. By Mrinmoy Dey
Curtailment for a prolonged duration can impact the equity internal rate of return (IRR) and the debt service coverage ratio (DSCR). In the milieu, support from the sponsor and liquidity buffers will be crucial to mitigate risks to interest servicing in the initial period of the projects, Crisil stated.
To give a background, the type of network access determines the extent of risk of power curtailment. There are two types of network access — long-term general network access (LT GNA) and temporary general network access (TGNA). LT GNA projects have dedicated transmission infrastructure, multi-year access to the grid, and stronger scheduling rights. TGNA projects, on the other hand, are partially commissioned or do not have dedicated transmission infrastructure.
TGNA provides time-bound access to the transmission network and hence faces a higher risk of curtailment. This is because, with limited inter-state transmission system (ISTS) capacity available, a project with LTGNA supplying inter-state would typically be evacuated first vis-à-vis an inter-state project with a TGNA, Crisil stated.
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 TGNA, which faced about 80 percent of the total curtailment in India between April and December 2025. Furthermore, TGNA projects had about 39 percent of their capacities curtailed from November 2025 to February 2026.
This was more prominent in Rajasthan and Gujarat, which contribute 45 percent 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 approximately 50 percent.
Ankit Hakhu, Director, Crisil Ratings, said, “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. 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 percent 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 maintain grid stability, and thereby potential credit risk elevation, especially for projects in the stabilisation phase.
Ankush Tyagi, Associate Director, Crisil Ratings, said, “Three factors can limit the impact of curtailment on the 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 a back-ended repayment structure. Secondly, sponsor support commitment remains strong, given the IRRs are still adequate despite the 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.”
Meanwhile, initiatives are underway to address grid curtailment to an extent in the medium to long term. These include policy measures such as hour-split access that allows solar capacities to access the grid only during solar hours, thus freeing up access for wind and storage projects during the non-solar hours. Additionally, increasing battery energy storage solution adoption can help store excess daytime generation for use during peak hours. These efforts will improve transmission network utilisation over time, Crisil stated.
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