Navigating RE glut: Thermal power major NTPC to buy unsold green energy

To absorb power from projects that failed to find any state to sign power purchase agreements

NTPC, renewable energy, Green energy — Peaking or balancing power as the name suggests helps during sudden demand peaks when base power such as coal cannot be scaled up suddenly

4 min read Last Updated : Apr 17 2025 | 12:04 AM IST

India’s largest power generator NTPC Limited, which is also a renewable energy implementation agency (REIA), is providing a unique solution to renewable energy projects which have failed to find buyers for their electricity.

NTPC has proposed to RE project developers that it will buy power from projects which NTPC tendered as REIA and have failed to get any state to sign power purchase agreements (PPAs). REIAs are responsible for tendering RE capacity, finding buyers for the projects, and facilitating sale and purchase of RE power while earning a trading margin. SECI, NHPC and SJVN are other designated REIAs by the ministry of new and renewable energy (MNRE).

Company executives said that NTPC — as an REIA — issued tenders worth 25 Gw during the last two years, out of which close to 15 Gw is yet to find takers. This is because states continue to be reluctant to sign PPAs. Senior executives said that rather than hunting for PPAs, NTPC will now buy power from these projects at a standard rate of ₹2.8 per unit.

“We have multiple plans on how to sell this RE power. Foremost is selling it in the merchant market where the rates would invariably be higher, especially during the high demand months. The other option is selling to the commercial and industrial (C&I) segment. It is an upcoming segment where demand for green power is rising and would drive up bulk RE demand,” said a senior executive.

NTPC would not be able to earn the trading margin which it would get through a PPA with a state. It hopes the price which it sells to the merchant market and/or C&I would make up for it. The trading margin for REIAs is ₹0.07 per unit that is included in the final tariff. This is the rate a REIA sells to a buyer under a PPA. NTPC has a long-term plan wherein it will blend the RE from these projects with energy storage solutions and offer it as peaking power during high demand days.

Peaking or balancing power as the name suggests helps during sudden demand peaks when base power such as coal cannot be scaled up suddenly.

This paper recently reported that close to 40 Gw of RE projects tendered by the four REIAs have failed to find buyers for their green power. These projects, awarded by RE tendering nodal agency SECI and NTPC, NHPC, and SJVN, are pending. This is because no state has come forward to sign power sale agreements (PSAs), according to a presentation at an MNRE review meeting. Among the four, SECI and NTPC have the highest number of RE bids — 12 Gw each — awaiting PPAs or PSAs. NHPC and SJVN each have 8 Gw of pending RE projects.

During the review meeting, stakeholders and officials said that lack of demand from states is the key reason for the delays. Delay in concluding tenders may stall investments in the RE sector. Recently, the Central Electricity Regulatory Commission, the quasi-judicial apex sector regulator, rejected the tariff discovered in the first-ever grid-scale battery energy storage system (BESS) offered by SECI in 2022.

CERC cited the “delay in signing PSAs and PPAs” and the reduction in BESS prices over the past two years as the reason for rejecting the tariff.

JSW Energy, which won the tender, is now contesting the decision in higher courts.

Delay in signing PSAs and PPAs for SECI’s awarded projects is also the reason behind the controversy involving the Adani group’s alleged bribery case under investigation in the US.

The US Department of Justice had alleged that the Adani Group is involved in a $250 million bribery case for solar projects.