US withdrawal a setback for global efforts: ReNew CEO Sumant Sinha

ReNew Chairman Sumant Sinha calls the US exit from climate bodies a setback, flags grid delays, PLI challenges and outlines what the renewable sector wants from the Budget

ReNew Chairman and Chief Executive Officer Sumant Sinha believes the latest US withdrawal from global organisations working to address climate change is a setback. The Indian industry is also in talks with the government on demands for compensation for revenue losses due to delays in transmission capacity creation, while the production-linked incentive (PLI) scheme for renewable energy has seen limited uptake, he tells Sudheer Pal Singh in a face-to-face interview. Edited excerpts:

 

What do you make of the latest US withdrawal from 66 global organisations working to address climate change? That list includes the United Nations Framework Convention on Climate Change, the International Renewable Energy Agency, and the International Solar Alliance.

 

It was on the cards for a long time and had already been baked into people’s expectations. This has been the stated position of the current US administration for a while, and everyone knew it was coming. The US did not show up at the Conference of the Parties (COP). It had, de facto, already pulled out of these institutions. Now it has done so more formally — that’s all.

 

What would be its impact?

 

When the world’s largest economy pulls out of anything, it is clearly a setback. It is a setback for climate action, including the scientific work underpinning climate change studies. Several research and measurement organisations in the US have seen their funding cut.

 

The benefit of climate research already carried out in the US will no longer be available. When the largest economy pulls out and does not do enough to curb its carbon emissions, it weakens global efforts.

 

The silver lining is that COP still happened, and the other 192 countries reaffirmed their commitment to tackling climate change.

 

Has the Indian government tackled issues related to the lack of power purchase agreements (PPAs) and grid constraints?

 

There is a strong push from both the government and industry to ramp up renewables. India used to add around 15 gigawatt (Gw) of renewable energy capacity annually three years ago. That rose to 45 Gw last calendar year, and I expect it to increase further to 65–70 Gw soon, as a lot of capacity has been allocated over the past two to three years, and several large players have entered with higher ambition and capital. Lenders are comfortable as well.

 

Execution issues do surface. Distribution companies (discoms) are not signing PPAs as quickly as expected because electricity demand growth has been slower than anticipated, partly due to extended monsoons in 2025. There are also occasional mismatches in the pace of grid buildout, leading to curtailment and revenue losses. If a developer is asked to stop production even when the plant is ready because of grid-level issues, there should be a compensation mechanism. We have done what we were supposed to do.

 

We are discussing this with the government because any generation not undertaken is a direct rupee loss to our bottom line. Ideally, grid buildout should stay ahead of capacity addition, but that is not entirely the case at present. Delays in transmission capacity creation create problems for developers.

 

Could policy planners have foreseen these issues?

 

Foreseeing is one thing; planning and execution are another. Shortfalls can occur at the execution stage. Discoms operate at the state level, while auctions are largely conducted by the Centre. When discoms do not step in to buy power, there is little the central government can do.

 

Grid infrastructure falls under the power ministry, which allocates transmission lines. PPAs, meanwhile, are handled by the renewable energy ministry and its nodal agencies, which award PPAs and enforce timelines, with penalties for delays. These are two separate buckets. When transmission projects are delayed — often due to right-of-way issues — it affects grid readiness.

 

So while planning and bid allocation may be sound, the two buckets need to function in a more synchronised manner. The terms of our PPAs are decided by the Ministry of New and Renewable Energy (MNRE), while grid buildout is overseen by the power ministry. Our demand for compensation due to grid unavailability sits with the power ministry, even though our commercial agreements are with MNRE or its nodal agencies. There needs to be an institutional mechanism to resolve such issues.

 

Do you expect this issue to have long-term implications for the sector’s viability?

 

No. This is not a systemic issue that could derail sentiment. It surfaces intermittently in certain states. When it does, it hurts our bottom line, but it is not structural. At present, it is largely confined to Rajasthan.

 

One area that could become a constraint is grid management. As renewable capacity rises, managing the grid becomes more complex. The Central Electricity Authority is therefore imposing more stringent requirements on renewable energy operators. How these are designed will be critical. If conditions are too strict or if penalties are attached, it could hurt developers. These issues are still under discussion between the stakeholders and the government.

 

Grid management is why batteries are becoming increasingly important. On the PPA side, some issues will ease as state-level bids increase, since states will float bids when demand is clearer. There is also rapid growth in corporate renewable procurement, where companies buy power directly. That is emerging as a sizeable opportunity.

 

What are your top two recommendations for this year’s Budget?

 

In last year’s Budget, the finance minister announced a cleantech manufacturing push. It would help to see more detail on this, particularly on potential subsidies. We also expect greater clarity on the PLI scheme for solar manufacturing. Uptake has been limited because the terms were stringent. By the time companies added capacity, many were unable to meet the PLI requirements.

 

The incentive itself was small — measured in cents per watt. We bid up to wafers, where the benefit was about 0.2 cents per watt. But if Chinese imports are available at prices 5 cents cheaper, that incentive becomes meaningless. The only way to encourage domestic manufacturing is to restrict Chinese imports, which is now being done through the Approved List of Models and Manufacturers (ALMM).

 

However, ALMM for modules came in last year; for cells it will come this year, and for wafers it will only apply from June 2028. All bids awarded until those dates are grandfathered, meaning imports remain allowed. For wafers, that means imports will continue to be permitted until at least 2030. Anyone setting up wafer capacity before then will be undercut by Chinese suppliers, making such investments commercially unviable.

 

Are you saying the timing of the PLI was wrong?

 

It was appropriate to start with, but later adjustments to address domestic supply constraints created a mismatch. Under the PLI scheme, capacity was meant to be set up by 2026, and the government extended this to 2028. However, the incentive window of five years, starting in 2026, was not extended.

 

So if capacity is commissioned in 2028, within the allowed timeline, the company would receive the incentive for only two years. No one will invest in wafer capacity until ALMM restrictions kick in. You cannot compete with China on a 0.2-cent benefit. This is a timing mismatch.

 

What is the update on your own plans to expand solar manufacturing capacity?

 

We currently manufacture 6.5 Gw of modules and 2.5 Gw of cells. Our cell capacity is being expanded to 6.5 Gw and will be commissioned later this year. Around two-thirds of this capacity will be consumed in-house.

 

We also plan to start manufacturing wafers. It will take us until June 2028 — when ALMM comes into effect—to commission a wafer plant. That capacity will also be 6.5 Gw, creating balance across wafers, cells, and modules. This will put us in a strong position, as we will consume most of this capacity ourselves.