Rating agency ICRA has said that electricity grid and energy storage readiness will drive the next phase of renewable energy growth, while the aggressive BESS bidding will keep a tab on project economics. According to ICRA, renewable energy, including large hydro, will contribute over 35 per cent of total power generation by 2029-30, rising from 22 per cent in 2024-25. It noted the bidding activity has witnessed a slowdown amid challenges in the signing of the power purchase agreements (PPA) and power sale agreements (PSA), as well as delays in ramp-up of the transmission capacity. However, the renewable power pipeline remains healthy with more than 150 GW of projects under construction as on June 30, 2026, which are likely to drive capacity additions over the near to medium term.
As the transmission infrastructure has lagged the growth in generation capacity, there have been issues pertaining to curtailments, especially for projects running on temporary general network access (T-GNA). Thus, timely completion of transmission projects and the scale-up of storage capacity remain critical to sustaining the pace of capacity addition. It said increasing the share of generation from the renewable energy capacity is contingent on the extent of implementation of the ongoing project pipeline (where the projects are bid out and the PPAs are signed), development of adequate transmission connectivity infrastructure and timely bidding for new RE projects, along with signing of the PPAs by central nodal agencies.
After 40.6 GW of RE capacity was awarded in 2024-25, the bidding activity slumped with only 14.7 GW capacity awarded in 2025-26 and the same continued in the current year with 4.7 GW awards till August 10, 2026. Further, the unsigned PPA capacity remained sizeable at 40-45 GW as of April 2026. Girishkumar Kadam, Senior Vice President & Group Head - Corporate Ratings, ICRA, said ‘While the bidding activity has moderated, a notable feature is a decline in the bids for normal solar and wind and more focus on firm and dispatchable renewable energy (FDRE) and round-the-clock (RTC) power.’
