India May Scrap 42 GW of Renewable Projects as States Hold Back Power Purchases

India is planning to cancel green power projects equivalent to as much as a fifth of the country’s renewable capacity as sate electricity boards (utilities) are not willing to buy their electricity. 

The power ministry has reviewed 42 gigawatts (GW) worth of planned projects that have yet to sign offtake agreements and may scrap those without buyers, reported Bloomberg. 

While cancelling these projects could reduce pressure on India’s overloaded power grid which is struggling to keep up with India’s rapid renewable rollout. It would also dampen clean energy goals of the world’s third-highest emitter, which aims for doubling clean power capacity to 500 GW by 2030.

The reluctance of financially challenged utilities to commit to buying renewable electricity without ample energy storage systems, in India has resulted in a mismatch of power supply and demand. The government has called for developers to couple projects with batteries to stabilise such volatility.

Utilities have also shied away from buying power from other states as the government begins to phase out transmission subsidies that helped drive the renewables boom in the country, according to Ashwin Gambhir, a fellow at Prayas, a Pune-based non-profit research group that focuses on energy.

Projects commissioned after June this year will have to pay to send electricity from one state to the other, starting with 25% of the transmission charges. That will increase for future ventures, with aid completely phased out for operations starting after June 2028, according to a plan by the Central Electricity Regulatory Commission.

State Utilities Hold Back Purchases

According to a Reuters report published in September 2025, the Ministry of New & Renewable Energy (MNRE) is in talks with the state governments to buy more clean energy as many state-run utilities have been delaying purchases.

“Trying to convince state governments which are looking for power prices to fall further. Will hold a second round of talks soon,” federal minister Pralhad Joshi said at a Confederation of Indian Industry’s energy conference, reported Reuters.

India has over 44 GW of unsold clean energy, government data shows, due to lower demand from state power utilities.