Here’s an inconvenient truth about India’s renewable energy revolution: you can build all the solar panels and wind turbines you want, but if nobody’s willing to buy the electricity they generate, you’ve just created very expensive lawn ornaments. That’s the uncomfortable reality facing 42 gigawatts of renewable energy projects currently under Ministry of Power review—projects that exist in a peculiar limbo, generating capacity that nobody has committed to purchasing. It’s the energy equivalent of baking thousands of cakes with nowhere to sell them, except these cakes cost billions and were supposed to save the planet.
The Ministry is now considering shelving projects deemed commercially unviable due to state utilities’ reluctance to sign offtake agreements. This isn’t just administrative housekeeping; it’s a potential blow to India’s audacious goal of doubling clean energy capacity to 500 gigawatts by 2030. When nearly a tenth of your targeted capacity sits orphaned without buyers, something fundamental has broken in the supposedly inevitable march towards renewable energy dominance.
The Infrastructure Cannot Keep Pace With Ambition
India’s renewable sector has grown explosively, adding thousands of megawatts annually in a sprint that looked impressive on paper and in ministerial press releases. The problem? The infrastructure meant to support this growth—transmission lines, distribution networks, grid management systems—has been gasping to keep up. It’s rather like building motorways without bothering about the connecting roads, then wondering why traffic doesn’t flow smoothly. Many renewable projects struggle to find stable buyers because state-run utilities, the natural customers for this power, are financially anaemic and deeply cautious about long-term commitments. These distribution companies—discoms in industry parlance—are heavily indebted, operationally inefficient, and understandably nervous about signing power purchase agreements without ironclad guarantees. Their reluctance isn’t obstinacy; it’s survival instinct from organisations that have watched too many ambitious energy projects turn into financial albatrosses.
Without active offtake agreements, these renewable projects become stranded assets that burden rather than strengthen grid stability. The situation worsens for projects commissioned after June 2025, which must begin paying transmission charges starting at 25% and escalating over time as government subsidies phase out. This fundamental policy shift—intended to improve market efficiency and reduce state subsidy burdens—has instead created a commercial minefield. As Ashwin Gambhir from Pune’s Prayas energy group notes, “Utilities have shied away from buying interstate renewable power as subsidies diminish, stressing project viability.”
The technical challenges compound the commercial ones. Renewable energy’s inherent volatility and intermittency make utilities nervous without adequate battery storage systems to stabilise supply. Solar power vanishes at night; wind power ebbs unpredictably. Grid managers need reliability, but renewables without storage offer variability. The government has recommended coupling renewable generation with battery storage, but scale and investment gaps persist. Storage technology remains expensive, and integrating it across thousands of megawatts of capacity requires capital that many developers simply don’t have.
When Policy Changes Create Casualties
The phasing out of interstate transmission subsidies represents sound long-term policy—markets shouldn’t depend indefinitely on government subsidies, and cost transparency theoretically improves efficiency. But theory and practice diverge when you’re managing an energy transition affecting hundreds of millions of people. The gradual withdrawal of subsidies shifts cost burdens to project developers and utilities simultaneously, creating a financial squeeze that leaves both sides reluctant to commit. Projects operational post-June 2025 face escalating transmission fees that fully phase out by 2028, fundamentally altering the economics that made these projects viable when developers first committed capital.
The Central Electricity Regulatory Commission‘s stricter adherence requirements for power supply deviation limits further squeeze wind and solar producers’ revenues. Every percentage point of deviation from contracted supply incurs penalties, but renewable energy by its nature produces variable output. This creates a regulatory environment that simultaneously demands renewable energy expansion whilst penalising the characteristics that make renewables different from conventional power. It’s rather like demanding someone run a marathon whilst repeatedly tying their shoelaces together.
These changing dynamics expose India’s discoms to severe solvency risks, directly affecting clean energy uptake. Many state utilities operate at persistent losses, cross-subsidising agricultural and residential consumers with industrial tariffs that drive manufacturers towards captive power generation. This vicious cycle—losses leading to poor service, leading to customer defection, leading to more losses—leaves utilities with neither the financial capacity nor institutional confidence to commit to large renewable power purchases.
Climate Ambitions Meet Commercial Reality
The potential cancellation of 42 GW represents more than statistics; it symbolises the gap between India’s climate commitments and ground-level execution capacity. India, the world’s third-largest carbon emitter, pledged substantial renewable capacity increases to meet net-zero ambitions under the Paris Accord. Currently, approximately 44 GW of green power capacity remains unsold and underutilised—a stark illustration that building capacity and deploying it effectively are entirely different challenges.
The Ministry of New and Renewable Energy has clarified it will adopt a case-by-case approach rather than blanket cancellations, focusing on projects where power sale agreements remain genuinely viable. This pragmatic stance acknowledges that whilst some projects face insurmountable commercial obstacles, others might succeed with targeted support or improved market conditions. MNRE urges developers and state governments to expedite signing agreements and prioritise grid upgrades to accommodate new energy flows, but urgency in ministerial statements doesn’t automatically translate to action at state level.
Extended dialogues amongst developers, utilities, and government continue, attempting to balance competing objectives—maintaining renewable capacity growth, ensuring grid stability, protecting utility solvency, and meeting climate targets. These aren’t easily reconcilable goals when fundamental infrastructure and financial constraints persist. Industry stakeholders increasingly advocate for integrated solutions: rapid grid modernisation, large-scale battery storage deployment, functional cross-state power markets, and comprehensive financial reforms for distribution companies. Each element addresses part of the puzzle, but implementing all simultaneously requires coordination, capital, and political will that has proven elusive. Success demands harmonising ambitious clean energy targets with pragmatic execution strategies, ensuring projects have viable commercial pathways and grid support rather than existing as aspirational capacity without actual utility.
India’s renewable sector stands at a critical juncture. The country champions green energy investment as cornerstone energy policy, yet infrastructural, financial, and regulatory barriers threaten to stall significant progress. Whether India meets its 500 GW renewable capacity goal by 2030 depends less on building capacity—India has demonstrated it can do that—and more on creating functional markets, robust infrastructure, and financial mechanisms that make that capacity commercially viable and operationally useful. The 42 GW under review represents not just potential cancellations but a broader reckoning with the difference between capacity targets and functional energy transition. The coming months will reveal whether India can bridge that gap or whether ambitious goals will be quietly revised downward to match uncomfortable reality.