No Blanket Cancellations of REIA-Awarded Projects, Due Diligence Underway on Unsigned PSAs: MNRE
The Ministry of New and Renewable Energy has clarified that there will be no blanket cancellations of renewable energy projects awarded by implementing agencies where power sale agreements are yet to be signed, assuring developers that any cancellations will be reviewed on a case-by-case basis after thorough due diligence.
November 05, 2025. By Mrinmoy Dey
The government is closely monitoring the cases where Letters of Award (LoAs) have been issued by REIAs, but PSAs with DISCOMs or end procurers have not yet been finalised. Some DISCOMs have expressed apprehensions in signing PSAs for such bids wherein the likely start date of connectivity for the successful bidders is in the distant future, MNRE said in a statement.
It further added that REIAs have been advised to carry out due diligence by reviewing and categorising such cases based on the likelihood of securing PSAs with end procurers.
“This assessment would consider multiple factors, including the configuration of renewable energy envisaged to be supplied under the bid, the discovered tariff for supply of renewable power and the expected timeline for connectivity. Following this review, only those LoAs with minimal or no prospects of PSA execution may be considered for cancellation on a case-by-case basis,” it said.
Even then, such cancellations are expected to be phased and undertaken only after all feasible and viable options for executing the PSAs and corresponding Power Purchase Agreement (PPAs) have been thoroughly explored, MNRE clarified.
As of September 30, 2025, REIAs have issued LoAs for 43,942 MW of capacity where PSAs with end procurers remain unsigned. This figure reflects the scale of recent bidding activity and the evolving nature of demand aggregation and procurement timelines. Since April 2023, these agencies have successfully signed PSAs for 24,928 MW of capacity, indicating continued progress in contract execution and market alignment, MNRE stated.
It further added that the government, with stakeholders, is actively exploring mechanisms to optimise transmission capacity and improve the contracting framework. These efforts include examining the feasibility of signing PPAs and PSAs for certain awarded capacities and reviewing provisions such as the green shoe option. “No blanket cancellation of the bids is being envisaged,” it asserted.
Further, the apprehensions regarding massive investments in renewable power may get into limbo, on account of cancellation of LoAs which cannot secure PSA/PPA, is unfounded, since major investment in any renewable power project starts only after the execution of Power Purchase Agreement and the investments, if any made by any RE power developer in land or connectivity, are used by the RE power developers for other existing projects or future projects in their portfolio, it said.
To facilitate the execution of PSAs, the Government has undertaken several proactive measures. “These include urging States to comply with the Renewable Consumption Obligation (RCO) under the Energy Conservation Act, and advising Renewable Energy Implementing Agencies (REIAs) to aggregate demand from DISCOMs and other consumers before designing and issuing tenders. Regional workshops have been organised with major renewable energy-procuring States to address implementation challenges and accelerate PSA signing,” it said.
In addition, the Standard Bidding Guidelines for solar, wind, hybrid, and Firm and Dispatchable Renewable Energy (FDRE) have been amended to allow for cancellation of Letters of Award (LoAs) that remain unexecuted beyond 12 months from the date of issuance, MNRE said.
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 proving to be more economically viable than wind-solar hybrid projects, particularly due to their ability to supply power during peak demand hours,” MNRE said.
Accordingly, the government is sensitising the REIAs to move from plain solar tenders to tenders of Solar + Energy Storage, tenders with configuration to supply renewable power during peak hours and tenders with configuration to supply firm and dispatchable renewable energy (FDRE).
Transmission infrastructure is also being scaled up significantly to match the pace of renewable energy deployment. The INR 2.4 lakh crore investment plan for transmission associated with 500 GW of renewable energy, along with recent amendments to the General Network Access (GNA) regulations, is designed to unlock stranded capacity and enable dynamic corridor sharing. These reforms are expected to ease congestion and improve grid access in renewable-rich states, MNRE stated.
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