Ravenous Appetite: Can India’s Power Sector Handle $70 Billion Worth Of Orders? | Open Interest

India's road to Viksit Bharat is power hungry. The target is stiff — 500 GW by 2030. In other words, this translates to an addition of 50 GW every year from here. For the power transmission and distribution (T&D) sector, this means a requirement of approximately Rs 9 lakh crore investment to meet the growing demand from the renewable energy sector.

In other words, India's ambitious renewable energy target is creating a significant growth opportunity for the T&D sector is up against a stiff target to more than double its execution capacity.

Where do we stand currently? India already reached 200 GW by the end of the financial year gone by, i.e. FY25. and thus needs to add at least 50 GW every year to stay on track. For this, the government is expected to tender 60–75 GW of renewable capacity in the next two years alone.

Under the National Electricity Plan (NEP), the government has laid out a 10-year roadmap, broken into two phases: 2022–27 and 2027–32.

Phase 1:

To achieve the 2027 target, the T&D network must expand by 70% in terms of 765 kV transmission lines and HVDC infrastructure to efficiently transfer power from generation sites to end users. An equivalent increase in substation capacity is also required to manage this additional load, according to the NEP for Transmission.

According to Crisil, India’s inter-state transmission system will need capital expenditure of over Rs 1 lakh crore during FY26 and FY27 alone—double the cumulative Rs 50,000 crore spent in FY24 and FY25.

Overall, an estimated Rs 4.25 lakh crore will be needed between 2022–27 to expand transmission capacity. Although progress has been slow over the past three years, activity is expected to accelerate over the next two years.

Phase 2:

In the second phase (2027–32), the sector will require an additional Rs 4.9 lakh crore for transmission lines, substations, and other inter- and intra-state transmission infrastructure. This investment is critical to move power efficiently both across the country and within states.

Of the total Rs 9 lakh crore required, projects worth over Rs 3 lakh crore have already been tendered. Given the typical execution time of 2-3 years per project—and the fact that infrastructure projects often take twice as long as setting up renewable generation—most orders must be placed by 2029 to meet the 2032 NEP target.

This surge in demand has already led to multi-fold increases in order books for T&D companies. Capital goods and engineering firms involved in power T&D have seen orders grow 2–3 times since March 2023.

Key players in this segment include Power Grid Corporation of India, Adani Energy Solutions, Hitachi Energy, Siemens Energy, GE Vernova T&D, and TARIL. Industry experts estimate India will need at least a dozen more players of this scale to meet future demand. About Rs 6 lakh crore in orders are expected to flow to these companies over the next four years if the NEP targets are to be met by 2032.

Power Grid, for instance, stated in its March investor presentation that it is working on a planned outlay of Rs 3.06 lakh crore up to 2032.

India’s power capex cycle is thus poised for a major uptrend. Many leading companies already have a book-to-bill ratio—order book relative to FY25 revenue—of more than 2.5 times.

The big question: Can India’s T&D sector build enough capacity to deliver these massive orders on time? If it can, the coming years could mark a golden era for India’s power transmission and distribution industry.