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India could add around 45-50 gigawatts of renewable energy capacity annually over the next two years, supported by a large pipeline of projects awaiting power purchase agreements (PPAs), according to Nuvama Research.
The research firm said around 140 gigawatts of renewable capacity is yet to be converted into PPAs, while about 86 gigawatts of capacity already has PPAs. Based on this pipeline, Nuvama expects renewable energy additions to accelerate over the next two years. "Given ~86GW of existing PPAs, we believe annual RE additions of ~45-50GW over the next two years are achievable, including solar rooftop additions," Nuvama said in its latest power sector update. The report said around 2.26 lakh megawatts of renewable capacity has been tendered since FY23, of which about 1.26 lakh megawatts has been awarded. However, only around 86,000 megawatts, or 38 per cent of the total tendered capacity, currently has PPAs, leaving nearly 1.40 lakh megawatts yet to be converted into PPAs. Nuvama noted that renewable capacity additions have already gathered pace, with 13.3 GW added year-to-date in FY27. India's total installed power capacity stood at around 549 GW at the end of June 2026. The outlook comes as power demand remains strong. Electricity demand rose 11.2 per cent year-on-year in July 2026 to around 171 billion units, while peak demand reached nearly 270 gigawatts, up about 22 per cent from 220 gigawatts in July 2025. The increase in demand also lifted thermal plant utilisation, with all-India thermal plant load factor rising to 68.2 per cent in July from 62.3 per cent a year earlier. Nuvama said the thermal generation mix stood at around 67 per cent, while renewable generation accounted for around 20 per cent. "Overall, the macro demand remains favourable, and we remain directionally positive on generation (Thermal/RE) and transmission sector momentum," the report said. However, the report flagged execution challenges in the transmission segment, with labour shortages continuing to affect EPC players. It expects these constraints to ease in the second half of FY27, potentially allowing smoother project execution. Nuvama also noted that power prices remained sharply different across the day, with solar-hour prices at around Rs 2.8 per kWh, while non-solar evening prices rose to around Rs 7.5 per kWh in July. (ANI)
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