India’s Power Sale Agreement Hold-Up: Fixing a Renewable Energy Bottleneck

One of the major deterrents to the development of new solar and wind projects is delays in signing power sale agreements by distribution companies. Intermediary procurers, such as the Solar Energy Corporation of India, sign power purchase agreements with developers well before the signing of PSAs with discoms. In recent years, however, intermediary procurers have been struggling to find end buyers. This is because the state utilities have been reluctant to sign PSAs and PPAs, anticipating a further reduction in tariffs.

Further, state-owned discoms remain far behind on their renewable purchase obligations set by the central government due to technical and economic challenges. The Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research’s latest report titled “India’s Power Sale Agreement Hold-Up: Fixing a Renewable Energy Bottleneck”, presents the reasons for delays in signing PSAs and suggests potential solutions that could improve the pace of renewable energy development in India.

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