Government to Decide on Cancellation of Stuck Renewable Energy Projects Within 45 Days

Union Minister for New and Renewable Energy, Pralhad Joshi, announced on Monday that the government will take a final decision on renewable energy projects that need to be cancelled within the next 45 days. 

An ongoing assessment is being conducted on projects where progress has stalled, particularly those lacking signed Power Sale Agreements (PSAs) or Power Purchase Agreements (PPAs). 

Speaking to reporters, Joshi said, “I have told my officers, after a recent meeting with Ministry of Power, to assess renewable energy projects on case-to-case basis. In about 1.5 months all details will be ready after which we will let you know.”

Moderating Tender Pace to Ease Overcapacity

Joshi emphasized that temporarily slowing down the pace of renewable energy tenders could help address the overcapacity issue in India’s solar module manufacturing sector. 

By moderating demand growth, manufacturers would have time to align production with actual market needs, which would improve price stability and industry health. 

The minister pointed out that there are over 40 GW of renewable energy projects with issued Letters of Award but without signed PSAs or PPAs, creating a bottleneck in the sector.

He also indicated that the market dynamics are evolving, and added, “Developers also need to understand that we are no longer in the age where plain vanilla solar projects would work because cost of renewable energy with battery energy storage is also becoming increasingly attractive at about INR 3.5 per unit. So, that will also be considered in the assessment.” 

This highlights the growing importance of battery energy storage systems (BESS) in new project assessments.

Progress on Green Energy Corridor Phase 3

Joshi also provided an update on the government’s work toward the third phase of the Green Energy Corridor (GEC), which facilitates the evacuation and grid integration of renewable energy. “We are in talks with states and a final decision on which states will be covered for RE evacuation in phase 3 is yet to be decided,” he said. 

The earlier phases of GEC have already developed substantial transmission infrastructure. Phase 1 included states like Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, and Tamil Nadu, constructing around 9,700 circuit-km of transmission lines and 22,600 MVA of substations to evacuate nearly 24 GW of renewable energy.

Phase 2 extended the network across Gujarat, Himachal Pradesh, Karnataka, Kerala, Rajasthan, Tamil Nadu, and Uttar Pradesh, adding approximately 10,750 circuit-km of lines and 27,500 MVA of substations to integrate about 20 GW of new renewable capacity.