The central government has urged states lagging in their renewable purchase obligations (RPOs) to expedite the finalisation of power sale agreements (PSAs) with several uncontracted renewable energy projects, according to renewable energy secretary Santosh Kumar Sarangi.
The renewable energy ministry is currently engaging with around 15 states, while renewable energy implementing agencies (REIAs) are holding parallel discussions with distribution companies (discoms) to facilitate these agreements. As of the end of September 2025, about 43.9 GW of capacity has been awarded but remains without signed PSAs.
If these agreements are completed, a portion of this capacity could move swiftly toward implementation. India currently has 272 GW of non-fossil fuel capacity and aims to reach 500 GW by 2030. Sarangi noted that discussions with states falling short of their RPO requirements are ongoing, with expected progress in the next one to one-and-a-half months.
RPO rules mandate that discoms, open access consumers, and captive power producers source a specified minimum share of their annual electricity usage from renewable energy sources.
In December, the ministry advised REIAs to conduct due diligence by reviewing and categorising the uncontracted projects based on their potential to secure PSAs. Projects deemed unlikely to achieve PSA execution may face cancellation, though such decisions would be made individually and only after all viable avenues for securing PSAs and corresponding power purchase agreements (PPAs) have been exhausted.
Sarangi said all REIAs are actively reaching out to discoms, and the ministry has also taken up the matter with states not meeting their RPO commitments. Despite these challenges, demand for renewable energy remains strong, with bidding activity increasingly aligned to the needs of state utilities.
Although recent auction tariffs have drawn attention, industry representatives say pricing is not the core issue. “Solar bids are not excessively high—the challenge is that the power offered is solely solar,” one official explained.
To better match supply with demand, REIAs and agencies such as SECI are coordinating procurement efforts with discoms’ load profiles. This includes designing bids that combine solar power with battery energy storage systems, which have seen growing uptake in recent months.