The dispute centres around a 630 MW SECI contract from firm and dispatchable renewable energy (FDRE) projects, which will use energy storage to supply round-the-clock electricity.
SECI has objected to the distribution company RUVITL’s move to back out of the agreement, arguing that the power sale agreement (PSA) is legally binding, according to documents reviewed by Mint and two people aware of the development.
“RUVITL cannot unilaterally withdraw the procurement of the 630 MW capacity after three and half months from the date of signing the PSA. The PSA is a legally binding document, and any withdrawal at this stage may have regulatory and contractual implications," according to a 9 October SECI communication to RUVITL.
Analysts say the standoff may shake investor confidence, given that India will need to invest $1.3 trillion in non-fossil power generation capacity by 2035 to meet India's energy transition goal and to stay on track to meet net zero by 2070.
This latest setback also comes in the backdrop of union power ministry directing the SECI, NTPC Ltd, NHPC Ltd, and SJVN Ltd to cancel the awarded contracts by the end of this month wherein it’s not feasible to sign power purchase agreements (PPAs) and PSAs, as reported by Mint earlier.
Many discoms have chosen to wait for lower tariffs rather than sign PSAs straightaway, holding up the whole process.
Rating agency Icra said on Thursday that only 5.8 GW of renewable capacity has been awarded in the first eight months of FY26. India awarded 47.3 GW in FY24 and 40.6 GW in FY25. Unsigned PPA capacity remains at about 40-45 GW as of date, according to Icra.
The 630 MW bid was called by SECI to initially meet the seasonal and time-specific power demand of Delhi power distribution companies (discoms) – BSES Rajdhani Power Limited (BRPL) and BSES Yamuna Power Limited (BYPL) – which didn’t sign the PSA due to regulatory delay; post which SECI offered the power to other discoms, including RUVITL.
The e-auction for the FDRE was held on 25 July, with the letter of awards (LoAs) issued to the successful bidders on 7 August. The lowest discovered tariff through the e-auction was ₹4.98 per unit.
"This is simply not acceptable in any rules-based system and will have a bearing on investor's interest in India' green energy space," said a chief executive officer of one of the power generation companies that has the LoA for the tender.
SECI is an intermediary in the renewable energy chain, and has signed power purchase agreements (PPAs) for this contract with project developers —BlackRock’ Global Infrastructure Partners (GIP) owned Vena Energy Aura Private Ltd, International Finance Corp. (IFC) and KKR-backed Hero Future Energies’ (HFE) Hero Solar Energy Private Ltd, JSW Group’ JSW Neo Energy Ltd, New York-based I Squared Capital-backed Hexa Climate Solutions Private Ltd and KKR-backed Serentica India Renewables Private Ltd. It has also signed PSA with Rajasthan’ power distribution company (discom) RUVITL, in this case.
India’s installed renewable energy capacity is around 197 GW, and solar and wind account for 129.92 GW and 53.60 GW, respectively.
Interestingly, Rajasthan is the state with the highest installed green energy capacity at 40.40 GW.
“The real concern is spillover. If one state feels it can get away with reopening a concluded contract, others will eventually test the limits. That’s how a one-off becomes a habit. And once doubt enters the system, it lingers for years, no matter how many reassurances follow," said Sanjay Aggarwal, former President of Fortum India and presently advisor for Fortum Holdings BV.
"India can absorb an aberration. What it cannot absorb is a pattern — especially one built on the mistaken belief that investors will always come back, no matter what."
“Capital has options. Credibility is how you stay on the shortlist," added Aggarwal, who was also the global head of Solar for the Finnish state-run energy utility.
Spokespersons for Global Infrastructure Partners, I Squared Capital, JSW Group and Sanjeev Aggarwal, founder and chairman, Hexa Climate Solutions declined comment.
Queries emailed to the spokespersons of SECI, RUVITL, Rajasthan government, ministries of new and renewable energy and power, Vena Energy, Hero Future Energies, Serentica India Renewables Private Ltd and global investors KKR, and International Finance Corporation on Wednesday night remained unanswered. Queries emailed to spokesperson for BRPL and BYPL on late Wednesday also remained unanswered.
Key Takeaways
- The SECI–RUVITL standoff highlights growing risks to contract sanctity in India’s renewable energy market.
- State discom backtracking on signed PSAs is emerging as a fresh overhang for green energy investments.
- The dispute could raise financing costs and slow new renewable capacity additions.
- The episode revives older concerns around policy certainty in state-level clean power procurement.
The stand-off
RUVITL, in a 26 September communication to SECI, which was reviewed by Mint, said, some facts emerged after signing of the PSA and weren’t disclosed earlier by SECI. These include non-disclosure that the bidding was conducted as a state-specific bid tailored to meet Delhi’s power demand pattern, Delhi’s refusal to accept the allocation, and deviation by SECI from the tariff adoption process.
“In light of the above, the matter was deliberated in detail during the recent Board meeting of RUVITL. After considering all relevant facts and prevailing circumstances, the Board has taken a decision not to proceed further with the procurement of power from the 630 MW ISTS FDRE Projects," the RUVITL communication said.
Meanwhile, SECI in its 9 October communication said it "received a letter from RUVITL after three months of signing the PSA, citing some reasons, i.e. Delhi demand pattern, Approval process of CERC, etc, and not to proceed with the procurement."
Before signing the agreement with SECI, RUVITL is expected to check the matching demand profile, seasonal demand, and all other aspects, SECI said. “So, not to proceed with the procurement mentioning the reasons are afterthought and contrary to the terms and condition of signed PSA."
It said RUVITL had confirmed on 10 June 2025 that it would offtake the power after due diligence, and that all relevant documents, including the request for selection, PPAs, PSA and CERC tariff order, were shared before the PSA was signed on 30 June 2025.
“Furthermore, SECI discussed in details with the RUVITL team, regarding the demand profile and key features of the scheme, as well as the tariff adoption by the Hon'ble CERC, prior to the signing of the PSA. SECI has maintained full transparency throughout the entire process," the SECI communication said.
Given that a PSA is legally enforceable, SECI can approach the Central Electricity Regulatory Commission (CERC) or a State Electricity Regulatory Commision (SERC) for its adoption.
In the event of a default by RUVITL, there are also financial consequences wherein SECI can terminate the PSA and claim damages from RUVITL, which can be equivalent to 24 months of charges for the contracted capacity (calculated at 80% demand fulfilment ratio or DFR).
For any legal adjudication, it can go to the Appellate Tribunal for Electricity (Aptel) and also has the recourse to challenge an Aptel order in the Supreme Court.
SECI does not bear the counterparty risk.
Recalling earlier issues
The controversial move by the solar resource-endowed state of Rajasthan is not a one-off event in the Indian green energy space. The sector has gone through similar trials and tribulations and faced investor criticism over the earlier attempt by then Andhra Pradesh chief minister Y.S. Jagan Mohan Reddy to renegotiate clean energy tariffs.
The Punjab government led by then chief minister Amarinder Singh had also tried to renegotiate clean energy contracts, with the Punjab State Power Corp. Ltd (PSPCL) seeking a discount.
Analysts remain hopeful about India’s green energy space. Icra’s outlook for the renewable sector remains stable, led by strong policy support, superior tariff competitiveness and sustainability initiatives by large commercial and industrial customers.
"However, challenges remain on the execution front, including land and transmission infrastructure, delays in signing PPAs, exposure to equipment prices and distribution utility finances," Icra said in a note on 20 November.