MNRE to Hold Talks with States to Address Unsold Clean Energy Amid Discom Delays

The Union Ministry of New and Renewable Energy (MNRE) is in talks with state governments to buy more clean energy as many State-run utilities have been delaying purchases, the country’s renewable energy minister said on September 22.

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

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

According to an August 2025 report by Reuters, India has about 44 gigawatts (GW) of renewable projects without supply agreements, which accounts for about 20% of India’s projected renewable energy capacity of 220 GW by March 31, 2025.

Without corresponding demand growth, renewable capacity remains unutilised, a challenge the sector has faced in the past. This remains a persistent problem as India plans to put efforts to increase its renewable capacity without a proper channel to get it used.

“If we add 60 GW next year, will it get sold? Probably not,” Central Electricity Authority (CEA) Chairman Ghanshyam Prasad said while addressing the Bloomberg NEF Summit in New Delhi on August 22, reported Reuters.

He also underscored that the country had suffered from thermal power overcapacity in the past decade as well. Talking about the issues faced including generators facing a loss and some even reporting bankruptcy issues, he stated “Let’s not enter an era of stressed assets again”.

Financial Strain on Discom

This backlog is primarily due to state-run utilities delaying new purchases. The financial strain on power distribution companies (discoms) is a major factor, as many face rising debts and are reluctant to sign long-term power purchase agreements (PPAs) at fixed rates, fearing future price fluctuations.

According to a 2024 Mercom report, discoms owed power generators ₹655.95 billion. Over the years, poor financial management by discoms has hindered the growth of India’s energy sector. Despite numerous bailouts and reform initiatives spanning at least two decades, state-owned utilities remain a burden on the upstream segments of the electricity supply chain, including generation and transmission.