Interview with Harsh Shah: “The big shift now is from adding capacity to delivering it reliably
October 23, 2026
sector InvIT, shared his views on the current state of the power sector, key issues and challenges, and the opportunities for private players in the transmission segment. He also discussed IndiGrid’s key achievements over the past year, its top priorities and its key goals for the next one to two years. Edited excerpts…
What is your assessment of the current state of the power sector? How has the sector evolved over the years?
India’s power sector is in the strongest position it has ever been in, and also at its most interesting moment. A decade ago, the conversation was about shortages and load shedding. Today, it is about how fast we can build, connect and balance clean energy.
The numbers tell the story. India’s installed capacity has grown to around 552 GW, and for the first time, more than half of it – over 300 GW – comes from non-fossil sources. Renewable capacity alone has grown more than three-and-a-half times, from about 76 GW in 2014 to around 274 GW in March 2026. Last year, we added a record 55 GW of non-fossil capacity, nearly double the previous best. Demand has kept pace too: peak demand touched an all-time high of about 271 GW in May 2026.
The grid has grown alongside. Our transmission network has expanded from about 290,000 ckt km in 2014 to over 510,000 ckt km today, creating one of the largest synchronous national grids in the world.
The big shift now is from adding capacity to delivering it reliably. Solar and wind need strong transmission, storage and flexible grids to reach consumers when they need power. That is where the sector’s next chapter will be written – and it is exactly where private capital and specialised platforms like IndiGrid can play a meaningful role.
According to you, what will be the key growth areas in the sector over the next one to two years?
I see three clear growth engines over the next one to two years.
The first is transmission. The Central Electricity Authority’s (CEA) latest plan envisages around 137,000 ckt km of new lines and about 830,000 MVA of substation capacity by 2035-36, with an estimated investment of nearly Rs 7.9 lakh crore. A large part of this will be awarded and built over the next few years, including high-capacity HVDC corridors from renewable-rich states like Rajasthan.
The second is energy storage. Solar and wind now account for the bulk of new capacity, with solar leading the way – it contributed about 44.6 GW of last year’s record additions. But solar peaks at midday and wind varies with the season, while demand peaks in the evening. Storage is what bridges that gap. Battery storage has moved from pilots to large tenders in just two to three years, supported by government viability gap funding (VGF) for around 30 GWh of standalone storage. Pumped hydro will complement this for longer durations.
The third is firm and round-the-clock clean power – hybrid projects that combine solar, wind and storage to deliver power on demand, which is what distribution companies and industries increasingly want. Alongside these, I expect asset monetisation to gather real momentum.
Underpinning all of this is demand that continues to grow at a fast pace. Rising incomes and cooling needs, the expansion of manufacturing, electric mobility and newer sources of load such as data centres and green hydrogen are all adding to consumption. Peak demand touched a record of about 271 GW in May 2026, in line with what the CEA had projected for FY 2027. The CEA now expects peak demand to reach about 459 GW by 2035-36, with annual energy requirement rising to around 3,365 BUs. That is an increase of nearly 70 per cent in a decade – and the investments in grid, generation and storage are what will make it possible.
What are the key issues and challenges in the renewable energy segment? What are the measures needed to address these?
Renewable energy has been India’s biggest success story, but the next phase needs us to solve some very practical problems. The first is the mismatch between how fast generation is built and how fast transmission follows. A solar plant can come up in 18 months, while a transmission line often takes three years or more, mainly due to right-of-way (RoW) and land challenges.
The second is offtake. Roughly 40-45 GW of awarded capacity is still waiting for power purchase agreements to be signed. This uncertainty has slowed fresh bidding – awards fell from about 40 GW in FY 2025 to under 15 GW in FY 2026.
The third is flexibility. Solar, which makes up the bulk of new capacity, peaks at midday, while wind output varies by season and time of day. Without storage, more renewable capacity simply means surplus power at noon and a shortfall during the evening peak.
The solutions are well understood. We need generation and transmission planning to move in lockstep, with anticipatory transmission built ahead of demand in renewable zones. Storage should be integrated into new renewable capacity by design, not as an afterthought. On offtake, bids should be issued only after states have firmly committed to buying the power, and power sale agreements should be signed within a defined timeline once projects are awarded. Finally, continued focus on discom finances and payment discipline remains fundamental to the entire value chain.
What are the biggest opportunities for private players in the transmission segment? What is your outlook for the segment?
For private players, I see three big opportunities. The first is greenfield projects through tariff-based competitive bidding, which will carry a large share of the investment planned by the CEA until 2035-36. The second is intra-state transmission, where states are expanding their networks rapidly to connect renewable parks and meet local demand.
The third, and perhaps the most undertapped, is asset monetisation. The Ministry of Power (MoP) put a framework in place for this – the acquire-operate-maintain-transfer (AOMT) model – back in 2022. It gives states a clear route to hand over operating transmission assets for a fixed period, receive capital upfront and take the assets back at the end.
The framework has been there for some time; what we need now is adoption by the authorities. Applying AOMT to state transmission assets, by our estimates, could release around Rs 4.5 lakh crore of capital for states – money that can go straight into new infrastructure and strengthening the balance sheets of the discoms. The most efficient way to unlock this is to partner with established platforms, such as listed infrastructure investment trusts (InvITs), that already have the operating track record, investor base, and specialised operations and maintenance capabilities in place. Transmission projects run on 25-35-year contracts with availability-based payments, which give stable, predictable cash flows – exactly what long-only institutional and global investors look for when they commit capital to India.
The challenges are largely in execution: RoW, land and supply chain constraints for critical equipment like transformers and conductors. Players with strong project management, deep supplier relationships and access to low-cost capital will be best placed. Overall, our outlook for the segment is very positive – the next decade will be the busiest in the history of India’s grid.
How do you see BESS costs and technology evolving over the next few years? What measures are needed to make these projects viable in India?
The cost story in battery storage has two sides. Battery prices fell sharply for several years but have inched up again recently – as lithium prices climbed, the prices of the lithium iron phosphate cells used in grid-scale storage rose by more than 20 per cent in the six months leading up to April 2026. Project tariffs, however, have kept moving down. According to the MoP, the cost of storage discovered through competitive bidding fell from about Rs 10.18 per kWh in 2022-23 to around Rs 2.10 per kWh in recent bids without VGF.
This divergence needs to be watched closely. Some recent bids have been very aggressive, and it remains to be seen whether all of these capacities actually get built and commissioned at the tariffs quoted. Storage is a young and fast-scaling segment, and projects that stall because the numbers do not work would hurt confidence far more than slightly higher tariffs ever would. Disciplined bidding, realistic cost assumptions and strong execution will separate the projects that deliver from those that do not.
Going forward, I expect longer-duration systems, smarter software and domestic cell manufacturing to shape the industry’s next phase. To make these projects viable, VGF should continue until the market matures. Contracts need strong payment security and standardised terms, and storage should be allowed to earn from multiple services such as peak supply, grid balancing and ancillary markets.
At IndiGrid, we commissioned India’s first regulated utility-scale standalone BESS at Kilokari in Delhi (20 MW/40 MWh), and followed it with Gujarat BESS Private Limited (GBPL) in Gujarat (180 MW/360 MWh) – among the largest standalone BESS installations at a single location in the country. Both have shown how valuable storage can be for grid reliability.
How has been IndiGrid’s experience so far as an InvIT in the power sector? What are the key challenges and opportunities?
It has been a very rewarding journey. When we listed as India’s first InvIT in the power sector, the model itself was new to Indian investors. Nearly a decade later, IndiGrid has grown into a platform with assets under management of over Rs 34,000 crore (about $3.5 billion). Our portfolio today includes 59 transmission lines spanning about 10,237 ckt km, 20 substations with about 33,335 MVA of transformation capacity, around 1.5 GWp of solar generation and about 2.5 GWh of battery energy storage.
Since listing, we have distributed over Rs 8,000 crore – more than Rs 121 per unit – to our investors, while maintaining AAA ratings from all three major rating agencies. Our assets carry long residual contract lives across all three parts of the portfolio – transmission, solar and storage. We have also adopted world-class operations and maintenance practices, which not only deliver the highest performance standards – availability on our transmission lines, generation from our solar plants and round-trip efficiency from our batteries – but also extend the useful technical life of our assets.
The challenges are what you would expect for a growing asset class. Competition for good quality assets has increased, greenfield projects carry execution risks such as RoW delays, and we must stay disciplined on cost of capital and leverage.
Broader awareness of InvITs among retail investors is still building. One change that would make a real difference is classifying InvIT units as equity, as was done for real estate investment trusts this year – it would widen the pool of domestic capital that can flow into infrastructure.
The opportunities, however, are far bigger. India needs massive investment in transmission and storage, state utilities are looking to monetise assets, and long-term investors are actively seeking stable, yield-generating infrastructure. The InvIT structure sits right at the intersection of these needs.
What have been the key achievements of IndiGrid in the past one year or so?
The past couple of years have been defining ones for IndiGrid, and three things stand out for me.
The first is battery storage. We commissioned India’s first regulated utility-scale standalone BESS at Kilokari in Delhi in 2025, and in May 2026, we followed it with GBPL, a 180 MW/360 MWh project in Gujarat. Together, these projects showed the sector that utility-scale storage can be built, integrated and operated reliably in India. Today, IndiGrid has one of the largest operational and under-construction BESS portfolios in the country, at about 2.5 GWh, and we are increasingly seen as a thought leader in the segment – leading from the front on how storage projects are designed, contracted and run.
The second is EnerGrid, our platform with British International Investment and Norfund. At IndiGrid, we are constantly thinking about how to secure the next phase of growth for our investors. EnerGrid allows us to tap into greenfield transmission and storage opportunities in a fast growing sector, while IndiGrid acquires these assets once they are operational and generating revenue.
EnerGrid recently won two interstate transmission projects involving capex of around Rs 5,800 crore, giving us a clear and visible pipeline for the years ahead.
The third is the standing IndiGrid has built in the InvIT industry. Over the years, IndiGrid has come to be regarded as the benchmark for the sector – in governance, in operations and maintenance, in transparency with investors and in delivering consistent, growing distributions. We have maintained AAA ratings from all three major agencies, and many of the practices we pioneered are now seen as the standard for how a listed InvIT should be run.
And this year, IndiGrid also marks 10 years since its inception – a milestone that reflects the trust our investors, partners and people have placed in us.
What are the top priorities and key goals of IndiGrid for the next one to two years?
Our priorities are simple: grow responsibly, deliver consistently, and stay ahead of where the sector is heading.
First, we remain committed to our distribution guidance of Rs 16.48 per unit for FY 2027, and our medium-term aim is to grow distributions by 3-5 per cent every year.
Second, we will continue to expand our portfolio. We have an identified pipeline of over Rs 13,500 crore, and we expect to add Rs 10,000 crore-Rs 13,000 crore of assets from EnerGrid over the next two to four years, including around Rs 2,000 crore in FY 2027 itself. With net debt to AUM at 58.5 per cent, we have headroom of about Rs 10,000 crore-Rs 12,000 crore for acquisitions without needing to raise equity immediately.
Third is execution. Commissioning our under-construction transmission and storage projects on time and within budget is a key focus, as is maintaining high availability across our operating portfolio.
Fourth, we want to deepen our presence in battery storage and partner with states on monetising their transmission assets – two areas where we believe IndiGrid can add real value.
Underpinning all of this is financial discipline: maintaining our AAA ratings, a well-structured debt profile and a strong focus on governance. Our long-term ambition is to become the most admired grid platform in Asia, and the next two years are critical in that journey.