Report says India's renewable sector is hit by low demand and cancellations

The Institute for Energy Economics and Financial Analysis reported on Thursday that India's renewable sector faces a number of obstacles, including a weak demand for bids, delays in power agreements and cancellations of projects.

IEEFA reported that the country issued a record number of 73 gigawatts for utility-scale renewable energies tenders in 2024. However, about 8.5 GW were undersubscribed, five times more than in 2023, due to lower demand caused by complex tender structures and delays with interstate transmission readiness.

IEEFA, a group that tracks and analyses issues related to energy markets and policies and tracks India's unsigned power sales agreements, reported that India's total capacity of unsigned power purchase agreements has exceeded 40 GW. Tenders from the top clean energy agency Solar Energy Corporation of India account for approximately 12 GW.

The report also stated that about 38.3GW of capacity, or 19%, was cancelled between 2020 and 2024 due to design problems, technical difficulties, lack of demand, delays in signing agreements for power supply, and issues with tenders.

Ashita Srivastava is a senior research associate and co-author at JMK Research.

Srivastava stated that "(the) issues could deter investors from future renewable energy projects, affecting the availability and affordability of low-cost funding by large-scale financiers."

India's renewable power sector faces many challenges as it aims to reach 500 GW by 2030. This is an increase from the current 165 GW.

India also fell short of its goal to add 175 GW of power by 2022. Fossil fuels accounted for more than two thirds of total electricity generation in 2017.

According to the Ministry of Renewable Energy, the country will add nearly 28 GW in solar and wind power by 2024. Solar power is expected to account for 70% of that total. Sethuraman N R; Sonia Cheema, Editor

(source: Reuters)