The bidding for new renewable energy (RE) projects in the country fell sharply, with only 5.8 GW awarded in eight months of FY2026, against the required target of 45-50 GW for the year, owing to concerns about the execution related to available transmission connectivity for the RE sector.
The unsigned power purchase agreements (PPAs) capacity remains sizeable at about 40-45 GW as of date, based on industry channel check, according to the rating agency ICRA’s analysis. To achieve the target of 500 GW of non-fossil fuel energy by 2030, India needs to add 45-50 GW annually.
“The decline in new project bids and delays in signing PPAs for large RE capacity by Central nodal agencies clearly reflects the concerns on the execution related to available transmission connectivity for the RE sector,” said Girishkumar Kadam, Senior Vice President & Group Head – Corporate Ratings, ICRA.
He said that reported grid curtailments in Rajasthan for renewable assets, particularly solar assets, during the solar hours in a few time blocks, due to grid stability requirements, is also a concern, given the absence of a grid compensation clause in the PPAs for such cases.
The agency’s estimates show that the share of generation from the renewable energy capacity, including large hydro, is expected to cross 35% by FY2030 from 22.1% in FY2025, with expected incremental capacity addition of 200 GW between FY2025 and FY2030.
This, in turn, also hinges on the extent of implementation of the ongoing project pipeline, where the projects are bid out and the PPAs are signed, the development of adequate transmission connectivity infrastructure, as well as timely bidding for new RE projects, along with PPAs signing by Central nodal agencies.
As India grapples with variability in renewable generation, Battery Energy Storage Systems (BESS) have emerged as an important enabler for grid stability. The government has introduced viability gap funding for BESS capacity, along with extended transmission charge waivers for storage projects until 2028.
The central nodal agencies and state discoms have awarded standalone BESS projects aggregating to over 20 GWh since April 2024 to October 2025. Also, the share of round-the-clock (RTC), firm and dispatchable renewable energy (FDRE) and solar plus storage projects remained high at 90% of the total RE capacity awarded in 8M FY2026.