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Govt Moves to Unlock 10–12 GW of Stranded Renewable Capacity Amid Buyer Shortage

A significant portion of nearly 43 GW renewable energy capacity, which has remained unsold due to relatively high tariff discoveries in recent tenders, may soon find buyers. According to a senior official from the Ministry of New and Renewable Energy, efforts are underway to finalize power sale agreements (PSAs) for around 10–12 GW of this capacity within the next few months.

To facilitate deal closures, the government, along with Solar Energy Corporation of India, is exploring revisions in pricing structures and contract terms. The aim is to make projects more attractive to distribution companies (discoms) while maintaining their financial viability for developers.

As of September 30, 2025, renewable energy implementing agencies had already issued Letters of Award (LoAs) for approximately 43,942 MW of capacity that is yet to secure PSAs with end buyers. With an estimated investment of Rs4–5 crore per MW, the total capital tied up in these projects exceeds Rs2 lakh crore, highlighting the scale of the challenge.

The primary bottleneck has been the lack of buyer interest at previously discovered tariffs, slowing down execution despite strong capacity additions. By revisiting commercial terms and aligning with broader policy measures such as grid integration and energy storage expansion, the government aims to accelerate absorption of this capacity.

Officials indicated that around 42 GW of projects are currently awaiting PSA finalization, with expectations that a portion—about 10–12 GW—will secure agreements in the near term, helping clear the backlog and drive momentum in the renewable energy sector.