The Central Electricity Regulatory Commission has released draft guidelines for Virtual Power Purchase Agreements, a type of corporate power purchase agreement, to promote renewable energy procurement in India. These allow corporates to financially settle contracts with renewable energy generators without physical power delivery, enabling them to meet their Renewable Energy Consumption Obligations. The guidelines aim to facilitate compliance with RCO targets and provide a new option for large commercial and industrial consumers to procurements through inter-state renewable energy generators. However, the guidelines still lack clarity on certain aspects, such as monitoring mechanisms, dispute resolution, and disclosure obligations. Despite these gaps, the introduction of VPPAs is seen as a positive step towards promoting renewable energy consumption and enhancing demand-side flexibility in the electricity market.
The article was authored by Poonam Verma Sengupta (Partner), published in Hindustan Times.
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Poonam has been actively involved in the disputes and corporate practice of the firm with primary focus in the Energy and Transportation Sector. For around two decades with the firm, Poonam has specialized in Power and Aviation Sectors.