As the Indian renewable energy sector grows and matures, there is increasing demand from consumers – both utilities and corporates – for firm renewable energy that matches their load requirements. This has led to a massive surge in the deployment of battery energy storage systems (BESSs) as well as firm and despatchable renewable energy (FDRE) projects by developers. Further, the rapidly expanding renewables sector, along with policy impetus, has made domestic manufacturing a priority, prompting developers to also now become equipment producers. In line with these trends, the Avaada Group, which started as a solar and wind energy development firm, has now forayed into the energy storage, green hydrogen and FDRE segments, with major deployments under way. In addition, the company has ventured into the manufacturing of solar equipment to secure its supply chains from disruptions. In an interview with Renewable Watch, Kishor Nair, Chief Executive Officer, Avaada Energy, shared his perspective on the key positives as well as gaps in the Indian renewable energy sector. He also talked about the company’s key achievements and plans in the energy storage space. Excerpts….
What have been the key hits and misses in the Indian renewable energy sector over the past year?
India’s renewable energy sector recorded strong momentum over the past year, supported by record capacity additions, rapid adoption of distributed solar and a significant scale-up in domestic manufacturing. The total installed renewable energy capacity crossed 250 GW by October 2025, driven primarily by accelerated solar and wind deployments. Rooftop and off-grid solar continued to grow, improving energy access and supporting decentralised energy solutions.
Domestic manufacturing advanced significantly, aided by the production-linked incentive (PLI) scheme for high-efficiency solar modules, which enabled the commissioning and expansion of integrated polysilicon-to-module facilities. Quality and supply chain reliability were further strengthened through the Approved List of Models and Manufacturers (ALMM) framework, reinforcing standards for modules used in government and open access projects, and through the Approved List of Cell Manufacturers mechanism, which standardised compliance for solar and proposed ALMM-Wind for critical components in wind and hybrid systems. These initiatives collectively improved India’s manufacturing depth and reduced import dependence.
Supportive policies, including the interstate transmission system (ISTS) waiver, rising volumes of hybrid, round-the-clock (RTC) and storage-linked tenders, and early traction in green hydrogen, continued to enhance market viability and sectoral diversification.
Despite this progress, challenges persist. Tender under-subscription, power purchase agreement (PPA) delays, grid stability concerns and inadequate storage highlight vulnerabilities in the development pipeline. Transmission constraints and land availability issues continue to slow execution. Strengthening grid readiness, accelerating transmission build-out and refining policy design remain essential for India to stay aligned with its 2030 renewable energy targets.
What have been the key achievements of the company over the past year?
The Honourable Prime Minister Narendra Modi laid the foundation stone for Avaada’s landmark project – India’s largest 2,500 MWh BESS coupled with 1,560 MWp of solar capacity. The prime minister also inaugurated Avaada’s 282 MWp solar project in Rajasthan, strengthening the nation’s transition towards reliable green power.
In addition, the Avaada Group signed a Rs 360 billion MoU with the Gujarat government, with plans to set up 5 GW of solar, 1 GW of wind and 5 GWh of BESS projects. The company also signed a Rs 50 billion MoU with the Bihar government to develop renewable energy projects.
What are the company’s plans in the energy storage space?
The Avaada Group is at the forefront of the green energy revolution, with ambitious plans to lead in the energy storage segments. We recognise the critical role of storage in ensuring grid reliability and stability and in accelerating renewable energy adoption. Our strategy includes investments in next-generation battery technologies and pumped storage projects (PSPs). We have recently signed an MoU with the Rajasthan government to develop a 1,200 MW PSP in the state. We have also signed MoUs with the Maharashtra and Uttar Pradesh governments to set up PSPs in these states. Avaada has targeted 11,000 MW of projects in the PSP space and 16 GWh in the BESS space. These initiatives will address intermittency challenges and provide robust solutions for grid stabilisation, enabling round-the-clock green energy supply.
Avaada’s holistic approach to integrating green fuels and energy storage underscores our vision of building a resilient, low-carbon energy ecosystem that supports India’s net-zero ambitions.
What is your view on the recent bidding activity and tariffs in the energy storage and FDRE spaces?
The market is witnessing a significant surge in standalone BESS, with strong participation seen in recent FDRE bids. Tariffs are becoming increasingly competitive, as reflected in viability gap funding (VGF)-backed auctions, where highly aggressive capacity charges are being discovered.
Policy support is further strengthening the business case for storage, with the government extending the ISTS charge waiver for specific co-located storage projects until June 2028, substantially reducing transmission-related costs and enhancing overall project viability. Additionally, the emergence of competitive tariffs even in non-VGF standalone storage projects signals growing confidence in the commercial maturity of the sector. The rise in FDRE tenders underscores the increasing recognition among utilities of the need for despatchable clean energy – shifting the focus from merely “green power” to “reliable green power” – to support grid stability and firm supply.
However, a word of caution is warranted. Over-aggressive bidding and overly optimistic assumptions regarding future declines in BESS costs could lead to financial stress and eventual stagnation in storage capacity addition. If discovered tariffs fail to align with realistic cost trajectories, several awarded projects may become unviable and ultimately not reach commissioning. This may not only undermine investor confidence but also slow down the sector’s growth trajectory at a critical stage of market development.
What are the major bottlenecks from a developer’s point of view? Do you think India will be successful in achieving its 2030 targets?
From a developer’s perspective, the key bottlenecks in India’s renewable energy sector continue to be delays in transmission infrastructure and connectivity approvals, followed closely by persistent land acquisition and permitting challenges, especially in high-potential states such as Rajasthan and Gujarat. Developers also face PPA bankability concerns driven by discom payment delays, non-approval of signed PPAs/power sale agreements (PSAs) by the state commission or backtracking on the signed PPA/PSA, and curtailment risks, which complicate cost forecasting.
The renewable energy sector in India faces several challenges that require immediate attention. Unhealthy competition due to no technical qualification criteria has strained project margins, while supply chain disruptions, including module shortages and rising prices of key commodities such as steel, copper and aluminium, along with high wind turbine costs driven by geopolitical factors, are pressing concerns. Additionally, issues related to large-scale land acquisition and right of way pose significant logistical and financial hurdles. The high cost of capital further impacts project returns by limiting reductions in interest rates. Grid stability is another critical issue as the growing integration of renewable energy into the power system creates new challenges.
The Pending signing of PPAs by renewable energy implementing agencies (REIAs) with state discoms is a big concern for developers, as the delay jeopardises the sanctity of the bid process. New bids are called regularly, but developers remain uncertain about when the PPA will be signed. The staggered timeline for the levy of ISTS charges is also a concern, as discoms are wary of these charges inflating the overall landed cost of power. There is an urgent need for the Ministry of New and Renewable Energy, REIAs and state discoms to jointly form a strategy for calling bids with a pre-defined timeline to sign contracts; otherwise, the call for bids may be reduced until the current pendency gets resolved.
Further, clarity is required on the extension of the automatic ISTS charges waiver for projects that are delayed due to the non-availability of connectivity. This waiver has facilitated large-scale capacity addition of solar and wind projects. Its absence should not impact overall capacity expansion, especially when annual installations of more than 60 GW are required to meet the 500 GW renewable energy target.
