India's renewable energy sector hit by weak demand, cancellations, report says
India's renewable energy sector grapples with low demand for tenders, delays in power agreements, and project cancellations, jeopardizing its 2030 target of 500 GW non-fossil power capacity. With unsigned agreements totaling over 40 GW and 38.3 GW of projects canceled from 2020 to 2024, investor confidence and low-cost financing are at risk, according to IEEFA.
The country issued a record 73 gigawatts of utility-scale renewable energy tenders in 2024, but about 8.5 GW was 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.
India's cumulative unsigned power sale agreement capacity has exceeded 40 GW, with tenders from top clean energy agency Solar Energy Corporation of India alone accounting for about 12 GW, IEEFA, which tracks and examines issues on energy markets and policies, said.
Meanwhile, about 38.3 GW of capacity was cancelled from 2020 to 2024 - 19% of the total - due to tender design issues, location or technical challenges, undersubscription and delays in signing power supply agreements, the report added.
"Delays in project implementation pose a significant challenge to India's renewable energy target for 2030," said Ashita Srivastava, senior research associate at JMK Research and co-author of the report.
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The challenges highlight the struggles faced by India's renewable energy sector as the government targets at least 500 GW of non-fossil power capacity by 2030, up from 165 GW currently.
India has also fallen short of its previous goal of adding 175 GW by 2022, with fossil fuels accounting for more than two-thirds of the total power generation last year.
The country added nearly 28 GW of solar and wind capacity in 2024, with solar power additions accounting for 70% of the total, according to the renewable energy ministry.
