Govt says India's renewable energy sector has entered consolidation phase

Government says renewable sector is transitioning from rapid expansion to a consolidation phase, focusing on grid integration, dispatchable energy, and market reforms

The government on Tuesday said India’s renewable energy sector has entered a phase of consolidation, moving away from rapid capacity expansion towards deeper system reforms, including grid integration, dispatchable clean energy architecture, and market reforms.

 

It said that before proceeding with large-scale bids for renewable projects, enforcement of Renewable Purchase Obligation (RPO), upgrading transmission lines, and using technology for grid integration remain top priorities. This comes amid global headwinds such as supply-chain disruptions, fluctuating module prices, and tighter financing conditions that have slowed commissioning timelines.

 

"India’s clean energy transition is entering a phase where the core challenges are about integration, reliability, and scale efficiency. A temporary flattening of the project pipeline in this context is a mark of maturity," the Ministry of New and Renewable Energy (MNRE) said in a statement, asserting that the country’s renewable energy story has not lost momentum.

   

Focus shifting towards sustainable growth

 

After a decade of record expansion, the focus is now shifting to creating a robust, dispatchable, and resilient clean energy architecture that can support the nation’s ambitious goal of achieving 500 gigawatt (GW) of non-fossil capacity by 2030, the ministry said.

 

"India’s renewable energy capacity has grown more than fivefold, from under 35 GW in 2014 to over 197 GW (excluding large hydro) today. Such exponential growth inevitably reaches a point where the next leap requires not just more megawatts, but deeper system reforms," the ministry said.

 

It added that the country is now dealing with grid integration, energy storage, hybridisation, and market reforms — the foundations for a 500 GW-plus non-fossil future. The recent moderation in capacity addition, it said, is a recalibration — a necessary pause to ensure that future growth is stable and dispatchable.

 

Pipeline remains strong despite global headwinds

 

Over 40 GW of awarded renewable projects are presently in advanced stages of securing Power Purchase Agreements (PPAs), Power Sale Agreements (PSAs), or transmission connectivity. In the current year, Central Renewable Energy Implementing Agencies (REIAs) have bid for 5.6 GW, while state agencies have bid for 3.5 MW.

 

"Additionally, commercial and industrial consumers are likely to add nearly 6 GW of renewable energy capacity in calendar year 2025. Thus, capacity addition of renewable energy is progressing through multiple pathways and not necessarily through REIA-led bids alone," the ministry said.

 

It added that despite the global headwinds slowing commissioning timelines, the country continues to add 15–25 GW of new renewable capacity annually — a rate that remains among the fastest in the world.

 

Policy focus on reliability and domestic capacity

 

The ministry said that over the past two years, policy attention has consciously shifted from pure capacity growth to system design. Tenders for renewable power with energy storage or peak power supply now dominate auctions, signalling a move toward firm and dispatchable green power.

 

"Domestic manufacturing, incentivised through the Production-Linked Incentive (PLI) scheme, Domestic Content Requirement, imposition of duties, implementation of ALMM, and duty exemptions for capital equipment, is reducing import dependency and creating industrial depth," the ministry said.

 

It added that the recalibration of Goods and Services Tax (GST) structures and Approved List of Models and Manufacturers (ALMM) provisions represents a strategic consolidation phase and should not be seen as disruptive. India’s grid is being reimagined through the Rs 2.4-lakh-crore transmission plan for 500 GW, linking renewable-rich states with demand centres.