With the rapid increase in renewable energy capacity in India, merely generating electricity is no longer sufficient. The real challenge is to deliver this electricity from production areas to demand areas, handle fluctuations in the grid and make stored electricity available when needed.
Keeping this need in mind, the government has approved the PM-DHARA scheme, which focuses on developing transmission infrastructure and battery storage together.
Let us understand the PM-DHARA scheme in detail and know what changes it can bring for India’s renewable energy infrastructure and the related sectors.
What’s Happening?
The Union Cabinet has approved the PM-Developing Harmonised and Accelerated Renewable-energy Access, or PM-DHARA, scheme. Its total project outlay is Rs 1,86,405 crore and the target is to implement it by FY2032-33. Through the scheme, while strengthening the intra-state transmission system in states and union territories, an arrangement will be prepared to evacuate up to 135 GW of renewable energy to the grid.
Of the total amount, Rs 1,36,378 crore has been kept for intra-state transmission infrastructure under Green Energy Corridor Phase-III, while Rs 50,000 crore will be used to develop 50 GWh of Battery Energy Storage Systems, or BESS. Under this infrastructure, there is a plan to add 51,126 circuit kilometres of transmission lines and 2,28,903 MVA of transformation capacity.
Why Is the Need for Transmission and Storage Increasing?
The biggest challenge of solar and wind power is their irregular availability. Solar electricity is generated during the day, while wind generation keeps changing with weather and time. Therefore, merely adding new renewable capacity is not sufficient; it is also necessary to strengthen the grid to handle this changing production.
This challenge has now started becoming clearly visible. According to the Ember report of May 2026, India lost around 300 GWh of renewable energy in the first quarter of 2026 due to transmission constraints. The major reason for this was that the expansion of renewable capacity remained faster compared to transmission infrastructure.
Here 50 GWh of BESS can play an important role. It will help in balancing renewable intermittency, transmission congestion, peak-hour curtailment and demand during non-solar hours by storing surplus electricity. In renewable-rich states such as Rajasthan and Gujarat, with rising generation, the need for strong transmission and storage infrastructure is also increasing rapidly.
Funding and Implementation Model
Under the scheme, a total central financial support of Rs 54,082 crore has been allocated. Of this, Rs 45,005 crore is for intra-state transmission systems, Rs 6,000 crore as viability gap funding for BESS, Rs 3,050 crore for committed liabilities of previous Green Energy Corridor phases and Rs 27 crore for programme management and grid studies. The objective of this assistance is to help control the cost of electricity by reducing the impact of transmission charges.
Greenfield transmission projects will be awarded through tariff-based competitive bidding and transmission service providers will operate them on the Build-Own-Operate-Maintain model. For upgrade and strengthening of the existing network, the cost-plus model will be adopted. State transmission utilities will be its main implementing agencies.
PM Gati Shakti, project monitoring units and challenge mode will also be used, in which states with better policy preparedness, land compensation and necessary clearances may get priority.
What Does This Mean for Investors?
The impact of PM-DHARA is not limited only to the construction of transmission lines. According to the government, the scheme can leverage transmission infrastructure investment of approximately Rs 1.32 lakh crore. Along with this, an investment of around Rs 4.6 lakh crore is estimated in the related 135 GW renewable energy projects.
This creates the possibility of increased activity in areas such as transmission infrastructure, BESS manufacturing and deployment, power equipment, construction, and operation and maintenance. According to DD News, the scheme can also generate direct and indirect employment in power, manufacturing and construction along with long-term skilled employment in grid management.
This is not an investment signal for any one company or asset, but it shows that with the expansion of renewable energy, the economic importance of supporting grid and storage infrastructure is also increasing.
What’s Next?
PM-DHARA is linked to India’s large non-fossil energy ambitions. The government has a target of 500 GW non-fossil fuel installed capacity by 2030, while the current capacity is 270 GW.
Along with this, PM-DHARA has also been prepared with the objective of supporting the target of 900 GW installed non-fossil capacity by 2035. In such a situation, the future challenge will not only be of installing new solar and wind capacity, but of developing transmission, storage and grid flexibility at the same pace along with it.
Disclaimer: This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The companies mentioned are cited as examples within the context of market developments. Investors are advised to conduct their own due diligence and consult their financial advisor before making any investment decisions.
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