Current Affairs · · Prelims · Economy

Cabinet approves ₹1.86 lakh crore Green Energy Corridor Phase III

The Cabinet approved Green Energy Corridor Phase III on 30 September 2026 with an announced outlay of ₹1,86,405 crore. It aims to strengthen intra-state lines for up to 135 GW of renewable power and deploy 50 GWh of battery storage by FY 2032–33. Central support of ₹54,082 crore is included in the total.

Event date:

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  1. Context1 / 5

    On 30 September 2026, the Union Cabinet approved Green Energy Corridor Phase III (GEC-III). It aims to strengthen intra-state transmission so States and Union Territories can carry power from up to 135 GW of renewable generation. It also provides for 50 GWh of battery energy storage.

    The scheme is targeted for completion by FY 2032–33. The government links it to its 900 GW installed non-fossil capacity target for 2035.

    The basic problem is that new wind and solar plants need lines and substations to deliver their electricity. Without sufficient grid capacity, renewable output may be curtailed even when generation is available.

  2. Key highlights2 / 5

    The Cabinet announced a total scheme outlay of ₹1,86,405 crore. Central support of ₹54,082 crore is included in that total and is intended to offset intra-state transmission charges.

    ComponentAnnounced outlay (₹ crore)Purpose
    Intra-State Transmission Systems1,36,378Lines and substations within States and Union Territories
    Battery Energy Storage Systems50,000Deployment of 50 GWh of storage
    Total scheme outlay1,86,405Evacuation of power from up to 135 GW by FY 2032–33
    Of which: central support54,082Helps offset intra-state transmission charges

    Arithmetic: The two named components add to ₹1,86,378 crore, which is ₹27 crore less than the announced total. The Cabinet release does not itemise that difference. Central support is a part of the total, not an additional component.

    Implementation: State Transmission Utilities oversee the scheme. New intra-state projects use tariff-based competitive bidding (TBCB) under a build-own-operate-maintain model; brownfield upgrades use a cost-plus basis. Batteries are intended to help manage intermittency, congestion, peak-hour curtailment and non-solar-hour demand.

  3. Key concepts3 / 5

    Intra-state versus inter-state transmission

    InSTS carries power within a State, linking renewable generation zones to the State grid. ISTS connects States and regions. Both are needed when generation is distant from demand.

    Curtailment

    Grid operators sometimes reduce a plant's potential output because lines are congested, demand is low or the system cannot absorb the power. Stronger transmission and storage can reduce avoidable curtailment.

    Battery Energy Storage System (BESS)

    A BESS charges when power is available and releases it later, including after sunset or during a demand peak. GW describes power capacity; GWh describes stored energy.

    Tariff-based competitive bidding

    Eligible firms compete to develop and run transmission assets, with the tariff determined through the tender. The selected provider builds, owns, operates and maintains a greenfield project.

  4. Note4 / 5

    How the phases compare

    Earlier schemes built intra-state corridors and a separate inter-state link for Ladakh. GEC-III adds large-scale battery storage to its intra-state package.

    PhaseScopeCapacity served or plannedOutlay and central support
    GEC-I, from 2015–16Intra-state works in Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan and Tamil NaduAbout 24 GW₹10,142 crore; 40% central grant, 40% KfW loan, 20% utility equity
    GEC-II intra-state, approved 2022Gujarat, Himachal Pradesh, Karnataka, Kerala, Rajasthan, Tamil Nadu and Uttar PradeshAbout 20 GW₹12,031 crore; about ₹3,970 crore central support
    GEC-II inter-state, Ladakh, approved 2023Line from Pang to Kaithal5 GW HVDC terminals for a planned 13 GW renewable project₹20,774 crore; about ₹8,309 crore central support
    GEC-III, approved 2026Intra-state works plus BESS across States and Union TerritoriesUp to 135 GW; 50 GWh storage₹1,86,405 crore; ₹54,082 crore central support

    GEC-III's announced outlay is much larger than the two earlier intra-state phases combined. Its central support is about 29% of the announced total. India also aims for 500 GW of non-fossil capacity by 2030. The Cabinet release does not say whether GEC-III's 135 GW is additional to capacity served by earlier phases.

  5. Way forward5 / 5

    Suggested priorities

    • Coordinate plants, storage and lines: Plan transmission before or alongside renewable generation so completed plants can deliver power.
    • Manage land and ecology: Route lines carefully around forests and biodiversity areas while addressing right-of-way delays.
    • Strengthen the demand end: Improve distribution-company readiness and electricity markets so available renewable power can be used rather than curtailed.

    The success test is not only how many kilometres of line are built. It is whether renewable electricity can move reliably to consumers when they need it.

Sources

Syllabus

PaperSubjectSub-topic
PrelimsEconomyEnergy infrastructure, GEC phases, transmission and storage
GS3EconomyEnergy infrastructure and grid integration of renewable power
GS3EnvironmentRenewable energy and non-fossil capacity targets

Topics

Climate ChangeIndustryMiscellaneous Science and Technology

Related previous-year questions

Asked in earlier UPSC Prelims papers on this topic. Answer, then check.

  1. UPSC Prelims 2015 · Indian Economy · Industry

    With reference to the Indian Renewable Energy Development Agency Limited (IREDA), which of the following statements is/are correct? 1. It is a Public Limited Government Company. 2. It is a Non-Banking Financial Company. Select the correct answer using the code given below.

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Show answer

    Answer: C. VERDICT: The answer is both 1 and 2. IREDA is a public limited government company and a non banking financial company. ANALYSIS: The Indian Renewable Energy Development Agency Limited was established in 1987 as a public limited government company under the administrative control of the Ministry of New and Renewable Energy, and it is registered as a non banking financial institution. Its function is to promote, develop and extend financial assistance to renewable energy and energy efficiency and conservation projects. The two statements describe its corporate form and its financial classification respectively, and both are accurate, so the combined option is correct. SOURCE: IREDA official material, with reporting on green bonds. Source type EN. HOW TO CRACK IT: A specialised lender created by a ministry is almost always structured as a government company registered as a non banking financial company, because it lends without taking deposits, and that structural pattern lets you reason through the question without institutional recall. Apply the same template to bodies such as PFC, REC and NABARD, checking whether each takes deposits, since that is what separates a bank from an NBFC. The news hooks were IREDA's green bond issuance and its Miniratna status.

    Difficulty: hard · statement

    Open this question on its own page, with the full explanation →

  2. UPSC Prelims 2026 · Environment and Ecology · Climate Change

    Which of the following statements with regard to Green Hydrogen is/are correct? 1. It is decarbonized hydrogen obtained from natural gas reforming combined with carbon capture and storage (CCS). 2. It is produced using electrolysis of water with electricity generated by renewable energy. 3. National Green Hydrogen Mission of India aims for abatement of nearly 50 MMT of annual greenhouse gas emissions by 2030. Select the answer using the code given below:

    1. 1 only
    2. 2 and 3 only
    3. 2 only
    4. 1, 2 and 3
    Show answer

    Answer: B. Statement 1 is not correct: This describes blue hydrogen, not green hydrogen. In blue hydrogen, the raw material is natural gas (mainly methane). When this gas is processed, two things are produced: hydrogen, a useful clean fuel, and carbon dioxide, a greenhouse gas. Normally this carbon dioxide would go into the atmosphere, but in blue hydrogen it is captured and stored underground using Carbon Capture and Storage (CCS). Hydrogen made from natural gas with the harmful carbon captured instead of released is therefore blue hydrogen. Statement 2 is correct: Green hydrogen is hydrogen produced by splitting water into hydrogen and oxygen using electricity from renewable sources like solar or wind energy. Statement 3 is correct: The National Green Hydrogen Mission aims to make India a global hub for the production, use, and export of green hydrogen and its derivatives. Under the mission, India targets the production of at least 5 million metric tonnes (MMT) of green hydrogen annually by 2030. The Mission is expected to create over 6 lakh jobs, reduce fossil fuel imports by more than Rs 1 lakh crore, and avoid nearly 50 MMT of greenhouse gas emissions every year by 2030. Statements 2 and 3 are correct, so the answer is Option (b).

    Difficulty: medium · statement

    Open this question on its own page, with the full explanation →

Practice questions

  1. Consider these statements on GEC-III: 1. It strengthens intra-state transmission. 2. It includes battery storage. 3. Greenfield intra-state projects are to be awarded by nomination to State Transmission Utilities. Which are correct?

    1. 1 and 2 only
    2. 1 and 3 only
    3. 2 and 3 only
    4. 1, 2 and 3
    Show answer

    Answer: A. Statements 1 and 2 are correct. Greenfield projects use tariff-based competitive bidding; State Transmission Utilities oversee implementation.

    Difficulty: medium · statement

  2. Consider these statements about renewable-energy curtailment: 1. It may occur when the grid cannot absorb available output. 2. Transmission congestion can cause it. 3. Battery storage cannot reduce it. Which are correct?

    1. 2 and 3 only
    2. 1 and 3 only
    3. 1 and 2 only
    4. 1, 2 and 3
    Show answer

    Answer: C. Statements 1 and 2 are correct. Storage can absorb power when it is available and release it later, helping reduce curtailment.

    Difficulty: medium · statement

  3. Consider these statements on earlier Green Energy Corridor phases: 1. GEC-I covered eight renewable-rich States and aimed to integrate about 24 GW. 2. Intra-state GEC-II covered seven States and aimed at about 20 GW. 3. GEC-I was financed entirely by central grants. Which are correct?

    1. 1 and 3 only
    2. 2 and 3 only
    3. 1, 2 and 3
    4. 1 and 2 only
    Show answer

    Answer: D. Statements 1 and 2 are correct. GEC-I funding combined a 40% central grant, 40% KfW loan and 20% State utility equity.

    Difficulty: medium · statement

Mains practice

Answer-writing practice on this article. Attempt it first, then open the hints.

  1. GS3 · 250 words

    Transmission is as important as generation for India’s renewable-energy transition. Discuss with reference to the Green Energy Corridor.

    Show hints
    1. Explain how remote generation zones create evacuation needs.
    2. Compare intra-state and inter-state transmission roles.
    3. Use the GEC phases and the new storage component.
    4. Assess competitive bidding and implementation capacity.
    5. Address land, forest and right-of-way constraints.
  2. GS3 · 250 words

    Examine the challenges of integrating variable renewable energy into the grid and the role of battery storage in addressing them.

    Show hints
    1. Describe the variability of solar and wind generation.
    2. Explain congestion and renewable curtailment.
    3. Show how batteries shift energy to non-solar hours.
    4. Discuss the need for complementary transmission and flexible generation.
    5. Assess distribution-company and market readiness.