The Indian renewable energy sector faces unique and difficult challenges, as it tries to achieve a 175 GW capacity by 2022. This involves a rapid growth in an environment which still has uncertain policies, contradicting regulations and red tape from government officials. Power being a highly regulated sector, with involvement of multiple government organizations faces a number of issues. While the overall power sector is being reformed by the current government through a reform known as “UDAY”, implementation challenges remain even in progressive states. The wind energy sector is facing a stranded asset issue in the state, with the distribution utility refusing to sign PPAs with the wind power plants. This problem has hit a number of wind power developers such as Tata Power, Hero Future Energies etc, which have developed a large number of wind farms in the state. The RE policy which was promulgated last year by the state government has a provision of buying 1500 MW of wind power capacity by the state utilities, in order to meet their renewable energy purchase obligations (RPO).

Wind energy continues to suffer in India. The state utility which is one of the largest in the world has refused to do so, hiding behind the fact that it has signed PPAs with 1000 MW of wind power since 2011. Though the policy was implemented in 2015, MSEDCL has refused to sign PPAs with these entities. The wind power developers which would be generating losses due to interest payments have written to all government authorities for succor, but have not found a solution to their problems yet. Maharashtra has more than 3000 MW of wind power capacity, which is still far less than the 8000 MW of wind capacity installed by Tamil Nadu.

India has plans to install almost 35 GW of wind capacity over the next 7 years, which would imply a 5 GW annual target. With developers struggling to get 2-3 GW running on the ground due to these implementation challenges, it looks tough for India to get to that target. Many of these distribution utilities are making huge losses and some are even power surplus. How the government will persuade these discoms, to buy the power is going to be an ongoing challenge.