The Indian government plans to cancel 6 to 7 gigawatts of renewable energy tenders that are not financially viable. This decision aims to better match future bids with the actual demand and load profiles of states, according to New and Renewable Energy Secretary Santosh Sarangi in an interview with Moneycontrol.
The issue stems from 42 GW of stranded renewable energy capacity, which is currently stalled due to a lack of power purchase agreements and insufficient transmission infrastructure. Sarangi noted that 6 to 7 GW of this capacity is beyond recovery. He commented, “The prices discovered in these bids were very high, and we expect that for those prices, you will not find buyers.” The cancellations, which have been announced in phases since November, follow a review by Renewable Energy Implementing Agencies to assess which projects are still viable. Tenders that do not pass this evaluation will be canceled systematically. Sarangi attributed the problem to a basic flaw in earlier tender designs. These tenders were created without considering what states actually needed. “We ended up with a lot of vanilla solar and vanilla wind capacities, which were not required by the states,” he said.
The Solar Energy Corporation of India is now shifting to load-profile-matched bidding. This new approach incorporates storage and round-the-clock renewable energy components to improve price discovery and actual offtake. On the policy side, the government has updated bidding guidelines for solar, wind, hybrid, and Firm and Dispatchable Renewable Energy. These updates now allow the cancellation of unexecuted letters of award after 12 months. States are also being encouraged to meet Renewable Consumption Obligations under the Energy Conservation Act. Despite these adjustments, Sarangi remains optimistic that India will add 50 GW of renewable energy capacity by the end of the fiscal year, building on the 266.7 GW that was installed as of February.