India’s renewable energy sector is facing institutional challenges that need flexible solutions. Propelled by falling solar module prices and government policy, solar capacity has expanded to 162 GW by June 2026. Yet at the very moment this transformation demands smarter, more flexible market products, India’s regulator is moving the opposite way, proposing to hand control of the power exchanges to Grid-India, a government utility whose institutional DNA is built for managing transmission systems, not commercial decisions.

Between May and December last year, over two billion units of solar electricity, enough to power several million homes, were curtailed because the grid could not absorb them. The solution requires transmission investment to convey electricity, flexible power plants that can ramp quickly, battery storage to absorb excess generation and discharge during lean hours, and above all, well-designed electricity markets that send the right price signals to the right players at the right time.

Surplus generation in one region can be traded to regions facing shortage. A robust, functional electricity market, one with products that sellers and buyers want,........

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