Unlocking India’s Renewable Energy Potential: Tackling Policy Bottlenecks for a Greener Future
The renewable energy sector, as a matter of fact, has entered a critical phase of its growth journey and implementation of utility-scale RE projects needs to be accelerated not only to build energy self-reliance but also to strengthen investors’ confidence in the renewable energy projects. In this context, the role of Renewable Energy Implementing Agencies (REIA) assumes greater significance as a market maker.
July 21, 2025. By News Bureau
As per the Nationally Determined Contribution (NDC), India aims to achieve 50 percent of total installed power capacity from non-fossil fuel-based sources by 2030. Having said that, to maintain the energy transition momentum, there is an urgent need to address the policy bottlenecks, particularly related to land acquisition, transmission capacity expansion, power purchase agreements (PPAs), and grid connectivity. Timely project implementation is the key to ensure energy security for its growing economy.
The renewable energy sector, as a matter of fact, has entered a critical phase of its growth journey and implementation of utility-scale RE projects needs to be accelerated not only to build energy self-reliance but also to strengthen investors’ confidence in the renewable energy projects. In this context, the role of Renewable Energy Implementing Agencies (REIA) assumes greater significance as a market maker. Close to 40 GW of renewable energy projects tendered by four REIAs in FY23-24 failing to find buyers point to the fact that certain crucial aspects in the renewable energy ecosystem require immediate attention.
The Bottlenecks
The challenges that the renewable energy sector is presently facing can be categorised into four segments – policy disparities between state and central governments, regulatory issues, financial challenges, tariff rate dispute between developers and distribution companies (discoms) and inadequate grid infrastructure. All these factors invariably lead to cost overruns, missed project timelines, a dent in the investors’ confidence and enhanced risk perception.
To begin with, let’s talk about the major issue - the land acquisition challenge. Land acquisition process often stretches to almost two years in certain regions due to administrative hurdles, inconsistent local regulations and outmoded land records maintenance. As land records and transactions come under state jurisdiction, absence of any centralised and synchronised land policy adds layers of complexity to the project implementation process.
Large-scale solar and wind projects require vast land parcels. Lack of structured land banks and fragmented land ownership complicate the land acquisition process. This delay not only impacts project timelines but also discourages investors who always count on ease of doing business. Moreover, discoms and developers are sometimes at loggerheads over tariff.
Grid connectivity presents another major challenge. The construction of transmission lines, which can take around 36 months and in some cases 48 months, is often delayed due to right-of-way issues, environmental concerns, and logistical constraints posed by natural barriers such as rivers and hills. Unless there is an urgent focus on strengthening grid, networks and accelerating the construction of Green Energy Corridors, renewable energy transmission and distribution will continue to face roadblock, impacting project viability.
Policy Reforms: The Roadmap to Growth
To ensure steady progress in energy transition, the government needs to undertake certain measures to address the prevailing challenges. The state governments of renewable-rich states such as Rajasthan, Gujarat, and Madhya Pradesh are sanctioning land parcels for renewable energy projects to address land availability issues. Some states are also combining unused government land for wind power projects. However, to make a larger impact, a policy can be formulated to digitise the land record and synchronise the state level policies. A single-window clearance could further expedite approvals, reducing bureaucratic delays. Alternatively, the government needs to focus on developing more solar parks which offer turnkey or ready-to-use facilities to renewable energy producers.
In addition, investments in transmission infrastructure must keep pace with the development of renewable projects. The government should prioritise the expansion of Green Energy Corridors and improve interstate transmission capacity to ensure seamless evacuation of renewable energy. The third stage of Green Energy Corridor which is being worked on at the moment has created the required platform for the state governments to come together to bolster transmission infrastructure, developing a connect between the renewable energy-generating states and renewable energy markets.
Resolving power purchase agreements (PPAs) and power sales agreements (PSA) delays should also be the priority of the government. Apart from formulating policies for structured timeline for signing PPAs and PSAs, policy makers in both states and the centre need to ascertain the reason behind lack of off takes and reluctance to PSA commitments. Launching a uniform renewable energy tariff could be a solution to the delays.
A Unified Effort
A robust renewable energy blueprint is more than just a means to meet India’s climate goals—it is crucial for energy security, economic growth, and employment generation. What is extremely encouraging to note is that the spirit of collaborations among states have started taking shape. Rajasthan and Telangana have come together to set up 1500 MW solar parks by leveraging Rajasthan’s solar resources and Telangana’s energy infrastructure. The renewable energy sector requires more such collaborations to implement various useful schemes launched by the government. Removing policy bottlenecks is crucial to pave the way for collaborations which will not only address lag in capacity building and fast-track the country’s energy transition but also position India as a global leader in clean energy innovation. And to make that happen, all stakeholders must work together to accelerate the pace of transition.
- Hardik Adhiya, Chief Operating Officer, Onix Renewable Limited
please contact: contact@energetica-india.net.
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