Over 43.9 GW of awarded renewable capacity lacks PSAs due to weak demand aggregation and shifting procurement timelines
MNRE says it will assess each unsigned LOA individually, avoiding blanket cancellations and exploring all PSA and PPA execution options first
The government also plans to update bidding rules, pushing hybrid and storage tenders, and strengthening transmission to reduce congestion
Indian Renewable Energy Implementing Agencies (REIA) have signed power sale agreements (PSAs) for more than 24.9 GW since April 2023. However, despite having issued Letters of Award (LOAs) for over 43.9 GW of renewable energy capacity as of September 30, 2025, there are still no buyers for this portion as PSAs for this capacity remain unsigned, according to the Ministry of New and Renewable Energy (MNRE).
The ministry says that this reflects the scale of recent bidding activity, indicating continued progress in contract execution and market alignment. It also sheds light on the evolving nature of demand aggregation and procurement timelines.
According to market intelligence firm JMK Research & Analytics, between April 2023 and June 2025, nearly 11.4 GW of renewable energy tenders were cancelled due to undersubscription, high tariffs, or procures backing out. The number has now risen to over 43 GW. The situation is creating uncertainty around the actual realizable pipeline.
JMK analysts assert that the backlog is primarily the result of tendering volumes expanding faster than actual demand and transmission readiness. Developers also resorted to hoarding Inter-State Transmission System (ISTS) connectivity without meaningful project progress.
“These issues are further exacerbated by structural and procedural bottlenecks such as Right of Way (RoW) disputes, slow land acquisition, equipment procurement restrictions, and multi-agency approval requirements,” it adds.
The ministry assures that there is no fear of stranded investments, as major capital investment begins only after the signing of the PPA. As of now, MNRE says it does not plan on blanket cancellations, but the REIAs will carry out due diligence and review all unsigned LOAs.
“Following this review, only those LoAs with minimal or no prospects of PSA execution may be considered for cancellation on a case-to-case basis. Even then, such cancellations are expected to be phased and undertaken only after all feasible and viable options for executing the Power Sale Agreements (PSAs) and corresponding Power Purchase Agreement (PPAs) have been thoroughly explored,” stated the ministry.
At its end, MNRE says it is taking proactive measures, including urging states to comply with Renewable Consumption Obligation (RCO) and advising REIAs to aggregate demand from DISCOMs and other consumers before issuing tenders. It has also amended Standard Bidding Guidelines for solar, wind, hybrid, and Firm and Dispatchable Renewable Energy (FDRE) to allow for cancellation of LOAs that remain unexecuted beyond 12 months from the date of issuance.
Amid ‘reduced demand for plain solar power’, the government is also nudging REIAs to move from tendering vanilla solar projects to include hybrid arrangements, especially solar and storage configurations.
The ministry says it is also looking into scaling up transmission infrastructure to unlock stranded capacity, ease congestion, and improve grid access.
Nevertheless, JMK analysts believe that if the cancellations do materialize, their effects will cascade across the renewable energy ecosystem, right from developers, equipment manufacturers, financiers, investors, transmission agencies, and even the REIAs and the government itself.
To prevent such a situation from repeating in future tender cycles, analysts recommend a demand-driven approach to tenders, based on confirmed aggregation from DISCOMs and large consumers to ensure predictable offtake. Coordinated planning across renewable energy, storage, and transmission infrastructure will also need to be factored in to avoid stranded capacities.
Recently, Mercom India Research noted that as of September 2025, India had 191.9 GW of large-scale solar project pipeline and another 162.5 GW tendered and pending auctions (see India’s Solar PV Installations Hit Record 26.6 GW In 9M 2025).