Ember’s response to the draft guidelines for Virtual Power Purchase Agreements in India
Ember’s response to comments solicited by the Hon’ble Central Electricity Regulatory Commission on the regulatory framework for Virtual Power Purchase Agreements (VPPA) in India
Summary
VPPAs can be a step forward in renewable accounting, but a step back for the needs of the power system
India’s new guidelines on Virtual Power Purchase Agreements (VPPAs) offer an innovative pathway for large consumers to meet their Renewable Consumption Obligations (RCOs) through Renewable Energy Certificates (RECs). This is likely to accelerate the deployment of plain vanilla solar- the most cost-effective option for generating RECs today.
However, VPPAs carry two critical risks that merit close scrutiny. First, they may worsen India’s flexibility challenge, as increasing solar output and falling midday power prices underscore the urgent need to integrate storage into the power system. Second, VPPAs risk becoming a mere compliance mechanism- enabling consumers to claim 100% renewable usage through variable RE, while avoiding investments in future-ready solutions such as energy storage and demand-side flexibility.
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Authored by Duttatreya Das and Neshwin Rodrigues, the paper comments on the regulatory framework for Virtual Power Purchase Agreements (VPPA) in India.
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