ReNew Energy Faces Profit Pressure as India's Grid Struggles with Solar Power Integration
India’s grid bottleneck forces ReNew Energy to waste solar power, threatening profits
The Economic TimesImage: The Economic Times
ReNew Energy Global Plc is reducing solar power generation due to India's inadequate grid infrastructure, which fails to absorb excess renewable energy during peak hours. This curtailment, reaching up to 15%, threatens the company's profitability as demand rises amid an intense summer. ReNew plans to invest in battery storage to mitigate these issues.
- 01ReNew Energy is experiencing up to 15% curtailment of solar power due to grid limitations.
- 02The Indian grid's inability to handle peak solar generation is straining the power system.
- 03ReNew plans to invest in nearly four gigawatt-hours of battery storage this year.
- 04Rising shipping costs linked to the Iran conflict are impacting the company's operations.
- 05The company anticipates a shift towards more solar power in its future renewable portfolio.
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ReNew Energy Global Plc is facing significant challenges as India's grid infrastructure struggles to accommodate the growing supply of solar power during peak daytime hours. According to CEO Sumant Sinha, the company is seeing as much as 15% of its solar electricity curtailed on certain days, directly impacting profitability. The grid's delays in build-out have resulted in interruptions that force ReNew to reduce generation, particularly concerning as demand is expected to surge during the upcoming summer. Last year, up to 40% of solar power output faced curtailment on certain days due to grid constraints, as reported by the Grid Controller of India Ltd. In response, ReNew is accelerating investments in battery storage, aiming to install nearly four gigawatt-hours of capacity to store excess daytime electricity for later use. Additionally, the company is contending with rising shipping costs linked to the Iran conflict, which have affected the delivery of essential raw materials for solar panel production. Despite these challenges, Sinha believes the cost impact is manageable and temporary, while the company plans to focus more on solar energy due to declining wind speeds.
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The curtailment of solar power generation affects the overall renewable energy landscape in India, potentially leading to higher electricity costs for consumers if supply cannot meet demand.
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