MNRE proposes relief package for 45 GW stranded RE capacity

The Ministry of New and Renewable Energy has circulated a draft Office Memorandum proposing a one-time relief package to address delays in signing Power Purchase Agreements (PPAs) for nearly 45 GW of renewable energy (RE) projects that have already received Letters of Award (LoAs).

The proposal follows a meeting held on May 6, 2026, chaired by the Advisor to the Prime Minister and attended by the Secretary of the Ministry of Power and Secretary of MNRE. Officials noted that around 44.8 GW of RE capacity linked to tenders issued since April 2023 remains stranded because PPAs are yet to be executed.

The draft package proposes a series of demand-side measures aimed at encouraging state distribution companies (DISCOMs) and procurement entities to sign Power Sale Agreements (PSAs) and PPAs.

A key proposal is a one-time 100% waiver of inter-state transmission system (ISTS) charges for projects signing PPAs within three months from the communication of the decision. Developers may alternatively choose the existing regulatory waiver framework along with an additional 25% waiver. Projects failing to sign within the prescribed timeline would revert to the phased ISTS waiver mechanism applicable until June 30, 2028.

The draft also proposes deemed compliance with Renewable Purchase Obligations (RPO) and Renewable Consumption Obligations (RCO) for states that have already contracted RE capacity but face project delays due to transmission constraints. The measure is intended to support states such as Rajasthan and Maharashtra, which are currently behind on RCO targets.

To address regulatory delays, the proposal states that tariffs would be deemed approved if State Electricity Regulatory Commissions (SERCs) do not act within 45 days of application. The package also proposes a 90-day closure window for 178 identified cases, with a possible extension of 30 days.

On the supply side, RE developers holding stranded LoAs would be required to select one of three resolution mechanisms.

Under Option I, developers may exit the LoA route while retaining connectivity, provided they obtain a No Objection Certificate from the Renewable Energy Implementing Agency (REIA) and submit land documents or furnish a performance bank guarantee of Rs 10 lakh/MW.

Option II allows developers to surrender both the LoA and transmission connectivity.

Option III, which has been proposed as the default route, permits developers to continue with the LoA under revised timelines. The revised Scheduled Commercial Operation Date (SCOD) would be capped at 24 months from the acceptance intimation issued by the Central Transmission Utility of India Limited (CTUIL). The framework also prescribes milestone extension charges (MEC) for delays related to land documentation, financial closure and commercial operation.

The draft memorandum states that projects without signed PPAs after the facilitation period would be governed by the provisions outlined in a draft order issued by the Central Electricity Regulatory Commission on May 6, 2026.

The featured photograph is for representation only.