Energy Storage and Hybrid Tenders Drive India’s Renewable Energy Procurement in 1H 2026

August 11: In the first half (1H) of 2026, agencies issued 44 GW of renewable energy tenders and auctioned 16 GW of capacity across energy storage, hybrid, large-scale solar, wind, manufacturing, and rooftop solar projects, according to Mercom India’s newly released India Renewable Energy Procurement and Demand Report.

Renewable energy procurement is increasingly being shaped not only by the need to expand capacity but also by the ability to better align renewable generation with consumer demand. This shift is driving greater adoption of hybrid and energy storage projects that provide more reliable and dispatchable renewable power.

Battery energy storage and hybrid projects together accounted for 45% of the capacity tendered during 1H 2026, reflecting the growing emphasis on flexible renewable energy procurement.

Hybrid projects accounted for the largest share of auctioned capacity in 1H 2026 at 37%, followed by battery energy storage (21%), large-scale solar (19%), wind (17%), rooftop solar (4%), and manufacturing (2%). Together, hybrid and energy storage projects accounted for over 58% of auctioned capacity, reflecting the growing importance of flexibility, reliability, and time-matched renewable power.

A directive from the Ministry of New and Renewable Energy (MNRE) requires implementing agencies to prioritize pending Power Purchase Agreements (PPAs) and Power Sale Agreements (PSAs) before initiating fresh procurement, shifting the emphasis from new tenders to converting awarded capacity into commissioned projects.

Large-scale solar continued to account for a significant share of procurement activity, with over 7 GW tendered and 3 GW auctioned during the first half of the year. Wind procurement also remained robust, with 5 GW tendered and 3 GW auctioned. Large-scale solar remains the most cost-competitive renewable energy source, while wind complements solar generation by improving generation diversity and improving renewable energy availability across more hours of the day.

 “Procurement trends in 1H 2026 show a clear shift from target-based tendering to demand-aligned procurement. Hybrid and battery storage projects accounted for more than half of auctioned capacity, reflecting the growing need for flexible, dispatchable power. Going forward, the industry can expect more tenders designed around each DISCOM’s need for power that better matches its demand profile. The pace of auctions will depend on buyer commitments, transmission readiness, realistic tariffs, and the ability to convert awarded capacity into signed PPAs and PSAs,” said Raj Prabhu, CEO of Mercom Capital Group. 

Agencies are becoming more selective when issuing new tenders, with greater focus on buyer readiness, PPA and PSA conversion, transmission availability, and project viability. Developer interest remains strong in well-structured tenders, but projects with uncertain connectivity or delayed offtake continue to move more slowly.

Manufacturing procurement remained active in 1H 2026, with over 4 GW of module supply tenders issued government and public sector entities as demand for domestically manufactured modules increased. Approximately 28 GW of module supply capacity was pending auction.

Nearly 1 GW of rooftop solar projects were tendered, and about 600 MW auctioned. Rooftop solar tender activity remained subdued during the period as higher project costs, supply constraints, and policy uncertainty weighed on procurement activity.

The implementation of ALMM List-II is beginning to reshape procurement across the solar value chain. Demand for domestically manufactured modules has boosted module supply tenders, while limited availability of DCR-compliant cells has tightened supply. The transition has also affected rooftop solar procurement, with higher system costs and component shortages slowing tender activity in the distributed solar segment alongside changes and delays related to net metering, banking provisions, and other regulatory challenges.

Green hydrogen procurement in 1H 2026 highlighted the sector’s transition toward commercial readiness. Procurement activity increasingly prioritized industrial applications, infrastructure development, and long-term offtake arrangements, reflecting a broader focus on establishing the ecosystem needed for large-scale deployment.

Transmission tender activity centered around interstate and intrastate transmission networks, substations, high-voltage transmission lines, network augmentation, and renewable energy evacuation infrastructure.

The India Renewable Energy Procurement and Demand Report covers all facets of India’s renewable energy tendering and auction activity.