The minister says he will soon begin meeting state governments in person to help resolve the long-pending issue.
The central government is prioritising the resolution of power purchase agreement (PPA) challenges with states, Union Minister for New and Renewable Energy Pralhad Venkatesh Joshi said on Monday.
“We are serious about resolving the PPA issue. Since taking charge in June, I have already held one round of discussions with the states, and the second round will begin very soon. I intend to meet state governments personally to convince them,” Joshi said, addressing the Sixth Energy Conference and Exhibition organised by the apex industry chamber CII in New Delhi.
He noted that several states have been holding off on signing PPAs, anticipating further reductions in solar and wind tariffs in upcoming bids.
“We are doing our best to persuade them not to keep postponing decisions. If you act today, the industry will come forward with investment proposals. What does it take to attract investment? Beyond law and order, water and land, it is power, and that lies with you,” Joshi added.
The delay in signing PPAs has led to financing hurdles for developers, with concerns over payment risks from state distribution companies (discoms). Despite central tenders, procurement timelines and priorities remain misaligned across states. Without signed PPAs, awarded projects cannot reach financial closure or begin construction, resulting in nearly 40 GW of renewable capacity being stalled nationwide.
To address the issue, the centre is considering rebidding stranded capacity to revive investor interest. The Central Electricity Regulatory Commission (CERC) is also finalising guidelines for Virtual Power Purchase Agreements, aimed at offering more flexible procurement options for commercial and industrial consumers. New tenders increasingly include storage components to improve bankability and address intermittency.
-Manish Pant