Centre to temporarily slow down renewable energy tenders, cancel unviable projects as generation outpaces absorption capacity

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26 Aug, 2025 12:21

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For the first time ever, the government is planning to temporarily slowdown the pace of renewable energy (RE) tenders till the next fiscal, as India is generating more green power than its ability to absorb, Renewable Energy Secretary Santosh Kumar Sarangi informed Moneycontrol, a decision that some industry players say will help improve grid integration.

The government said it will reassess its aggressive renewable energy auction strategy at a time of mounting backlog of renewable power projects

The move marks a shift from the earlier mandate requiring four power sector Central Public Sector Enterprises (CPSEs) - NTPC, SJVN, NHPC and SECI - to issue 50 gigawatts (GW) of RE tenders annually to help achieve India’s 500 GW non-fossil fuel-based electricity generation capacity target by 2030. These four CPSEs are called renewable energy implementing agencies (REIAs).

Ministry of New and Renewable Energy (MNRE), Secretary, Santosh Kumar Sarangi told Moneycontrol that projects bid out under “vanilla” RE models — without any energy storage component and which have been stuck due to the lack of power purchase agreements (PPAs) will be cancelled.

He further added that India has currently reached a point where it is facing a demand-supply mismatch, implying the nation is offering more renewable energy than the ability to absorb such large volumes of green electricity. “From this year (FY26), we have reduced the number of RE tenders floated by the REIAs. Similar, pattern is likely to be followed in FY27 as well. At least it looks like it will be lower than the 50 GW per year that we decided previously,” Sarangi said.

Focus on Connecting Existing RE Projects

Santosh Kumar Sarangi said that there are at least 40 GW of RE projects that are stuck due to reasons such as lack of PPAs and absence of connectivity for evacuation of green power.

“Of these 40 GW, there are certain projects which have no scope of PPAs because they are based on plain vanilla RE projects, which is no longer in demand now. Such projects will be cancelled and probably re-bid with energy storage. I cannot say the quantum of such projects yet as the Ministry’s evaluation is still going on and shall be concluded in a week or two,” Sarangi said.

The Secretary, however, clarified that not all projects from the 40 GW-lot will be cancelled. “There are multiple projects that are stuck due to connectivity issues, which won’t be scrapped. For example, if I have set up an RE plant in Andhra Pradesh and the transmission network is scheduled to be ready only by 2028-29, discoms are not willing to wait for so long and hence, refuse to sign PSAs (power sale agreements) or PPAs. We are trying to resolve such issues,” he said.

Slowdown Won’t Derail 500 GW Green Power Target

When asked if the slowdown in new RE bids will delay India’s target of 500 GW non-fossil capacity by 2030, Sarangi said it could even be achieved ahead of schedule.

“…India remains in a comfortable position to achieve the 500 GW target within the stated time frame. We have a strong pipeline of RE projects totaling 160 GW. Besides, we already have achieved 50 percent non-fossil fuel capacity five years ahead of the 2030 target. At least 243 GW of our total installed capacity of 485 GW is non-fossil fuel based currently,” Secretary Santosh Kumar Sarangi said.

Industry Echoes Optimism

Industry stakeholders too hold a similar view. Tata Power CEO and MD Praveer Sinha told Moneycontrol that India’s renewable energy pipeline remains robust, and the temporary slowdown will in fact help improve project quality and ensure better grid integration.

“The focus on storage and hybrid projects will make future capacity more reliable and commercially viable. The sector has moved from just adding megawatts to delivering round-the-clock renewable power,” Sinha said.

Praveer Sinha said that Tata Power currently has 5.4 GW of renewable energy projects under implementation, which will be completed over the next two years. “…any new bid that we win will come only in the third year. This is, in fact, the current scenario for the entire renewable energy sector in India, which is why the government is reassessing its scale of tendering such projects,” Sinha said.