Archive · 11 Nov 2025
Uncontracted Renewable Energy Capacity Faces Cancellation Risk, Solutions Explored
Lots of new solar and wind power farms have been built, but the companies that usually buy this power, called discoms, are hesitant to sign contracts for about 44 billion watts of it.
This is because they think the power is too expensive or will start too late, even though 2025 has been a great year for adding clean energy.
The government is saying not all of this power will be canceled, as it was due to aggressive bidding in the past.
To fix this, they are looking at ways like offering government support to bridge the price gap or using new types of contracts for selling power.
The goal is to prevent these clean energy projects from being scrapped and ensure the power is used.
Approximately 44 GW of renewable energy capacity is at risk of cancellation as discoms are unwilling to purchase the power.
Despite this risk, 2025 has seen record renewable energy growth with solar surpassing 125 GW and wind reaching 50 GW.
The Ministry of New and Renewable Energy (MNRE) stated not all 44 GW will be scrapped, attributing the issue to aggressive tendering and discom concerns over cost and supply dates.
Discoms seek lower prices, a mindset shaped by past ultra-low tariff tenders, contrasting with recent approved tariffs for new capacity which reflect higher costs for firm and dispatchable energy.
Potential solutions include converting uncontracted capacity to Contracts for Differences (CfDs) or adopting virtual Power Purchase Agreements (VPPAs) to secure the capacity.
- Who
- Renewable energy developers, discoms (electricity distribution companies), Ministry of New and Renewable Energy (MNRE), and implementing agencies (SECI, NTPC, SJVN, NHPC).
- What
- Approximately 44 GW of renewable energy capacity, with about 40 GW uncontracted, is at risk of cancellation because discoms are unwilling to finalize Power Sale Agreements.
- When
- The issue concerns capacities with Letters of Intent (LoIs) awarded. Recent SECI tariffs were approved in March 2025, and 2025 has seen record solar (125 GW) and wind (50 GW) installations. The article was published on November 11, 2025.
- Where
- India (implied by context of discoms, SECI, NTPC, etc.)
- Why
- Discoms are hesitant to purchase the power due to concerns about cost and distant supply start dates, influenced by a mindset of expecting ultra-low tariffs from past tenders, while newer capacities, especially Firm and Dispatchable Renewable Energy (FDRE), command higher justifiable tariffs.
Discoms' Perspective
Government/Developer Perspective
Tariff Expectations
Discoms' Perspective
Discoms expect lower renewable energy prices, influenced by past ultra-low tariff tenders (around ₹2.50/kWh).
Government/Developer Perspective
Newer capacities, especially Firm and Dispatchable Renewable Energy (FDRE), command higher justified tariffs (approved at ₹4.98–4.99/kWh in March 2025) due to requirements for guaranteed output and flexibility.
Contract Finalization
Discoms' Perspective
Discoms are unwilling to finalize Power Sale Agreements for approximately 40 GW of capacity, citing concerns over cost and distant supply start dates.
Government/Developer Perspective
Implementing agencies aim to explore all options to convince states to accept power offtake, emphasizing that only projects with no buyer will be cancelled.
- Capacity at Risk of Cancellation
- 44 GW
- Uncontracted Capacity with LoIs
- 40 GW
- Record Solar Installations (2025)
- 125 GW
- Record Wind Installations (2025)
- 50 GW
- Total Non-Fossil Fuel Capacity
- 250 GW (50% of total)
- Renewable Energy Output Share
- 30%
- Recent Approved SECI Tariffs (March 2025)
- ₹4.98–4.99/kWh