India Considers Rebidding 40 GW of Stalled Solar and Wind Projects

India’s Ministry of New and Renewable Energy (MNRE) is exploring the rebidding of approximately 40 GW of solar and wind projects that currently have power purchase agreements (PPAs) but remain stalled. The move aims to revive investments and accelerate the country’s clean energy expansion, as many projects have been delayed due to the lack of viable offtake agreements with distribution companies (DISCOMs).

Challenges and Market Dynamics

Slower electricity demand in India, partly due to unseasonal rains, has reduced the immediate need for new generation. Without assured PPAs, investors have been reluctant to deploy capital. Current tariff levels stand at ₹2.38–2.56 per unit for solar and ₹3.70–3.90 for wind, reflecting evolving cost and demand dynamics.

Virtual Power Purchase Agreements (VPPAs) as a Solution

The Central Electricity Regulatory Commission (CERC) is finalizing guidelines for virtual PPAs (VPPAs) — flexible contracts that allow corporates to financially support renewable projects without taking physical delivery of electricity. Buyers can use VPPAs for ESG compliance, while power is sold on non-commercial markets.

VPPAs are being structured as “non-transferable specific delivery” contracts, not financial derivatives. Industry experts, including FICCI, see this as a framework capable of unlocking over 40 GW of stranded capacity, restoring investor confidence and aligning India with global corporate climate commitments.

Policy Outlook and Next Steps

The MNRE’s rebidding exercise will integrate VPPAs as a dual-track strategy to ensure projects are viable and timely. Officials stress that the new tenders aim to mitigate investment risk, reflect market realities, and ensure capacity addition ahead of India’s 2030 clean energy targets.