“Discussions are underway with both the ministries to facilitate clearances in border regions, particularly near the Pakistan border, where there is significant wind potential,” he said.
Responding to concerns raised by the Wind Independent Power Producers Association (WIPPA) at the event, Renewable Energy Minister Pralhad Joshi said the government is working on resolving the issues through discussions with concerned ministries and government bodies. WIPPA President Parag Sharma flagged four issues, including Deviation Settlement Mechanism (DSM) penalties, curtailment, transmission delays, Inter-State Transmission System (ISTS) risks, and limited wind tenders.
Recent Central Electricity Regulatory Commission (CERC) amendments have tightened penalty bands, leading to a doubling of DSM penalties, which has significantly impacted project returns. “The situation is expected to worsen further with the introduction of additional factors in the coming years, potentially increasing penalties up to eight times by FY32,” Sharma said. These changes are being applied to already commissioned projects, which did not factor these costs into their tariffs, he added.
Moreover, poor quality of weather forecasts in India is posing a challenge to shifting to stricter DSM norms. “In Germany, weather forecasts are updated 24 times a day, compared to two to three times in India. Unless these systemic improvements are made, transitioning to stricter DSM norms will be challenging,” Sharma said.
The industry also highlighted that grid curtailment has emerged as a major challenge, particularly due to delays in transmission infrastructure. “While earlier the Power Ministry and Central Transmission Utility had assured that new transmission lines would resolve the issue within three to four months, curtailment has actually increased due to new capacity coming online faster than transmission expansion,” Sharma said.
Addressing industry leaders, Joshi said MNRE is in discussions with the Power Ministry to ensure that the DSM rules are not applied retrospectively. He said: “Discussions are ongoing with the Ministry of Power to arrive at a balanced and rational solution.”
He also noted that the Power Ministry is currently spending nearly Rs 30 crore per day on security-constrained unit commitment (SCUC) to maintain grid stability. “The amount is actually sustaining thermal power generation even when low-cost renewable power is available. These resources should instead be redirected towards structural solutions such as battery storage, grid-forming inverters, and transmission upgrades,” he added.
Sharma said cost reductions through a goods and services tax (GST) rate cut on wind turbines have been partially offset due to the push for domestic manufacturing under the Approved List of Models and Manufacturers (ALMM) framework.
India is targeting 100 GW of wind power capacity by 2030 and 156 GW by 2036. To meet this target, there is a need to install more than 10 GW of wind capacity annually, Sarangi said. However, in FY26, wind capacity addition stood marginally above 6 GW due to strong bidding in 2023 and 2024, with volumes of 57 GW and 71 GW, respectively. “This has dropped sharply to around 20 GW last year. Currently, about 28 GW is under construction, which will support growth for the next couple of years. But without sustained bidding, the sector risks slowing down,” Sharma said.
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