Strong summary no blanket cancellations, focus on integration
Why the shift matters
India’s renewable sector has moved from rapid capacity additions to deeper systems integration. Installed clean capacity has surged over the last decade — from roughly 35 GW in 2014 to more than 197 GW today (excluding large hydro). That expansion highlights a new imperative: ensuring the grid, markets and contracts are aligned to absorb and dispatch variable renewables reliably.
What the government will do
REIAs have issued Letters of Award (LoAs) totalling about 43,942 MW for which PSAs remain unsigned. The government has asked REIAs to review and categorise such cases by the likelihood of securing end-procurement PSAs, considering discovered tariff, project configuration and expected connectivity timelines.
Only LoAs with minimal prospects for PSA execution may be considered for phased cancellation — and then only after every feasible option (contracting, demand aggregation, or alternate procurers) is exhausted. This calibrated stance aims to protect investor confidence while preserving grid security and procurer interests.
Transmission, storage and market reform are central
To unlock renewable corridors and relieve congestion, the government plans a ₹2.4 lakh crore transmission expansion aligned with ambitions for 500 GW of renewables. Recent GNA amendments will enable more dynamic corridor sharing and help optimise existing transmission assets.
At the same time, policymakers are nudging REIAs and procurers towards solar-plus-storage, firm & dispatchable renewable energy (FDRE), and peak-hour supply tenders. These configurations reduce dependence on plain solar, provide supply during high-demand windows, and are proving more attractive to DISCOMs and large buyers.
Measures to accelerate PSA signing
The government has urged states to meet Renewable Consumption Obligation (RCO) targets under the Energy Conservation Act and advised REIAs to aggregate demand from DISCOMs and commercial consumers before tendering. Regional workshops with major procuring states are underway to address practical barriers and fast-track PSA execution.
Standard Bidding Guidelines have been amended to allow cancellation of LoAs unexecuted beyond 12 months, giving REIAs clarity while ensuring a transparent contractual timeline.
Recent growth and investor confidence
Despite global headwinds, India added around 29 GW of renewable capacity in FY 2024–25, and roughly 25 GW in the first half of FY 2025–26. Investor interest remains robust, with the market showing a clear shift to integrated portfolios that include storage and dispatchable products.
Officials argue that fears about widespread cancellations undermining project pipelines are unfounded: major investments typically follow PSA/PPA execution, and any early developer investments in land or connectivity can be redeployed across portfolios.
Implications for developers, DISCOMs and buyers
The nuanced approach balances developer commitments, DISCOM prudence and grid readiness. Developers will need to align project designs with procurement preferences adopting storage, firming solutions and realistic connectivity timelines. Procurers will benefit from clearer tender signals and expanding transmission capacity, while the grid operator gains time to plan and implement reinforcements.
Outlook integration, not just capacity
India’s next phase in clean energy growth emphasises integration: stronger transmission corridors, storage deployment, demand aggregation and market reforms to ensure renewable energy is not only added but effectively utilised. The Ministry of New and Renewable Energy (MNRE) says it is committed to a transparent, future-ready approach that supports decarbonisation while maintaining investor confidence.
