The government has directed renewable energy implementing agencies (REIAs) to close all legacy bids and cancel the letters of award for all renewable energy projects for which power purchase and power sale agreements (PPAS/PSAs) are not feasible by November 30, 2025.

The four REIAs – SECI, NTPC, NHPC, and SJVN – together have unsigned PPAs/PSAs for 42 GW of projects.

The agencies have been asked to explore the option of signing PPAs without waiting for PSAs.

Of the total 93 GW of renewable energy capacity tendered by these agencies since 2023-24, PPAs and PSAs have been signed only for 23 GW so far.

At a meeting in October to review the status of renewable energy procurement by REIAs, the Ministry of Power directed the agencies to cease incorporating the greenshoe option, which deviates from the standard bidding guidelines.

The Power Secretary observed that making provision for the greenshoe option is unreasonable, considering that even the base capacities have remained unsold.

The Ministry will amend the bidding guidelines to transfer penalty or damage recoveries from generators to end procurers. Existing guidelines say that in cases of default by developers, penalties, including encashment of the performance bank guarantee, are credited to the Payment Security Fund maintained by the intermediary procurer.

As per the bidding guidelines, only the successful bidder or a special purpose vehicle formed by it is permitted to sign the PPA. The Ministry has not allowed the REIAs to take up specific cases directly with the procurers and the state electricity regulatory commissions.

SECI informed the meeting that it has already cancelled the letters of award for projects where there is no possibility of signing the PSA, except for its manufacturing-linked tender, which has been granted a waiver of interstate transmission system charges.

The Ministry also suggested that SECI undertake a pilot renewable energy project under the bilateral contract settlement mechanism.

Recently, the Ministry of New and Renewable Energy clarified that there will be no blanket cancellation of projects awarded by REIAs where PSAs remain unsigned. Instead, the Ministry will adopt a case-by-case approach, emphasizing grid readiness, transmission capacity, and market reforms to ensure sustainable expansion.

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