11 January 2026
Business Standard
Interviews
ReNew Chairman and Chief Executive Officer Sumant Sinha says he believes the latest US withdrawal from global organisations working to address climate change is a setback. The Indian industry is also in talks with the government on demands for compensation for revenue losses due to delays in transmission capacity creation, while the production-linked incentive (PLI) scheme for renewable energy has seen limited uptake, he tells Sudheer Pal Singh in an interview in New Delhi. Edited excerpts:
What do you make of the latest US
withdrawal from global organisations working to address climate change? That
list includes the United Nations Framework Convention on Climate Change, the
International Renewable Energy Agency, and the International Solar Alliance.
• It was on the cards for a long time and had already been baked into people’s expectations. This has been the stated position of the current US administration for a while, and everyone knew it was coming. The US did not show up at the Conference of Parties (COP). It had, de facto, already pulled out of these institutions. Now it has done so more formally — that’s all.
What would be its impact?
• When the world’s largest economy pulls
out of anything, it is clearly a setback. It is a setback for climate action,
including the scientific work underpinning climate change studies. Several
research and measurement organisations in the US have seen their funding cut.
The benefit of climate research already
carried out in the US will no longer be available. When the largest economy
pulls out and does not do enough to curb its carbon emissions, it weakens
global efforts.
The silver lining is that COP still happened, and the other 192 countries reaffirmed their commitment to tackling climate change.
Has the Indian government tackled issues
related to the lack of power purchase agreements (PPAs) and grid constraints?
• There is a strong push from both the
government and industry to ramp up renewables. India used to add around 5
gigawatt (GW) of renewable capacity annually three years ago. That rose to 45
GW last calendar year, and I expect it to increase further to 65–70 GW soon, as
a lot of capacity has been allocated over the past two to three years, and
several large players have entered with high ambition and capital. Lenders are
comfortable as well.
• Execution issues do surface. Distribution
companies (discoms) are not signing PPAs as quickly as expected because
electricity demand growth has been slower than anticipated, partly due to
extended monsoons in 2025. There are also occasional mismatches in the pace of
grid buildout, leading to curtailment and revenue losses. If a developer is
asked to stop production even when the plant is ready because of grid-level
issues, there should be a compensation mechanism. We have done what we were
supposed to do.
• We are discussing this with the government because any generation not undertaken is a direct ripple loss to our bottom line. Ideally, grid buildout should stay ahead of capacity addition, but that is not entirely the case at present. Delays in transmission capacity creation create problems for developers.
Could policy planners have foreseen
these issues?
• Foreseeing is one thing; planning and
execution are another. Shortfalls can occur at the execution stage. Discoms
operate at the state level, while auctions are largely conducted by the Centre.
When discoms do not step in to buy power, there is little the central
government can do.
Grid infrastructure falls under the power
ministry, which allocates transmission lines. PPAs, meanwhile, are handled by
the renewable energy ministry and its nodal agencies, which award PPAs and
enforce timelines, with penalties for delays. These are two separate buckets.
When transmission projects are delayed — often due to right-of-way issues — it
affects grid readiness.
So while planning and bid allocation may be sound, the two buckets need to function in a more synchronised manner. The terms of our PPAs are decided by the Ministry of New and Renewable Energy (MNRE), while grid buildout is overseen by the power ministry. Our demand for compensation due to grid unavailability sits with the power ministry, even though our commercial agreements are with MNRE or its nodal agencies. There needs to be an institutional mechanism to resolve such issues.
Do you expect this issue to have
long-term implications for the sector’s viability?
• No. This is not a systemic issue that
could derail investment. It surfaces intermittently in certain states. When it
does, it hurts our bottom line, but it is not structural. At present, it is
largely confined to Rajasthan.
One area that could become a constraint is
grid management. As renewable capacity rises, managing the grid becomes more
complex. The Central Electricity Authority is therefore imposing more stringent
requirements on renewable energy projects. How these are designed will be
critical. If conditions are too strict or if penalties are attached, it could
hurt developers. These issues are still under discussion between the
stakeholders and the government.
Grid management is why batteries are becoming increasingly important. On the PPA side, some issues will ease as state-level bids increase, since states will float bids when demand is clearer. There is also rapid growth in corporate renewable procurement, where companies buy power directly. That is emerging as a sizable opportunity.
What are your top two recommendations
for this year’s Budget?
• In last year’s Budget, the finance
minister announced clean-tech manufacturing push. It would help to see more
detail on this, particularly on potential subsidies. We also expect greater
clarity on the PLI scheme for solar manufacturing. Uptake has been limited
because the terms were stringent. By the time companies added capacity, many
were unable to meet the PLI requirements.
