With 73GW of renewable energy tenders in 2024, India exceeds its annual goal, but challenges like undersubscription, PSA delays, and project cancellations could impact future growth.
India’s ambitious journey towards a decarbonised economy is gaining significant traction, with two consecutive years of record-breaking renewable energy tender issuances.
A new report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics highlights that in 2024, the country issued tenders for an unprecedented 73 gigawatts (GW) of utility-scale renewable energy capacity—far exceeding the Ministry of New and Renewable Energy’s (MNRE) target of 50GW.
Surging Renewable Energy Tenders
The latest report reveals that India’s renewable energy tendering capacity grew sharply from 58GW in 2023 to 73GW in 2024. A significant portion of these tenders focused on advanced renewable technologies, including wind-solar hybrid systems and battery energy storage, reflecting growing demand for high-quality power solutions.
“The evolution of renewable energy tenders demonstrates that market stakeholders are actively working to overcome challenges,” said Vibhuti Garg, Director – South Asia, IEEFA. “The renewable energy market has matured significantly, with investors and energy offtakers gaining a deeper understanding of the intricacies of renewable energy technologies.”
Challenges Impacting Renewable Energy Growth
Despite the rapid growth, the report also highlights emerging challenges that could slow down investor momentum and project implementation. Key concerns include:
- Undersubscription of Tenders: Around 8.5GW of utility-scale renewable energy tenders in 2024 remained undersubscribed, a fivefold increase from 2023. Factors such as complex tender designs, aggressive reverse auction bidding, and delays in interstate transmission system (ISTS) readiness contributed to this issue.
- Delays in Power Sale Agreements (PSAs): The backlog of unsigned PSAs has surpassed 40GW, with Solar Energy Corporation of India (SECI)-led tenders accounting for 12GW.
- Tender Cancellations on the Rise: Between 2020 and 2024, 38.3GW of renewable energy projects were cancelled, amounting to 19% of the total issued capacity. Reasons include tender design issues, site challenges, undersubscription, and PSA delays.
“Delays in project implementation pose a significant challenge to India’s renewable energy target for 2030,” noted Ashita Srivastava, Senior Research Associate at JMK Research. These hurdles could deter investor confidence and impact the availability of low-cost financing for future projects.
Recommendations to Sustain Momentum
To maintain the momentum in India’s renewable energy expansion, the report suggests that authorities must focus on all stages of the tendering process, from request issuance to PSA allotment and execution.
“In addition to issuing tenders, the government should establish annual targets for both allotments and PSA execution. This will ensure that renewable energy implementing agencies (REIAs) issue bids only after securing the necessary offtake agreements,” said Deepalika Mehra, Research Associate at JMK Research.
India’s commitment to renewable energy remains strong, but addressing these structural challenges will be crucial for achieving its 2030 clean energy goals.