In an interview with Renewable Watch, Deepak Thakur, Managing Director and CEO, Mahindra Susten, talks about the company’s key developments over the past year, current portfolio and change in business strategy over the years. He also highlights the key challenges in the renewable energy sector and gives suggestions to address them. Edited excerpts…
What is the company’s business model and how has it evolved over the years?
Mahindra Susten is the cleantech arm of the Mahindra Group. Over the past three years, there has been a shift in Susten’s strategy, wherein it discontinued its third-party EPC business (emerging risk-reward skew did not match with the company’s thresholds) and pivoted completely to a build-own-operate or independent power producer (IPP) model. This shift towards a pure IPP player entailed the onboarding of a like-minded strategic investor, Ontario Teachers’ Pension Plan (OTPP), which acquired a 39.99 per cent stake in Mahindra Susten.
With the commitment from both shareholders (Mahindra Group and OTPP), Mahindra Susten plans to develop an over 5,400 MWp renewable energy portfolio by FY2027. Along with solar, Susten will now develop solar-wind hybrid and energy storage projects.
Our InvIT journey, from concept to listing, showcased the agility that defines Mahindra Susten. As the first InvIT in India’s renewable energy industry, we quietly executed while others contemplated similar structures, creating a pathway that optimises value for investors. Listed in January 2024, we have already flipped over 1.54 GW of assets into the InvIT, establishing Sustainable Energy Infra Trust with other marquee investors alongside Susten and OTPP.
What is the current portfolio of Mahindra Susten? What range of services does it offer?
We have a 3.6 GWp project portfolio under various stages of development, spread across four states, with approximately 2.5 GWp tied to central offtake. At Susten, we focus on building high-quality renewable energy plants, offering competitively priced, firm and schedulable renewable power. These investment-ready assets, post the statutory operating period and COD, can be flipped by Susten. In addition to providing stable revenue flows, they are high-performing renewable energy projects with best-in-class ESG compliance.
Please share a case study of one of your projects.
One of our most interesting projects is India’s first 24×7 solar-powered village in Modhera. The solarisation of Modhera Sun Temple and town is a landmark project that brings to life the prime minister’s vision of transforming Modhera into a self-sustaining, energy-resilient model town powered entirely by solar energy. The project was commissioned in 2022.
At the heart of this initiative is a 6 MW solar PV plant, complemented by 15 MWh of battery storage, ensuring round-the-clock renewable energy supply. Key components include a 50 kW solar carport, electric vehicle (EV) charging stations, 1,800 smart meters, and rooftop solar installations across government buildings and 271 residential homes. Smart technologies such as sensor-based street lighting and solar-powered EV charging further enhance the town’s sustainability.
By aligning solar generation with peak energy demand, the project enables Modhera to export surplus power to the grid in the afternoon while seamlessly meeting evening consumption through battery storage. This transition has made Modhera India’s first village to run entirely on solar energy 24×7, reducing electricity bills by up to 100 per cent, cutting carbon emissions and promoting EV adoption.
Recognised globally, Modhera has been visited by the UN Secretary-General and G20 delegates, positioning it as a model for clean energy adoption and sustainable tourism in India.
And importantly, it is a proof of concept for showcasing the ability of storage solutions to provide firm and round-the-clock power rather than just serving the peak load.
What have been Mahindra Susten’s business highlights in the past year?
In April 2023, we won our first bid as Susten 2.0, securing 280 MWp in the GUVNL tender. In October 2023, we ventured into the hybrid renewables domain by finalising a 170 MWp project for commercial and industrial off-takers and signed a term sheet with Mahindra group companies for close to 50 per cent of the generated power. We also listed the InvIT in record time in January 2024 and transferred 1.54 GWp of assets. In May 2024, our Mahindra Susten Centre of Excellence (CoE) achieved a five-star rating awarded by Skill India under the Ministry of New and Renewable Energy. At this CoE, so far, we have trained 4,700 people in solar technology, over 140 girls in the Surya Shakti programme and over 10,000 people in semi-skilled trades. In December 2024, we targeted to reach 5.4 GWp as per the original plan to grow at 5x and achieved 60 per cent of our portfolio target in terms of capacity won, placing us among the top 10 IPPs in India for capacity won in 2024. In January 2025, our SBTi targets were approved, and Mahindra Susten joined an elite group of just three IPP companies in the renewable energy sector to achieve this recognition. It has been an exhilarating year at Susten, with achievements across the entire value chain of our business.
What are the key challenges faced by the company in the renewable energy market? What are your suggestions for addressing them?
One of the largest concerns across the industry currently is delays in the execution of power purchase agreements (PPAs) for awarded capacity. As per industry estimates, only 15-20 per cent of PPAs have been signed and around 45-55 GW of capacity is still awaiting PPAs execution. With around 50 GW planned for annual bidding by the government, we need to see a flow of new tenders in this fiscal while this PPA backlog exists.
Key suggestions include a uniform national renewable energy tariff with blended tariffs across PPAs to disincentivise delays in PPA signing owing to an expected decrease in tariffs. Further, strict adherence to renewable purchase obligations (RPOs) with strict penalties for non-compliance is necessary. From a long-term perspective, the contract for the deviation mechanism could be implemented by renewable energy implementing agencies.
Another key challenge is the lengthy process for allotting government land for renewable energy projects. The current land allotment process is protracted, often taking 12-16 months, significantly delaying project execution. Often, project timelines are extended, leading to financial losses, penalties and reduced investor confidence. Different compliance requirements and processes across different states further intensify the complexity of this task.
To address this, one of the key suggestions is decentralising the authority to grant stamp duty waivers, entrusting district collectors with the responsibility of faster resolution. Another suggestion is empowering district-level authorities to expedite land allotment processes based on recommendations from the state’s renewable energy corporations and local revenue departments. Further, a state-wise land acquisition playbook should be hosted online with links to district-level task forces to expedite land approvals at the tehsil level.
There are also concerns about the availability of evacuation infrastructure to support the huge quantum of projects expected to come online in the next two to three years. To match project timelines, the pace of transmission evacuation works needs to be doubled.
Going forward, the addition of interstate transmission system (ISTS) substation capacity needs to be accelerated, especially in resource-rich states, to accommodate the growing demand for renewable energy evacuation. Furthermore, HVAC and ISTS transmission system construction timelines need to be aligned with renewable energy project schedules, particularly for ISTS systems linked to HVDC, operational by 2029.
While the Approved List of Models and Manufacturers (ALMM) indicates around 37 GW of manufacturing capacity in India, there needs to be an objective on-ground assessment about how much of this capacity is really despatchable and available by the end of December 2025. India’s PV cell manufacturing capacity is just over 8 GW, far less than the annual solar demand. There is need for an exponential increase in capacity over the next one to two years.
Lastly, the renewable energy industry faces a significant skill gap of around 1.2 million workers, with demand expected to rise by 26 per cent, creating a need for 1.7 million skilled workers by 2027. This gap exists at all levels, particularly in emerging technologies such as cell manufacturing, battery storage and advanced grid integration. The industry is experiencing nearly 20 per cent attrition of talented workers annually, posing a risk to both production and operational plans.
In the EPC sector, the challenge lies in finding skilled engineers and technicians who can handle the complexities of project design, procurement and construction management. On the O&M side, the need is for technicians and engineers who can ensure the efficient and reliable operation of renewable energy assets over their lifecycle.
To address these challenges, it is crucial to establish green skilling centres of excellence that offer comprehensive courses aligned with the specific skill requirements for each job family within the renewable energy sector. These centres should focus on both freshers and the reskilling of professionals from carbon-intensive industries impacted by the green transition.
Additionally, leveraging global partnerships can help bridge the skill gap by bringing in expertise and best practices from around the world. The government’s proposal in 2024 to support upskilling and relax visa restrictions on foreign technicians is a step in the right direction, as it can help mitigate the immediate shortage of skilled workers.
Facilitating job matching through the creation of a portal for “green jobs” certification and job postings can also ensure that trainees are linked with the right job opportunities. This approach will help align the workforce with the evolving needs of the renewable energy industry, ensuring a steady supply of skilled workers for both EPC and O&M roles.
Could you elaborate on the challenges that exist in India’s renewable energy tendering and PPA process?
The renewable energy sector in India is facing multiple interconnected challenges that are threatening the country’s ambitious clean energy targets. The current tendering process suffers from fundamental misalignments between grid connectivity requirements and PPA timelines, with no defined schedule for tariff adoption, PSA sign-ups and regulatory clearances, leaving some projects in limbo for over a year while their economics deteriorate. Although the bidding mechanism functions well, frequent mid-game rule changes are deterring serious long-term investors who require consistency for strategic planning. A massive backlog of unsigned PPAs has developed primarily because discoms, which must ultimately purchase the power through PSAs with renewable energy implementing agencies, are hesitant to commit when they see progressively lower prices in successive tenders from different agencies. This hesitation has created a system-wide bottleneck whereby fewer new tenders are being issued and existing ones are progressing slowly. The situation is further complicated by the upcoming expiration of the ISTS waiver in June 2025, which will increase costs for projects without PPAs while projects commissioned after June 2026 will lose half their subsidies. This will make discoms even less likely to sign agreements and potentially create a cascading crisis affecting manufacturers with PLI investments, their ability to service debt and ultimately the banking sector, threatening to render dozens of gigawatts of renewable projects unviable.
What challenges do you face with forecasting and scheduling of renewable energy generation?
Forecasting has become increasingly difficult due to climate change. Wind patterns have changed, directions and intensities are different, and traditional seasonal patterns are in transition. Despite technological advances in algorithms and AI, accurate forecasting remains extremely challenging. For each project, we conduct 25-year climate research studies, not just because lenders require it, but because it is essential to our planning. Going forward, we need better coordination between developers, the government, technology companies and academia to improve forecasting capabilities. The current radar infrastructure in India is insufficient and the coverage is lacking in key areas, and satellite data is too high-level for detailed assessment. This is becoming a competitive advantage for developers – the ability to better project yields and manage day-ahead forecasting versus actual generation.
What are your thoughts on penalties for deviation from scheduled generation?
While I agree that inefficient operations should incur penalties, the current approach is problematic. The question is, what constitutes a reasonable band of acceptable deviation? Currently, the system penalises developers even when deviations are practically unavoidable. Simply making developers less profitable does not solve the fundamental problem of grid stability. We should explore alternative mechanisms such as reactive power compensation, battery storage integrated into transmission systems (as done in Australia, the UK and the US), or allowing developers to include storage components in their projects. The objective should be grid stability, not just penalising developers. Ironically, the current regulations penalise both under-generation and over-generation, creating a challenging operating environment. If developers could store excess generation and supply it during non-sunny or non-windy hours, perhaps with an incremental tariff structure, it would benefit both the grid and developers, while increasing overall grid utilisation to 30-35 per cent.
What is your perspective on India’s policy environment for the renewable energy sector? What additional policy measures are needed to drive sector growth?
India has already laid a strong foundation with its comprehensive policy frameworks, achieving significant success through policy initiatives. Key demand-side policy enablers include the PM Surya Ghar Muft Bijli Yojana, the ISTS charge waiver, green open access rules and RPOs. Supply-side policy enablers comprise PPA-based tenders, “must-run” status for renewables, renewable energy zones/solar park schemes, launch of green day-ahead and green term-ahead markets, CPSU generation schemes and PM-KUSUM, among others. Further, policy action taken to facilitate cohesive ecosystem development includes the Green Energy Corridor Scheme, National Green Hydrogen Mission, PLI scheme for solar PV and ACC batteries, and Late Payment Surcharge Rules.
To prepare the nation for energy transition and provide a fillip to the sector, the following policy measures can be taken:
- Optimising storage capacity size by expanding wind capacity, de-bottlenecking evacuation infrastructure through substation augmentation with storage and offering financial incentives for solar project developers to share evacuation infrastructure.
- Developing a green energy merchant market by adopting real-time and time-of-day pricing mechanisms to enhance demand optimisation and grid stability.
- Establishing a national-level body to accelerate pumped storage project approvals, providing a standardised framework and single-window clearance for developers.
- Attracting global investment in India’s renewable energy sector through government-led engagement with development finance institutions to raise awareness of market opportunities.
- Catalysing the green hydrogen ecosystem by strengthening government-to-government (G2G) collaborations to secure green hydrogen offtake agreements with net-importing nations such as Japan, South Korea and the EU. Building a resilient domestic manufacturing ecosystem for electrolyser components to enhance self-sufficiency. Expanding research and development efforts to reduce reliance on non-local rare-earth metals and advance membrane technology development.
- Proactively planning transmission infrastructure and designated green hydrogen hubs to support large-scale deployment.
- Establishing globally harmonised green hydrogen standards to facilitate seamless exports and market
integration. - Expediting industrial decarbonisation by establishing clear standards and a certification framework for what constitutes “green” and creating a critical anchor set of off-takers via G2G collaborations with mandates for public infrastructure projects.
