Pralhad Joshi to meet chief ministers to speed up signing of green-energy PPAs

The Centre has already contacted states urging them to accelerate the signing of PPAs, and Union minister for new and renewable energy Pralhad Joshi is set to meet with chief ministers one-on-one on the issues of unsigned PPAs, said two people close to the development.

One of them said the ministry’s recent monthly meetings with power generators and other stakeholders have also focused on the issue, with several proposals being put forth, including getting prior commitments from states for PPAs before coming up with new bids and the prospects of halting new bids before a considerable amount of the unsigned power sale agreements are signed.

Power developers sign PPAs with procurers, who sign power sale agreements (PSAs) with distributors. Power procurers include companies such as state-run Solar Energy Corp. of India (SECI), NTPC, NHPC, and SJVN.

Unutilized power

Currently, around 50 gigawatts (GW) of renewable energy capacity remains unutilized due to the non-signing of PPAs and PSAs.

“The Centre has already raised the issue with states, and in the coming weeks, the Union minister would have one-on-one meetings with state chief ministers on the same,” the person said.

“In a recent meeting, it was discussed whether new bids should be announced before signing of new bids. It was also discussed that the renewable energy implementation agencies (REIA) need to design new bids only after a commitment from states on procurement of power,” said the second person, adding that industry stakeholders have raised concerns over the issuance of new bids without the signing of PPAs for older bids.

Industry stakeholders have also sought a waiver of transmission charges for projects under pending PPAs. Currently, transmission charges are waived for 25 years for renewable energy projects, such as solar, wind, and hybrid projects, and battery energy and pump-storage projects commissioned before 30 June 2025.

Power producers have already sought an extension of the waiver on inter-state transmission charges for renewable energy until 2030 to help further the adoption of green energy in the country.

The delay in signing PPAs and PSAs comes at a time when the Centre has raised the target for tendering green power projects to 50GW every year till 2027-28. On 15 August, Prime Minister Narendra Modi reaffirmed India’s ambitious goal to achieve 500GW of non-fossil-based energy capacity by 2030, up from about 218GW now. Further delays in signing agreements could make power from older projects unattractive, as newer ones with lower tariffs keep coming online.

Central push

In a recent interaction with the media, Joshi said the Centre is in talks with states to get them to sign more PPAs for green power and hoped that the signing of the pending PPAs will pick up pace.

“We are working with state governments and the concerned discoms. We are continuously interacting; because of the (parliament) session in March, we have not been able to interact further. But before March, I have interacted, and secretary and then joint secretary, we are all working together at our respective levels, and we are working with states,” he said.

The minister said states are understanding that the requirement of renewable energy along with conventional energy and the upcoming implementation of the renewable purchase obligations (RPO) would also force states to sign PPAs and procure green power.

A November JM Financial study of 357 renewable energy projects showed that 95GW of cumulative capacity was awarded from April 2022 to October 2024, while about 55GW of capacity is still awaiting the signing of PPAs. The report said that, on average, it takes 8-10 months to finalize a PPA.

It noted that there is a growing preference for hybrid and storage-backed solar projects over standalone solar projects. Further, discoms are also cautious about future demand uncertainty.

The government has also mandated a minimum of two-hour integrated battery capacity for all solar project bids, which is expected to bring in demand for future projects. In 2024-25, projects with a total capacity of 25GW were installed, an all-time high annual installation of green power in the country.

Queries mailed to the Union ministry of new and renewable energy remained unanswered till press time.