India's renewable energy sector is entering a transformative new phase, shifting from rapid capacity addition to building strength, stability, and depth of systems, according to the Ministry of New and Renewable Energy (MNRE). After a decade of record expansion, the focus is now moving toward creating a robust, dispatchable, and resilient clean energy architecture that can support the nation's ambitious goal of achieving 500 GW of non-fossil capacity by 2030.

The MNRE emphasizes that India's renewable growth story remains one of the fastest and most forward-looking in the world, evolving from speed to system strength, from quantity to quality, and from expansion to enduring integration.

Dramatic Growth and Strategic Recalibration

In the last decade, India's renewable energy capacity has grown more than fivefold, from under 35 GW in 2014 to over 197 GW (excluding large hydro) today. The sector has now entered a phase where the focus is shifting from capacity expansion to capacity absorption, dealing with grid integration, energy storage, hybridization, and market reforms as the foundations for a 500 GW-plus non-fossil future.

The recent moderation in capacity addition represents a recalibration, described as a necessary pause to ensure that future growth is stable, dispatchable, and resilient. Over 40 GW of awarded renewable projects are presently in advanced stages of securing PPAs, PSAs, or transmission connectivity, reflecting the sector's robust pipeline of committed investment. India's renewable market has outpaced the pace of its grid and contractual institutions, a challenge common to all countries undergoing large-scale energy transitions.

In this context, enforcement of Renewable Power Purchase Obligation by states and DISCOMs, upgrading transmission lines for power evacuation, and using technology for grid integration remain top priorities before proceeding with large-scale bids for renewable energy.

Multiple Pathways for Capacity Addition

In the current year, Central Renewable Energy Implementing agencies (REIAs) have conducted bids for 5.6 GW, while State agencies have done bids for 3.5 MW. Additionally, Commercial and Industrial Consumers are likely to add nearly 6 GW of renewable energy capacity in calendar year 2025. This demonstrates that capacity addition of renewable energy is progressing through multiple pathways and not necessarily through REIA-led bids alone.

Global headwinds have also played a role, with supply-chain disruptions, fluctuating module prices, and tighter financing conditions slowing commissioning timelines. Despite these challenges, India continues to add 15-25 GW of new renewable capacity annually, a rate that remains among the fastest in the world.

Policy Focus Shifts to System Design

Over the past two years, policy attention has consciously shifted from pure capacity growth to system design. Tenders for renewable energy power with energy storage or peak power supply now dominate auctions, signaling a move toward firm and dispatchable green power. Battery Energy Storage Systems (BESS) are being integrated at both grid and project levels, marking the emergence of a new market.

Domestic manufacturing, incentivized through the Production-Linked Incentive (PLI) scheme, Domestic Content Requirement, imposition of duties, implementation of ALMM, and duty exemptions for capital equipment, is reducing import dependency and creating industrial depth. The recalibration of GST structures and ALMM provisions represents a strategic consolidation phase, aligning fiscal policy with the twin objectives of domestic value chain depth and technology assurance.

These adjustments are designed to stabilize costs, enhance module reliability, and promote scale efficiencies in India's maturing solar manufacturing ecosystem. The trajectory of battery storage deployment is advancing through viability gap-funded projects, sovereign tenders, and emerging storage obligations, establishing the foundation for firm, dispatchable renewable capacity. These measures signal a shift from expansion-led growth to a more resilient, quality-driven, and system-integrated renewable energy architecture.

Transmission Infrastructure Revolution

Transmission has emerged as the new frontier, with India's grid being reimagined through the INR 2.4 lakh crore Transmission Plan for 500 GW, linking renewable-rich states with demand centers. The Government is prioritizing investment in transmission infrastructure through the Green Energy Corridors and new high-capacity transmission lines from Rajasthan, Gujarat, and Ladakh.

Once operational, these projects will unlock over 200 GW of new renewable capacity. The Government has already planned for building HVDC corridors and boosting inter-regional transmission capacity from 120 GW today to 143 GW by 2027, and 168 GW by 2032. Recent amendments to the CERC General Network Access (GNA) Regulations, 2025, have significantly improved the outlook for transmission readiness.

The introduction of time-segmented access, 'solar-hours' and 'non-solar-hours', allows dynamic sharing of corridors between solar, wind, and storage projects, unlocking idle capacity and easing congestion in renewable energy-rich states. Provisions for source flexibility, stricter connectivity norms, and greater substation-level transparency further streamline grid access and curb speculative allocations.

Investment Appeal and Market Mechanisms

Despite short-term delays, India remains a magnet for clean energy capital. Renewable tariffs continue to be among the lowest globally, ensuring long-term competitiveness. India continues to be one of the most attractive destinations for investment in clean energy sector, and international interest remains high. Global investors are not exiting India but are repositioning towards integrated and storage-backed portfolios.

To complement physical grid expansion, Virtual Power Purchase Agreements (VPPAs) and other market-based instruments will play a pivotal role in accelerating renewable energy deployment. VPPAs allow corporate and institutional buyers to contract for renewable power virtually, decoupling procurement from physical delivery, thereby deepening demand, providing price certainty to developers, and stimulating private investment in projects awaiting grid connectivity.

Coupled with green attribute trading, market-based ancillary services, and day-ahead and real-time market integration, these instruments will create a robust ecosystem for flexible, demand-driven renewable growth. Such mechanisms are in the process of being strategically incorporated under the Electricity (Amendment) Bill or through CERC market regulations, with enabling policy support from MNRE and MoP.

The next phase of growth is already taking shape with large hybrid and RTC projects moving into execution across Rajasthan, Gujarat, and Karnataka. Offshore wind and pumped hydro storage are gaining momentum, while distributed solar and agrovoltaic initiatives under PM Suryaghar and PM KUSUM are deepening rural participation. The National Green Hydrogen Mission is linking renewables with industrial decarbonization, and renewable energy integration is being strengthened through Green Energy Corridor Phase III.

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