India’s Renewable Energy Sector Struggles with Weak Demand and Project Cancellations

India’s renewable energy sector is currently facing serious challenges in the form of poor tender demand, project cancellations and postponement of power purchase agreements, a report stated by Institute for Energy Economics and Financial Analysis (IEEFA). Even after releasing a record 73 gigawatts of utility scale renewable energy tenders in 2024 which is approximately 8.5 GW were undersubscribed five times more than in 2023. This is due to complicated tender design structures and procrastination in interstate transmission readiness.

In addition, the nation’s cumulative unsigned power sale agreements (PSA) capacity has exceeded 40 GW with Solar Energy Corporation of India tenders alone accounting for 12 GW. During 2020-2024, 38.3 GW of renewable energy capacity was cancelled owing to reasons like design flaws in tenders, location issues, technical issues, under subscription and delay in signing power agreements.