A global surge in demand for high-voltage transformers, driven by efforts to integrate renewable energy into power grids, is emerging as a significant setback for project developers in India. Long wait times for crucial equipment, along with legal hurdles and land availability issues, are delaying addition of transmission infrastructure and stalling grid access for renewable energy projects in key states like Rajasthan and Gujarat. In a June meeting with top energy officials, developers warned that evacuation systems for most upcoming projects may not be ready until 2029. With only three domestic manufacturers of high-voltage direct current (HVDC) transformers—all owned by multinational conglomerates—surging global demand is straining supply, underscoring the need to strengthen supply chains and rethink how developers place orders. Adopting programme-based ordering, a strategy gaining traction in Europe, could provide manufacturers with better visibility and help manage demand more effectively. Government-owned Power Grid Corporation of India Ltd (PGCIL), the country's largest transmission infrastructure developer, is further constrained by a mandate to source transformers domestically from suppliers that ensure at least 60 percent local value addition. Transmission-related delays in bringing projects online could derail the government's target of adding over 50 gigawatts (GW) annually through 2030 to meet its 500 GW green energy goal. The Ministry of Power and the Ministry of New and Renewable Energy did not respond to requests for comment. Equipment supply constraints Across the world, including in India, booming demand for HVDC transmission equipment–used to efficiently evacuate green power over long distances–is causing supply constraints, which in turn could lead to project delays. Earlier, one HVDC project was executed every 4-5 years in India, whereas now the frequency has increased to one project each year. According to energy analytics firm Wood Mackenzie, transformer lead times have been on the rise in the last few years, from around 50 weeks in 2021 to 120 weeks on average in 2024. “. based on conversations with developers and suppliers, we predict that as much as 25% of global renewable projects could be at risk of project delays due to high transformer lead times,” it noted in an April report. “I think we all are aware of the challenges of grid connectivity and evacuation,” CEO of Adani Green Energy Ltd Amit Singh said at the BNEF Summit in New Delhi earlier this month. Singh added that disruptions in the supply chain of inverters and transformers are testing developers’ ability to execute projects on time and accelerate the deployment of renewable energy. “We are looking to domestically source these goods… It's very well known in the industry that we still don't have a very resilient supply chain. I think the wait time of inverters and transformers is very high, and there's a huge opportunity to make investments in that space and solve for it,” Singh said. RK Tyagi, PGCIL’s CMD, called the supply of gas insulated switchgears (GIS), transformers, and reactors a “big challenge” in an earnings call on August 2. PGCIL is further constrained by the government’s Public Procurement (Preference to Make in India) Order requiring government-owned companies to source equipment, like HVDC transformers, from local suppliers–namely Siemens Ltd, Hitachi Energy India Ltd, and GE T&D India Ltd–as opposed to importing from other countries. Rethinking ordering strategy N Venu, MD and CEO of Hitachi Energy India told The Indian Express that the company has created a “very robust supply chain” in order to meet both domestic and export demand. According to him, challenges around sourcing HVDC equipment primarily stem from how developers plan the placement of orders. “I do not see that there is a constraint on the supply of equipment in India as of now. The challenge is better planning and sometimes our factories are having empty slots and sometimes suddenly [demand] comes. We will not be able to do that. No company or no industry can cater to that. What we need is a balanced loading of the factories,” Venu said. As a solution, Venu suggested moving to a programme-based ordering strategy as opposed to project-based ordering. “In other countries, especially in Europe, everyone is moving from project-based ordering to programme-based ordering. For example, take an HVDC or a large transformer, they will order 100 transformers for the next four or three years. With that, the manufacturer can cater to those kinds of demand and if they need to make any incremental expansions in the capacities, that can also be done,” he said. While a complete shift towards programme-based ordering can take some time, transmission companies, including PGCIL, are now placing transformer orders well in advance—sometimes even before securing the bid, as in the case of Adani Energy Solutions Ltd, a major private player in the sector. High export orders As demand for transmission infrastructure surges in developed countries, Indian HVDC manufacturers are also trying to capture some of the global market. In response to a question on whether Siemens’ India capacities will supply equipment to developed economies currently facing shortages, CEO and MD Sunil Mathur responded affirmatively in an earnings call in May. While Mathur acknowledged that the domestic market is also growing, he said bidding decisions are made in consultation with the parent company. “But we also need to acknowledge (that) the HVDC market globally is booming. And therefore, we have got to look at it and along with the parent company, Siemens Energy AG, on whom we are dependent for technology, and for some products as well, we've got to work together with them to see where the priority lies in terms of the bidding process,” Mathur said. At Hitachi Energy too, exports account for a large volume of total order book. “Exports contributed 27% to the total order book, not including the large HVDC export order we received from Marinus, because that's a large order. If we include that, the whole thing will be skewed, so we always keep out such large projects, while considering the export contribution to the total order,” Venu said in an earnings call in July. Marinus Link is an HVDC project underway in Australia. PGCIL, Siemens, and GE T&D India did not respond to requests for comment. Delays in grid availability In a June meeting with top officials from the power ministry and the new and renewable energy ministry, solar and wind developers said that “projects in Rajasthan and Gujarat are facing challenges in timely availability of ISTS (inter state transmission system),” according to a document accessed by The Indian Express under the RTI Act. “Most of the upcoming projects, especially in Rajasthan, will not have evacuation systems available till 2029. Considering the imposition of ISTS charges and long waiting period, REIAs (renewable energy implementing agency) may find it difficult to sign PSAs (power supply agreements),” developers told the government. The 100 per cent waiver of ISTS charges will be phased out from June 2025 onwards. In addition to challenges in sourcing transmission equipment, grid infrastructure projects have also been delayed because of other issues, including the Supreme Court ban on high power transmission lines in the habitat of the Great Indian Bustard (GIB), found in Gujarat and Rajasthan. The ban was relaxed in March earlier this year. “Only 6 projects (total value: Rs. 6,500 crore) face delays due to the Supreme Court judgement on transmission lines in Great Indian Bustard (GIB) areas. With the issue resolved, these projects are on track for completion by year-end,” a power ministry press release issued in July said. Transmission projects in India often encounter delays due to land acquisition challenges that arise during construction. Over the last year, significant HVDC project bidding was also delayed, partially because of the Lok Sabha elections held in April and May.
