India’s power transmission sector is poised for significant growth, with Goldman Sachs estimating a capital expenditure requirement exceeding $500 billion by fiscal year 2050.
This projection represents approximately 30% of the total capital outlay for India’s energy transition, underscoring the critical role of power transmission infrastructure in facilitating the country’s transition towards renewable energy sources According to Goldman Sachs’ report, India’s robust and integrated grid infrastructure presents opportunities for the utilisation of cost-effective renewable energy generation sites. By maintaining free access to the central grid for renewable energy projects, the Indian government indirectly supports the viability of such initiatives, with an estimated financial assistance worth $270 billion. The Power Grid Corporation of India (PGCIL) emerges as a key beneficiary in Goldman Sachs’ total addressable market (TAM) estimate, accounting for one-third of India’s energy transition TAM between fiscal years 2024 and 2050. With its strong balance sheet, low cost of debt, and robust cash generation, PGCIL is well-positioned to capture a significant portion of the projected capital expenditure. Goldman Sachs highlights PGCIL’s advantage in executing large-scale, multi-region projects, thanks to its eligibility for direct nomination. The report suggests that PGCIL alone could fund 30% of India’s planned grid capital expenditure by fiscal year 2032 while maintaining its current dividend pay-out.
Additionally, Goldman Sachs identifies Hitachi Energy India as a prominent player in India’s energy transition, particularly in high-voltage equipment manufacturing. With a substantial portion of its equipment portfolio manufactured domestically, Hitachi Energy India stands to benefit from India’s grid expansion plans, with a potential TAM size of up to $50 billion. Furthermore, the report anticipates significant capital expenditure in distribution system expansion and strengthening, driven by the revamped distribution system scheme. Schneider Electric Infra is expected to play a significant role in this segment, with involvement in over 50% of the total sanctioned capex projects. Overall, India’s power transmission sector presents lucrative opportunities for both domestic and international players, supported by the country’s ambitious energy transition goals and substantial capital expenditure plans.
