India’s Renewable Energy Ambitions Face Hurdles Amid Project Delays, Weak Demand And Cancellations: Report

India’s renewable energy sector, once seen as a cornerstone of its sustainable growth strategy, is grappling with a series of setbacks, including low investor interest in tenders, delays in finalising power agreements, and project cancellations, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA), reported The Economic Times.

Lagging Demand Threatens Expansion Plans

Despite issuing a record 73 GW in renewable energy tenders last year, undersubscribed - five times higher than in 2023 - amid lower demand due to complex tender structures and delays in interstate transmission readiness, IEEFA said in a report.

Further complicating matters, over 40 GW of power sale agreements remain unsigned, including 12 GW linked to the Solar Energy Corporation of India (SECI).

High Cancellation Rates Raise Red Flags

Between 2020 and 2024, almost 38.3 GW worth of projects were scrapped, representing nearly one-fifth of all tenders issued.

The reasons for these cancellations range from tender design issues, location or technical challenges, undersubscription and delays in signing power supply agreements, the report added.

Risk to India’s Renewable Energy Targets

India has set an ambitious goal of reaching 500 GW of non-fossil fuel capacity by 2030, yet the current pace suggests significant roadblocks ahead. 

The country previously fell short of its 175 GW renewable target by 2022, and with fossil fuels still dominating its energy mix, experts warn that delays in project execution and financing could slow future expansion.

Ashita Srivastava, senior research associate at JMK Research and co-author of the IEEFA report, emphasised that these persistent hurdles could dampen investor enthusiasm, limiting access to affordable financing for large-scale clean energy projects.

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