**Executive Summary**
This document is a response to an unstarred question in the Lok Sabha regarding challenges in signing Power Purchase Agreements (PPAs) for renewable projects. The response, dated December 17, 2025, details the Government's efforts to address these challenges, including urging states to comply with Renewable Consumption Obligations (RCO) and promoting tenders for solar-plus-storage configurations. The document also highlights the role of Renewable Energy Implementing Agencies (REIAs) and progress made toward non-fossil fuel power capacity targets.
**Key Points / Main Content**
* **Challenges in Signing PPAs**
* Decreasing cost of solar-plus-storage and dispatchable renewable power increases preference for these solutions among distribution companies and end procurers.
* Reduced demand for plain solar power, leading to a shift towards solar-plus-storage and wind-solar hybrid projects.
* **Government Measures to Facilitate PPAs**
* Sensitizing REIAs (SECI, NTPC, NHPC, SJVN) to shift from plain solar tenders to those including energy storage or configuration to supply power during peak hours, and Firm and Dispatchable Renewable Energy (FDRE).
* Urging States to comply with Renewable Consumption Obligation (RCO).
* Advising REIAs to aggregate demand from Electricity Distribution companies (DISCOMs) and other consumers.
* Organizing regional workshops to address implementation challenges and accelerate PPA signing.
* **Role of Renewable Energy Implementing Agencies (REIAs)**
* REIAs (SECI, NTPC, NHPC, SJVN) issue tenders as Intermediary Procurers for long-term renewable power procurement.
* REIAs sign Power Sale Agreements (PSAs) with End Procurers (DISCOMs) and back-to-back Power Purchase Agreements (PPAs) with Renewable Power Developers.
* REIAs do not enter into PPAs unless they have executed Power Sale Agreements with the End Procurers.
* **Renewable Power Project Implementation**
* Renewable power developers install and commission projects on Build, Own & Operate (BOO) basis.
* Compliance with regulations of Central/State Government and agencies (CEA, CTUIL, Grid-India, CERC/SERC, RLDC/SLDC) ensures promotion and deployment of clean energy and grid reliability.
* **Progress Towards Renewable Energy Targets**
* India has achieved 50% of its installed electricity capacity from non-fossil fuel sources.
* Installed capacity from non-fossil sources stands at approximately 259 GW as of October 31, 2025, with 31.2 GW added in the current financial year.
**Impact Analysis**
* **Renewable Energy Implementing Agencies (REIAs) (SECI, NTPC, NHPC, SJVN)**
**Impact**
REIAs need to adapt to the changing market dynamics by focusing on tenders that promote solar-plus-storage solutions and dispatchable renewable energy.
**Action Required**
REIAs must design and issue tenders that prioritize solar with energy storage, peak-hour power supply configurations, and Firm and Dispatchable Renewable Energy (FDRE).
* **States**
**Impact**
States are expected to contribute significantly to achieving national renewable energy targets.
**Action Required**
States are urged to comply with the Renewable Consumption Obligation (RCO) under the Energy Conservation Act.
* **Electricity Distribution Companies (DISCOMs) and Other Consumers**
**Impact**
DISCOMs will have increased access to renewable energy sources and solutions that meet their specific demand profiles.
**Action Required**
DISCOMs should engage with REIAs to aggregate their demand for renewable energy and participate in the tender process.
* **Renewable Power Developers**
**Impact**
Renewable Power Developers need to align with the updated tender requirements and focus on projects with energy storage and dispatchability capabilities.
**Action Required**
Developers must participate in tenders issued by REIAs and ensure compliance with regulations for project implementation and grid integration.
Key Entities Referenced
Power Purchase Agreements (PPAs): Agreements for renewable projects, the signing of which is facing challenges.
Renewable Energy Implementing Agencies (REIAs): Agencies such as SECI, NTPC, NHPC, and SJVN Limited responsible for issuing tenders and signing PPAs for renewable energy projects.
Solar Energy Corporation of India Limited (SECI): One of the Renewable Energy Implementing Agencies (REIAs) responsible for issuing tenders and signing PPAs for renewable energy projects.
Renewable Consumption Obligation (RCO): Requirement for states to comply with the renewable energy consumption target, under the Energy Conservation Act.
Energy Conservation Act: Act under which the Renewable Consumption Obligation is defined, urging states to comply.
GOVERNMENT OF INDIA
MINISTRY OF NEW AND RENEWABLE ENERGY
LOK SABHA
UNSTARRED QUESTION NO. 2762
ANSWERED ON 17.12.2025
CHALLENGES IN SIGNING PPAS FOR RENEWABLE PROJECTS
2762. Shri Shrirang Appa Chandu Barne
Smt. Bharti Pardhi
Shri Ravindra Dattaram Waikar
Shri Vishaldada Prakashbapu Patils
Shri Naresh Ganpat Mhaske
Dr. Shrikant Eknath Shinde
Will the Minister of NEW AND RENEWABLE ENERGY be pleased to state:
(a) the details of the challenges faced in signing Power Purchase Agreements (PPAs) for
renewable projects along with the steps taken by the Government to address them;
(b) the manner in which direct Power Purchase Agreements between renewable developers and
agencies like National Hydroelectric Power Corporation (NHPC), National Thermal Power
Corporation (NTPC) and Solar Energy Corporation of India (SECI) would help accelerate
capacity addition;
(c) the target set for country’s non-fossil fuel installed power capacity by the year 2030 and the
manner in which these Power Purchase Agreement strategy would contribute to it;
(d) the details of Government and private stakeholders involved in implementing this
procurement framework; and
(e) the manner in which this approach ensures grid reliability and promotes cleaner energy
sources?
ANSWER
THE MINISTER OF STATE FOR NEW & RENEWABLE ENERGY AND POWER
(SHRI SHRIPAD YESSO NAIK)
(a) With the declining cost of solar-plus-storage and dispatchable renewable power, there is a
growing preference among distribution companies and end procurers for such solutions. This
shift has been accompanied by a reduced demand for plain solar power. Solar-plus-storage
configurations are also being preferred over wind-solar hybrid projects, particularly due to
their ability to supply power during peak demand hours. Accordingly, the Government has
sensitized Renewable Energy Implementing Agencies (REIAs), namely Solar Energy
Corporation of India Limited (SECI), NTPC Limited, NHPC Limited and SJVN Limited to
move from plain solar tenders to tenders of Solar with Energy Storage, tenders with
configuration to supply renewable power during peak hours and tenders with configuration to
supply Firm and Dispatchable Renewable Energy (FDRE).
To facilitate the further execution of Power Purchase Agreements (PPAs) in respect of bids
issued by REIAs, the Government has undertaken several proactive measures. These include
urging States to comply with the Renewable Consumption Obligation (RCO) under theEnergy Conservation Act, and advising REIAs to aggregate demand from Electricity
Distribution companies (DISCOMs) and other consumers before designing and issuing
tenders. Regional workshops have been organized with major renewable energy-procuring
States to address implementation challenges and accelerate PPA signing.
(b) to (e) Generally Renewable Energy Implementing Agencies (REIAs), namely Solar Energy
Corporation of India Limited (SECI), NTPC Limited, NHPC Limited and SJVN Limited, issue
tenders as Intermediary Procurers for long-term procurement of renewable power. Renewable
Power Developers, which may be from private or public sector, participate in these tenders
wherein the successful bidders are decided through transparent competitive bidding process.
REIAs sign Power Sale Agreements (PSAs) with End Procurers like Electricity Distribution
companies (DISCOMs) and sign back-to-back Power Purchase Agreements (PPAs) with the
Renewable Power Developers who are the successful bidders under the aforesaid tenders
issued by REIAs. Generally, REIAs do not enter into PPAs with Renewable Power Developers
unless they have executed Power Sale Agreements with the End Procurers. Normally, after the
signing of PPA between REIA and renewable power developer, the renewable power
developer installs and commissions the renewable power project on Build, Own & Operate
(BOO) basis, in compliance to the relevant rules and regulations of the concerned Central /
State Government and Government agencies like Central Electricity Authority (CEA), Central
Transmission Utility of India Limited (CTUIL), Grid Controller of India Limited (Grid-India),
Central/State Electricity Regulatory Commission (CERC/ SERC), Regional/ State Load
Dispatch Centers (RLDC/SLDC), etc. which ensures both promotion and deployment of clean
energy as well as grid reliability.
Aforesaid mechanism of setting up renewable power projects through long-term renewable
power procurement by REIAs acting as intermediary procurers has contributed greatly to
promoting cleaner energy sources by increasing share of renewable power in installed power
generation capacity and as a result India has already achieved 50% of its installed electricity
capacity from non-fossil fuel sources, five years ahead of the target set under its Nationally
Determined Contributions to the Paris Agreement. As of 31 October 2025, the installed
capacity from non-fossil sources stands at about 259 GW, with 31.2 GW added in the current
financial year up to October 2025.
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