The Central Electricity Regulatory Commission (CERC) has released draft guidelines for virtual power purchase agreements (VPPAs). The VPPAs are intended as a mechanism to help designated consumers meet their renewable consumption obligation (RCO) targets. Under the proposed framework, a designated consumer can enter into a long-term bilateral VPPA with a renewable energy generator at a mutually agreed price. The renewable energy generator may then sell the electricity through power exchanges or any other authorised channels in the day-ahead market, real-time market, or any other approved method under the Electricity Act, 2003. The consumer will then receive renewable energy certificates (RECs) equivalent to the contracted capacity, which can be used for RCO compliance or for claiming green attributes.
These RECs will not be tradable, reportedly. VPPAs can be executed directly with a trader or via an over-the-counter platform registered with CERC, based on mutually agreed terms and conditions. The difference between the VPPA price and the market price at which electricity is sold through power exchanges or any other mode will be settled bilaterally between the consumer and the renewable energy generator.
All VPPA contracts will be non-tradable, non-transferable, and binding for the full duration of the agreement. Upon receiving RECs, the consumer must inform the REC registry. Any disputes arising during the execution of the contract must be settled as per the contractual provisions.
