India Power Ministry Revokes Uniform Tariff, Dissolves Renewable Pricing Pools

The Indian Ministry of Power has revoked the Uniform Renewable Energy Tariff (URET) mechanism and dissolved the Solar Power Central Pool and Solar-Wind Hybrid Central Pool to address concerns about tariff uncertainty that have delayed power sale agreements (PSAs) and stalled renewable energy projects. Originally introduced in February 2024 to standardize tariffs for renewable energy over a three-year period, the mechanism faced criticism from Renewable Energy Implementing Agencies (REIAs) and developers who reported procurers' reluctance to sign PSAs due to uncertain tariffs. The ministry’s decision aims to expedite renewable energy deployment by allowing more flexible price discovery between producers and users, facilitating the signing of PSAs and power purchase agreements (PPAs). While the central pricing pools are dissolved, bids received and letters of award issued under URET remain valid and can be used for executing agreements. This policy shift comes as India seeks to achieve its goal of 500 GW renewable energy capacity by 2030, with 185 GW already installed as of mid-2025, but faces challenges including transmission delays and regulatory hurdles. The move is expected to accelerate the development of renewable projects by removing barriers linked to tariff fixation and contract delays.