Power Grid, Adani Energy, Exide Industries: What the ₹1.86 lakh crore PM-DHARA scheme means for stocks

Shares of power and allied companies such as Power Grid Corporation of India, Adani Energy Solutions, GE Vernova T&D India, Hitachi Energy India, and CG Power and Industrial Solutions are expected to remain in focus on Thursday, October 1.

The spotlight comes after the Union Cabinet on Wednesday approved the ₹1.86 lakh crore PM-DHARA Scheme. The scheme aims to strengthen the intra-state transmission system and deploy 50 GWh of battery storage to help evacuate 135 GW of renewable energy.

The PM-DHARA stands for PM-Developing Harmonized and Accelerated Renewable-energy Access. The scheme is significant in view of India's ambitious target of 500 GW of renewable energy capacity by 2030.

According to an official statement, the Union Cabinet chaired by Prime Minister Narendra Modi has approved the PM-DHARA Scheme.

Key details

The PM-DHARA scheme is essentially a major push to strengthen India’s power transmission network so that more renewable energy can be generated and moved to where it is needed. The ₹1.86 lakh crore scheme will support the expansion and upgrade of intra-state transmission infrastructure, helping states evacuate up to 135 GW of renewable power.

A key part of the scheme is the allocation of ₹50,000 crore for 50 GWh of Battery Energy Storage Systems (BESS). This is important because solar and wind power are intermittent — electricity generation can fluctuate depending on sunlight and wind conditions. Battery storage can help store surplus power and supply it when renewable generation is lower, making the grid more flexible and reliable.

For the power sector, the scheme could translate into higher demand for transmission equipment, grid infrastructure, transformers, substations, and energy-storage systems over the coming years.

It is also expected to support the broader expansion of renewable energy capacity by improving the ability of the grid to absorb and transmit green power.

For investors, the key focus will be on companies involved in transmission, power equipment and battery storage, although the actual benefit to individual companies will depend on project awards and their participation in the scheme.

What the government said

The initiative will strengthen India’s Intra-State Transmission System (InSTS) to enable evacuation of up to 135 GW of renewable energy across States/Union Territories.

The scheme will also facilitate the deployment of 50 GWh of Battery Energy Storage Systems (BESS) at the renewable energy developer/generator end or any other location of importance for grid flexibility. The storage systems are intended to address intermittency, congestion, peak-hour curtailment, and non-solar hour demand.

The scheme is targeted to be set up by FY 2032-33, with a total project outlay of ₹1,86,405 crore. This comprises ₹1,36,378 crore for the development of Intra-State Transmission Systems (InSTS) under GEC-III and ₹50,000 crore for 50 GWh of BESS. The scheme involves total Central Financial Support of ₹54,082 crore.

The Central Financial Assistance (CFA) will help offset intra-state transmission charges and thus keep power costs down.

Thus, the government support is also aimed at benefiting end users through lower power costs.

Stocks in focus

Other key points to know

• All greenfield projects under the InSTS component will be implemented through the Tariff Based Competitive Bidding (TBCB) mode. Brownfield upgrades and network-strengthening works will be carried out under the Cost Plus Basis (CPB).

• The State Transmission Utilities will serve as the overall implementing agencies, while Transmission Service Providers (TSPs) will participate in the TBCB process under the Build-Own-Operate-Maintain (BOOM) model.

• The scheme will support the country’s target of achieving 900 GW of installed non-fossil capacity by 2035.

• It is also expected to contribute to India’s long-term energy security and promote ecologically sustainable growth by helping reduce the country’s carbon footprint.

• The scheme is expected to generate significant direct and indirect employment across the power, manufacturing and construction sectors.

• The manufacturing and deployment of Battery Energy Storage Systems (BESS) will additionally create employment opportunities in the domestic energy-storage industry.

• The scheme is also expected to create long-term skilled employment opportunities in operations, maintenance and grid management across participating States.