Cabinet Clears ₹1.86 Lakh Crore Green Energy Corridor Phase-III for 135 GW Renewable Energy

The Union Cabinet on Wednesday approved the Green Energy Corridor Phase-III (GEC-III) scheme with a total outlay of ₹1,86,405 crore to strengthen India’s intra-state power transmission network and facilitate the evacuation of up to 135 GW of renewable energy across states and Union Territories.

The scheme, approved at a meeting chaired by Prime Minister Narendra Modi, is aimed at improving grid integration as India works towards its target of 500 GW of renewable energy capacity by 2030. The project is scheduled to be implemented by FY 2032-33.

Of the total allocation, ₹1,36,378 crore will be spent on developing intra-state transmission systems, while ₹50,000 crore will support the deployment of 50 GWh of Battery Energy Storage Systems (BESS). The storage systems can be installed at renewable energy developer or generator sites, or at other locations important for grid flexibility.

The battery storage component is intended to address challenges linked to the intermittent nature of renewable power, including grid congestion, peak-hour curtailment and demand during non-solar hours.

The Centre will provide ₹54,082 crore in Central Financial Support (CFA) under the scheme. According to the government, this assistance will help offset intra-state transmission charges and keep electricity costs lower for consumers.

All greenfield projects under the transmission component will be developed through Tariff Based Competitive Bidding (TBCB). Brownfield upgrades and network-strengthening works will be undertaken on a Cost Plus Basis. State Transmission Utilities will serve as the overall implementing agencies, while Transmission Service Providers will participate under TBCB through a Build-Own-Operate-Maintain (BOOM) model.

The government said GEC-III will also contribute to India's goal of achieving 900 GW of installed non-fossil capacity by 2035, besides strengthening long-term energy security and supporting lower-carbon growth.

The scheme is expected to create direct and indirect employment in the power, manufacturing and construction sectors, while battery storage deployment will support jobs in India's domestic energy-storage industry. It will also generate skilled employment in operations, maintenance and grid management across participating states.