Underwriting Interconnection in a Constrained Grid

The constraint moved upstream

Generation cost stopped being the limiting factor in most of our markets some years ago. The limiting factor now is the wire. India is building to a plan that contemplates integrating roughly 537 GW of renewable capacity by 2030, with CTUIL's rolling plan projecting about INR 3.42 trillion of interstate transmission capital expenditure to FY30. Even at that pace, delivery has lagged connection demand — which is why in August 2026 CERC published a draft proposal extending transmission-charge waiver relief to renewable projects delayed by grid constraints, partially rolling back the ISTS waiver phase-out begun in July 2025.

What queue position actually tells you

A queue position is a claim on capacity at a named node, conditional on the upstream network being built and on prior positions either progressing or lapsing. We diligence the grant letter and its conditions, bay allocation, the associated transmission element and its awarded status, the bank guarantee and milestone regime, and the historical rate at which positions at that node have converted into energised connections.

• · A connectivity grant with unmet conditions is a conditional grant.
• · Node-level congestion history is more informative than system-level statistics.
• · Lapsing rules cut both ways — they can free capacity or forfeit yours.

Interconnection is a schedule risk, a revenue risk and a cost risk simultaneously.

Curtailment exposure

Curtailment is underwritten from three angles: the physical likelihood at the node, the contractual allocation in the PPA and connection agreement, and the compensation mechanism if it occurs. Where a project's economics depend on the assumption of negligible curtailment, we test that assumption against observed dispatch data rather than against the developer's expectation.

Transmission charges and policy reversal risk

Transmission charge treatment can move a project's economics materially, and the Indian experience since 2025 demonstrates that both the imposition and the relief can arrive by regulatory instrument within a single year. We model the charge regime as a live variable with an explicit sensitivity, not as a fixed input.

Contractual alignment

The commonest structural error we see is a PPA commissioning obligation that is not aligned with the connectivity date, exposing the developer to liquidated damages for a delay caused by the network owner. Alignment — or an express carve-out — is checked before any other commercial term is negotiated.

Where the opportunity sits

Constraint creates value for assets that relieve it: storage at congested nodes, firm and dispatchable portfolios, projects with secured connectivity in a market where connectivity is scarce, and transmission-adjacent infrastructure. A secured grid position is now one of the few genuinely scarce assets in renewable development.