India, one of the world’s fastest-growing economies, has been at the forefront of the global clean energy transition. With ambitious targets under its Nationally Determined Contributions (NDCs), India aims to achieve 500 GW of non-fossil fuel-based capacity by 2030, including 280 GW from solar energy alone. However, recent trends indicate a worrying slowdown in clean energy project tenders and auctions, which could significantly hamper progress toward these goals.

Declining momentum with tender and auction slowdown

Tenders and auctions are the primary mechanisms through which renewable energy projects are allocated in India. These competitive bidding processes have helped drive down costs and attract private investments. However, data from the Ministry of New and Renewable Energy (MNRE) and Bridge to India indicates that renewable energy tenders issued in FY 2023-24 fell by nearly 35% compared to the previous year, and auctions witnessed a drop of nearly 50% in capacity awarded.

This decline stems from a combination of regulatory uncertainty, land acquisition challenges, grid integration issues, and financial instability among distribution companies (DISCOMs) such as:

·         Delayed PPAs and payment defaults - DISCOMs often delay signing PPAs or make delayed payments, affecting the financial viability of projects.

·         Ceiling tariffs and policy uncertainty - Arbitrary ceiling tariffs imposed by the government reduce profitability, discouraging bidders from participating.

·         Grid constraints - Lack of adequate transmission infrastructure results in bottlenecks, especially for large-scale solar and wind projects.

Implications for India’s clean energy goals

The slowdown in auctions and tenders has direct implications for India’s clean energy targets. According to a 2024 IEA report, to stay on track for its 2030 targets, India needs to add around 40–45 GW of renewable energy capacity annually. However, the current rate is hovering around 15–20 GW per year, indicating a significant shortfall.

If this trend continues this may cause the following:

·         India may fall short of its 2030 commitments under the Paris Agreement, undermining global climate goals.

·         Private and international investors may shy away due to increased policy and financial risks.

·         Delayed expansion in renewables can force reliance on coal and imported fossil fuels, increasing vulnerability to global energy price shocks.

·         The renewable energy sector was projected to create nearly 1 million new jobs by 2030. A slowdown could stall employment growth in this critical sector.

Way forward and addressing core issues

To reverse the decline in tenders and auctions and steer the country back on track, systemic reforms are essential:

·         Strengthening DISCOMs - Financially empowering distribution companies through reforms, debt restructuring, and improved collection efficiencies is crucial to ensuring timely payments and signing of PPAs.

·         Transparent and investor-friendly policies - Removing tariff ceilings and offering greater predictability in policy frameworks can restore investor confidence. The introduction of Green Open Access Rules (2022) was a step forward, but broader policy coherence is needed.

·         Accelerating transmission infrastructure- Investments in green energy corridors, especially under the GEC-II scheme worth INR 12,000 crore, must be fast-tracked to accommodate the surge in renewable energy supply.

·         Decentralised and hybrid models - Encouraging rooftop solar, floating solar, and hybrid renewable models (wind-solar-storage) can help diversify generation sources and ease land acquisition challenges.

·         Digitalisation and forecasting- Using AI and smart grids for better demand forecasting and integration of renewables can reduce curtailment and improve efficiency.

India's clean energy ambitions are among the most aggressive globally and success in this arena is not only crucial for the country’s own sustainable development but also pivotal for global climate change mitigation. However, the recent declines in renewable energy tenders and auctions signal a red flag that needs immediate attention. Without swift corrective measures, India risks derailing its energy transition and compromising long-term climate commitments.

The coming years will be critical in determining whether India can transform its clean energy vision into reality. Political will, regulatory clarity, and infrastructure readiness must converge to reignite momentum, ensuring that the world’s third-largest emitter turns into a leader in the green energy revolution

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About the author:

Kumar Shivam serves as the Area Sales Manager at Axitec Energy India, where he oversees solar energy solutions, business growth, and sales strategy across North India. With an M.Tech in Solar and Alternative Energy and over five years of experience in the renewable energy sector, he brings a strong blend of technical expertise and strategic sales acumen to his role. His core competencies include PV system design, solar technologies, energy storage, grid and off-grid solutions, feasibility studies, and solar policy frameworks.

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