Government Considers One-Time Relief Package for 45 Gigawatts of Stranded Renewable Energy Capacity

Stranded Renewable Energy Capacity to Receive One-Time Relief Package

The Ministry of New and Renewable Energy (MNRE) is considering a one-time relief package for 45 GW of stranded renewable energy capacity, for which power purchase agreements (PPAs) have not been signed yet. This proposal comes after a meeting with renewable energy developers held on May 6 under the chairmanship of the Advisor to the Prime Minister.

As of April 2026, PPAs for 44.8 GW of renewable energy (RE) capacity tendered by Renewable Energy Implementing Agencies (REIAs) since April 2023 remain unsigned. The ministry has proposed a draft relief package, which includes a 100% waiver of transmission charges, battery energy storage systems for solar projects, relaxed regulations, and grid connectivity norms among others.

The proposed package has two categories of measures: demand-side facilitation and supply-side resolution options. Demand-side facilitation measures aim to make PSA execution more attractive to discoms, while supply-side resolution options provide developers with clearly defined pathways to resolve their Letter of Award (LoA) status.

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Demand-Side Facilitation Measures

Under demand-side facilitation measures, the ministry has proposed a one-time 100% waiver of Inter-State Transmission System (ISTS) charges for stalled green projects for which power supply agreements (PSA) or PPAs are signed within three months from the date of notifying the package. A second option recommends waiving inter-state transmission charges as per regulations, plus a 25% additional waiver.

ISTS charges add an estimated Rs 0.60 per kWh to the effective landed cost of power for discoms, as per industry assessments. These charges are frequently cited as a key barrier during tariff acceptance and PSA/PPA negotiations.

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The draft package also suggests that states opting to sign PPAs for vanilla solar projects may be provided two hours of Battery Energy Storage Systems (BESS) with Section 62 tariffs for non-solar hours. This will help in meeting discoms operational and grid management requirements.

To address the issue of discoms being reluctant to procure power through the ISTS route due to additional transmission charges and system costs, the ministry has proposed that projects tendered by REIAs under the ISTS-connected framework may be permitted, on a one-time basis, to connect to the State Transmission Utility (STU) network in cases where the power is ultimately supplied to the same state, irrespective of the tender conditions.

Another key proposal is that if discoms sign PSAs within three months from the date of package's notification, they may be made commensurately eligible for deemed Renewable Purchase Obligation (RPO) and Renewable Consumption Obligation (RCO) compliance from the date of signing of the PPA.

Supply-Side Resolution Measures

Under the supply-side resolution measures, the ministry has proposed that developers could exit from the LoA route, without surrendering the connectivity. This could be done by making an application to the Central Transmission Utility of India.

Developers can also substitute the LoA with a PPA signed under another LoA, by making an application to CTUIL.

The proposed package comes after a meeting with RE developers held on May 6 under the chairmanship of the Advisor to the Prime Minister. The meeting was also attended by secretaries of power and renewable energy ministries. In the meeting, the Advisor to PM suggested that MNRE may prepare a One-Time Relief Package specific to stranded RE projects.