Follow India Renewable Energy News on WhatsApp for exclusive updates on clean energy news and insights

MNRE Clarifies: No Blanket Cancellation of REIA-Awarded Renewable Energy Projects; Case-by-Case Review Underway

The Ministry of New and Renewable Energy (MNRE) has confirmed that there will be no blanket cancellations of renewable energy projects awarded by Renewable Energy Implementing Agencies (REIAs) where Power Sale Agreements (PSAs) are yet to be executed. The ministry has assured developers that any potential cancellations will undergo thorough due diligence and be decided individually, based on feasibility and market readiness.

According to MNRE, the government is carefully reviewing cases in which Letters of Award (LoAs) have been issued but PSAs with DISCOMs or other procurers remain unsigned. Some distribution companies have shown hesitation in finalizing PSAs for projects with distant connectivity timelines, prompting the ministry to direct REIAs to assess each project’s potential to secure a PSA.

The ministry stated that this review would consider factors such as project configuration, tariff competitiveness, and connectivity schedules. Only LoAs with low or no likelihood of PSA execution may be considered for cancellation — and even then, only after all possible alternatives have been explored.

“No blanket cancellation of bids is being envisaged,” MNRE emphasized. “Cancellations, if necessary, will be phased and based on comprehensive due diligence.”

As of September 30, 2025, REIAs have issued LoAs for 43,942 MW of renewable capacity for which PSAs remain unsigned. However, since April 2023, PSAs covering 24,928 MW have already been finalized, reflecting continued progress in aligning projects with market demand.

The ministry also highlighted its ongoing efforts to strengthen the contracting and transmission framework. This includes evaluating new mechanisms for optimizing transmission capacity, streamlining PPA and PSA execution, and revisiting provisions like the green shoe option to ensure flexibility in project implementation.

Addressing concerns about stranded investments, MNRE clarified that major capital deployment typically occurs only after the signing of PPAs, and any preliminary investments — such as those in land or connectivity — can usually be redirected to other projects in a developer’s portfolio.

To facilitate PSA execution, the government has initiated several proactive measures:

• Urging states to comply with Renewable Consumption Obligations (RCO) under the Energy Conservation Act.
• Advising REIAs to aggregate demand from DISCOMs and large consumers before issuing tenders.
• Conducting regional workshops with renewable energy–procuring states to address challenges and expedite PSA signings.

Additionally, the Standard Bidding Guidelines for solar, wind, hybrid, and Firm & Dispatchable Renewable Energy (FDRE) have been amended to allow cancellation of LoAs remaining unexecuted beyond 12 months from issuance.

MNRE also noted a growing shift in market preference toward solar-plus-storage and dispatchable renewable energy solutions, which offer improved reliability and better economics compared to standalone solar or hybrid projects. This trend, driven by declining costs of storage, is reshaping the procurement landscape as distribution companies increasingly seek power available during peak demand hours.

To align with this evolution, REIAs are being encouraged to issue Solar + Storage, peak-hour, and FDRE-configured tenders to better match the needs of the modern grid.

In parallel, transmission expansion is being prioritized through an INR 2.4 lakh crore investment program aimed at integrating 500 GW of renewable capacity by 2030. Recent updates to the General Network Access (GNA) regulations will further unlock stranded capacity and enhance corridor utilization, improving grid reliability in renewable-rich states.

These collective efforts, MNRE affirmed, demonstrate the government’s commitment to ensuring stability, transparency, and continuity in India’s renewable energy transition — without disrupting investor confidence or project momentum.