The union government has said that it will not undertake any blanket cancellation of renewable energy projects awarded through the Renewable Energy Implementing Agencies (REIA), even in cases where Power Sale Agreements (PSA) with distribution companies remain unsigned. Instead, the Ministry of New and Renewable Energy (MNRE) has directed a structured, case-by-case due diligence process to ensure that project execution aligns with grid readiness, transmission availability and procurement timelines.
According to official data, as on September 30, 2025, REIAs have issued Letters of Award (LoA) for 43,942 MW of renewable capacity for which PSAs with end procurers are yet to be finalised. Several distribution companies have expressed reservations about signing PSAs linked to projects whose grid connectivity dates lie significantly in the future.
In response, MNRE has instructed REIAs to categorise these cases based on the probability of securing firm procurement commitments. The assessment will consider the renewable configuration offered under the bid, the tariff discovered during the tender, and the expected timelines for grid connectivity.
The ministry has emphasised that only those LoAs with negligible prospects of PSA execution may be considered for cancellation, and even these would be phased and undertaken only after all feasible options have been exhausted. The government has also rejected concerns that any such cancellations would place large renewable investments at risk, noting that major expenditure typically begins only after the signing of a Power Purchase Agreement (PPA). Early investments in land or connectivity can usually be repurposed for other ongoing or future projects.
To expedite PSA execution, the Government has urged states to comply with the Renewable Consumption Obligation (RCO) mandated under the Energy Conservation Act. REIAs have been advised to aggregate demand from distribution companies before issuing new tenders, and regional consultations have been held with major procuring States. Further, the Standard Bidding Guidelines (SBG) for solar, wind, hybrid and Firm and Dispatchable Renewable Energy (FDRE) projects have been amended to permit cancellation of LoAs pending beyond 12 months.
The policy shift is accompanied by a push towards tenders for solar-plusstorage, peak-hour renewable supply, and dispatchable clean power, in line with changing market preferences. Transmission expansion of ₹2.4 lakh crore and reforms to the General Network Access (GNA) framework are expected to ease corridor congestion and facilitate renewable integration.
India added 29 GW of renewable energy capacity in the previous financial year and 25 GW in the first half of the current financial year, signalling robust investor confidence. MNRE said the sector is now entering a phase defined by grid discipline, storage-backed reliability and longterm system stability.
