- India’s green power projects face growing uncertainty amid weak buyer interest and subsidy phase-outs.
- Transmission reforms and storage challenges could hinder the expansion of India’s green power projects.
India is considering cancelling a significant portion of its green power projects that have failed to find state utilities willing to purchase their electricity. The potential move could impact around one-fifth of the nation’s renewable energy capacity, posing a serious challenge to India’s goal of expanding clean energy.
The Ministry of Power has reviewed about 42 gigawatts (GW) of planned renewable projects that lack power purchase agreements. Authorities may suspend or cancel those deemed unviable, aiming to free up grid capacity. However, this could undermine India’s target of achieving 500 GW of renewable power by 2030.
Many state utilities, facing financial strain, are reluctant to buy renewable power due to its inconsistent output, especially without sufficient energy storage systems. The government has urged developers to pair renewable energy projects with energy storage systems, such as batteries, to ensure a more stable power supply.
At the same time, reforms are reducing transmission subsidies, making interstate electricity transfers more expensive. From June 2024, developers will pay 25% of transmission charges, with costs gradually increasing until full charges apply after June 2028, according to the Central Electricity Regulatory Commission (CERC).
Experts warn that while cancelling unviable projects could streamline grid operations, it may also discourage investment and slow India’s renewable energy transition. The government now faces the challenging task of balancing energy infrastructure efficiency, market reform, and climate goals.