On July 13, at 12:29 hours (as reported in businessline dated July 20, 2026), 42.79 per cent of the electricity flowing to the India grid came from wind and solar — a record. Data from the Grid Controller of India Ltd shows that the share of variable renewable energy (VRE) in total electricity has consistently stayed above 35 per cent at some point during the day on all days.

The grid is managing this much VRE in its veins. But VRE’s share is only going to increase, gradually overwhelming the grid.

VRE is growing faster than the infrastructure needed to handle it.

Broadly there are two categories of measures needed to handle a high share of VRE — grid operations and market instruments (software); and addition of transmission lines and the use of more hi-tech equipment (hardware).

The hardware part presents a big business opportunity. Ask CosPower Engineering, which manufactures electrical equipment such as capacitors, damping resistors and harmonic filters, which aid grid stability. The Mumbai-based company’s turnover in 2024-25 was ₹27 crore; the following year it rose to ₹107 crore, according to Oswald D’Souza, Whole-time Director and co-founder.

“India requires a grid capable of reliably transmitting, balancing, and managing this power,” says N Venu, MD and CEO-India and APAC, Hitachi Energy. “Transmission capacity, system strength, storage, and advanced power electronics will all play essential roles as the share of renewable electricity grows,” Venu said.

Now, with the Central Electricity Authority proposing tougher rules for solar, wind and batteries connected to the grid, the need for gizmos such as grid-forming inverters is expected to rise sharply.

The draft Central Electricity Authority (Technical Standards for Connectivity to the Grid) Regulations, 2026, published on July 31, proposes to replace the existing regulations dated 2007. The CEA has invited public comments until September 2. A major change proposed is the detailed technical requirements for solar, wind and battery energy storage systems, which are classified as inverter-based resources.

Renewable plants above 10 MW and connected at 33 kV or higher would have to adjust their power output on the grid operator’s instructions, change their output by up to 10 per cent a minute, and quickly respond to changes in grid frequency.

Renewable plants will also have to provide much stronger voltage support and fault ride-through capabilities. They would have to remain connected during certain grid disturbances and provide reactive current within 30 milliseconds in certain low-voltage conditions. Such requirements could drive the demand for more sophisticated inverters, plant controllers, protection systems and other grid-support equipment.

Grid-forming technology

The biggest opportunity could be for grid-forming technology. Today’s conventional inverters are ‘grid-following’: they take the reference voltage and frequency from the grid and feed VRE to the grid at those values. In contrast, grid-forming converters establish their own internal voltage reference, and can provide near instantaneous voltage and frequency support.

“Grid-forming technology is an important part of our portfolio,” said Venu. Hitachi Energy senses a big business opportunity for its product Grid-enSure, which incorporates grid-forming capabilities.

Battery energy storage systems (BESS) are potential beneficiaries too. BESS installations of 50 MW and above would be needed for black-start capability, helping restore the grid following a major blackout. This could require additional control, power electronic and auxiliary equipment beyond what is needed to merely store and discharge electricity.

The proposed regulations, therefore, represent more than a tightening of grid connection standards. By specifying the capabilities that renewable and storage projects must provide, they could create a growing market for smarter inverters, grid-forming converters, advanced plant controllers, protection and power quality equipment, and grid-support systems.

For equipment manufacturers, the significance lies in the fact that these capabilities could move from being premium features adopted by a few projects to mandatory specifications for a much larger part of India’s renewable energy build-out.

‘Software’ measures

Handling the grid with high VRE also calls for ‘software’ measures such as forecasting and demand response — which, in turn, provide more manufacturing opportunities. Improved forecasting of solar and wind generation will become increasingly important for scheduling power, managing deviations and planning balancing resources. This will create opportunities for forecasting platforms, energy management systems and sophisticated control software.

Such software will also need sensors, weather stations, communication equipment, data acquisition systems and other devices that provide the operating data for the software.

The same hardware-software combination will be needed on the consumer side.

Time-of-day tariffs, for instance, depend on smart meters capable of recording when electricity is consumed and communicating this data to utilities.

As the electricity market becomes more dynamic, the spread of smart meters, automated controls and other connected devices could spawn an important equipment market in its own right. Alongside this will grow a market for balancing and ancillary services, storage and other flexibility services, creating revenue streams for generators, battery operators and specialised service providers.

While managing the grid with high VRE is a grid operator’s nightmare, it is a box of sweets for equipment manufacturers.

Published on August 17, 2026