New Delhi: Union Minister for New and Renewable Energy Pralhad Joshi announced on Monday that officials have been tasked with assessing renewable energy projects lacking signed power sale agreements (PSAs) and power purchase agreements (PPAs). This evaluation will be conducted on a case-by-case basis, with findings expected within 45 days.
Earlier reports indicated that the power ministry has urged renewable energy implementation agencies to cancel projects for which PSAs and PPAs remain unsigned. On November 4, the Ministry of New and Renewable Energy clarified that any cancellations would be executed in a phased manner only after thoroughly exploring all viable options for establishing these agreements. Alarmingly, the ministry reported that nearly 43.94 GW of awarded renewable capacity is tied up in this limbo, posing a significant threat to India’s renewable energy ambitions.
Delays in finalizing these agreements risk hindering India’s goal of adding 50 GW of renewable capacity annually to achieve a target of 500 GW by 2030 and ultimately reach net-zero emissions by 2070. Power developers typically sign PPAs with procurers, while PSAs are established with power distribution companies (discoms). However, many discoms are choosing to hold off on signing PSAs, anticipating lower tariffs, which further complicates the process.
This situation raises concerns about India’s broader energy transition objectives, which call for achieving 1,800 GW of renewable energy capacity by 2047 and 5,000 GW by 2070. The slow progress in expanding transmission capacity has dampened interest in entering new green power contracts. In its recent statement, the Ministry of New and Renewable Energy acknowledged that the government is actively working with stakeholders to optimize transmission capabilities and refine the contracting framework.
To address some of these challenges, the ministry has amended standard bidding guidelines for solar, wind, hybrid, and firm dispatchable renewable energy (FDRE) projects, now allowing for the cancellation of letters of award that remain unexecuted for over 12 months from the issuance date. Amid concerns over the potential negative impact on investor confidence in India’s green energy sector, the state-run Solar Energy Corporation of India (SECI) has expressed grave concerns regarding Rajasthan Urja Vikas and IT Services Limited (RUVITL) for failing to uphold a power sale agreement.
The increasing backlog of renewable energy projects awaiting agreements has also led to a slowdown in bidding this fiscal year. According to a recent Icra report, after a robust allocation of 47.3 GW in FY24, followed by 40.6 GW in FY25, bidding activities have sharply declined, with only 5.8 GW awarded so far in FY26. Most of these stalled projects are standalone solar initiatives, prompting the REIAs to shift focus to bidding for renewable energy projects integrated with energy storage. From April 2024 to October 2025, REIAs and state discoms are expected to award standalone battery energy storage system projects totaling over 20 GWh. Notably, the share of round-the-clock, firm, dispatchable renewable energy, and solar plus storage projects has constituted 90% of the total renewable capacity awarded in the current fiscal year.
As India navigates these complex challenges in its renewable energy landscape, strategic actions and timely agreements will be essential to ensure the nation remains on track to meet its ambitious clean energy targets.
Original Source: https://www.livemint.com/news/india/assessment-stuck-re-projects-details-45-days-pralhad-joshi-power-ministry-projects-agreements-delays-contracts-11763998122788.html
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Publish Date: 2025-11-24 21:31:00
