Built or Awarded, but Not Contracted: The Renewable Sector's Buyer Problem

The 44.8 GW Stranded Allocation & Contract Logjam

India has awarded large volumes of renewable capacity in auctions run by central agencies. For a project to be built and paid for, a distribution company usually has to sign a power purchase agreement. IEEFA's key findings report that the Ministry of New and Renewable Energy "proposed a one-time, no-subsidy package for about 44.8GW of renewable capacity that has award letters but no signed PPAs". We have not seen the proposal itself, so we cannot describe its terms. What can be said is the scale: 44.8 GW is more than the roughly 13.9 GW of renewables installed in the whole of April-June 2026.

Why contracts are not signed: Our sources do not give reasons. Common explanations discussed in the sector include distribution companies' concern about committing to long-term tariffs, limits on grid connections, and uncertainty about demand. We present these as possible explanations only, not as findings of the reports we reviewed.

Curtailment Volumes & The Daytime Generation Imbalance

Curtailment: CREA reported that about 1,835 million units of renewable output were curtailed in July and August 2026, including 1,462 million units of solar and 373 million units of wind. Curtailment means generation that was available but not used, usually because the grid could not absorb it or it was instructed to reduce. The figure is small against the quarter's 101 billion units of non-hydro renewable generation, at under 2% by our arithmetic if the two figures are comparable, though CREA's curtailment covers two months and the generation covers three. The comparison is therefore only rough. For a developer, curtailment can mean lost revenue unless contracts compensate for it.

Daytime surplus and evening need: CREA noted that the daily peak fell in solar hours on 62 of 92 days. Solar reached a daily record of 705 million units on 30 September. That is a sign of a system with a lot of daytime supply, and of the value of storage, which we discuss in the previous pieces. It is also a sign that the incentive to sign contracts for more daytime-only solar may be weakening in some states, while contracts for round-the-clock or evening supply are more attractive. That is our inference and not a finding from the reports.

“Winning an auction is not the same as selling power.”

Potential Terms of the MNRE No-Subsidy Package

What a no-subsidy package might involve: We do not know. In general terms, a package that offers no subsidy might change contract terms, allow capacity to be sold to other buyers, or extend deadlines. That is speculation. Readers should read the proposal when it is published.

Guide to Reading Renewable Pipeline Claims

How to read a pipeline headline: our guide: 1. Ask whether capacity has a buyer. A signed power purchase agreement is the basis for finance. 2. Check the deadlines. Award letters can lapse. 3. Look at curtailment. It shows whether the grid can absorb what is built. 4. Separate daytime from round-the-clock. The products are valued differently. 5. Watch the regulator. Rules on curtailment compensation and open access affect economics.

Implications for Developers, Buyers, Transmission & Risk Scenarios

What it means for developers: Developers with unsigned capacity face financing and deadline risks. Those with firm contracts and a storage component are better placed. Diversifying buyers, including commercial and industrial customers, is a way to reduce dependence on distribution companies.

What it means for large power users: Companies that buy electricity at scale may find developers keen to sell to them directly. Terms vary, and legal and regulatory advice is important. We offer no recommendation.

What it means for the wider system: The combination of unsigned capacity and curtailed output points to the grid and the contract system as the bottleneck, not the technology of generation.

What we do not know: We do not know the terms of the proposal, the reasons contracts remain unsigned, or how the 44.8 GW is distributed across states and developers.

Three scenarios for a developer (ours, not a forecast): In the first scenario, the proposal gives unsigned projects a workable path and most of the capacity reaches contract within a year. In the second, only part of the capacity proceeds, and the rest lapses or is renegotiated. In the third, delays continue and financing becomes harder for the sector as a whole. A developer planning cash and construction schedules should know which scenario its own projects fall into and what it would do in each. A lender or investor should ask the same question of every borrower, because the answer depends on contract status, location and the quality of the buyer, not on the national average.

Why the grid is part of the answer: Transmission lines, substations and storage determine how much generation the system can use. Capacity built where the grid is weak will be curtailed more often. A project in a region with spare transmission and strong demand is a different risk from one far from load. National totals blur this, which is why local detail matters.