In a significant move impacting India's clean energy transition, Union Minister for New and Renewable Energy Pralhad Joshi has issued directives for an immediate, case-by-case assessment of renewable energy projects where crucial Power Sale Agreements (PSAs) and Power Purchase Agreements (PPAs) remain unsigned. This evaluation, expected to yield detailed findings within 45 days, addresses a major bottleneck holding back nearly 44 gigawatts (GW) of awarded clean energy capacity.
The Scale of the Stalemate
The Ministry of New and Renewable Energy (MNRE) had earlier this month revealed a staggering 43.94 GW of awarded capacity is stuck due to the non-signing of these essential contracts. This logjam involves a critical chain: power developers sign PPAs with renewable energy implementation agencies (REIAs), which in turn sign PSAs with power distribution companies (discoms). The current impasse is largely attributed to many discoms holding out for potentially lower tariffs in the future, thereby stalling the entire process.
Compounding the issue is the slow progress in adding sufficient transmission capacity, which has further dampened interest in new green power contracts. The ministry has acknowledged this challenge and stated that the government, along with stakeholders, is actively working on mechanisms to optimize transmission and improve the contracting framework.
Implications for National Energy Goals
This prolonged delay throws a spanner in the works of India's ambitious renewable energy roadmap. The country aims to add 50 GW of renewable capacity annually to achieve its target of 500 GW by 2030. This is a critical stepping stone towards its broader goals of 1,800 GW by 2047 and the ultimate net-zero target by 2070. The current pile-up of stalled projects risks significantly slowing down this progress.
The uncertainty has already had a tangible impact on the market. Following a substantial award of 47.3 GW in FY24 and 40.6 GW in FY25, bidding activity has sharply declined in the current fiscal year (FY26), with only 5.8 GW awarded so far, as per an ICRA report. The REIAs have become cautious, slowing down new bids due to the existing backlog.
Government's Response and Shifting Focus
In response to the crisis, the MNRE has amended its standard bidding guidelines for solar, wind, hybrid, and firm and dispatchable renewable energy (FDRE). The amended guidelines now permit the cancellation of letters of award that remain unexecuted for more than 12 months from their issuance date. However, the ministry had previously clarified in a November 4 statement that any cancellation would be a phased process, undertaken only after all viable options for executing the agreements are fully exhausted.
Simultaneously, the focus of renewable energy auctions is shifting. With most stuck projects being standalone solar ventures, REIAs are now concentrating on bidding out projects integrated with energy storage capacity. Data shows that from April 2024 to October 2025, standalone battery energy storage system (BESS) projects aggregating over 20 GWh have been awarded. Furthermore, the share of complex projects like round-the-clock (RTC), FDRE, and solar-plus-storage has dominated the current fiscal's awards, constituting 90% of the total renewable capacity awarded so far.
The situation remains tense, as highlighted by a recent incident where the state-run Solar Energy Corporation of India (SECI) strongly objected to Rajasthan Urja Vikas and IT Services Limited (RUVITL) reneging on a PSA, underscoring the growing concerns about investor confidence in India's green energy trajectory.
