INDIA Trends and Developments Contributed by: Poonam Verma Sengupta, Aditya Gupta, Sakshi Kapoor and Rajesh Jha, JSA
A notable development is the issuance of the Guide- lines for Virtual Power Purchase Agreements (VPPAs) by CERC on 24 December 2025, which provide a framework for virtual renewable energy procurement by commercial and industrial consumers. A VPPA is a contractual arrangement under which a renewable energy generator sells electricity into the market, while the generator and the buyer agree on a fixed contract price, with any difference between that price and the prevailing market price to be settled financially between the parties. The buyer does not receive the electricity itself but receives the Renewable Energy Certificates (RECs) associated with the contracted renewable ener- gy generation, thereby obtaining the renewable energy attributes without physical delivery of power. The above framework assumes particular significance in light of the RCOs introduced under the Energy Conservation Act, 2001. The RCOs require desig- nated consumers to meet a prescribed proportion of their electricity consumption from non-fossil sources. VPPAs therefore provide an additional mechanism for compliance while creating a new avenue for corporate participation in renewable energy markets. Energy storage is also assuming increasing impor- tance within the regulatory framework. As renewable energy penetration increases, the challenge is no longer limited to adding generation capacity but also ensuring availability of clean power on a reliable and round-the-clock basis. Recognising this, policymak- ers have introduced a range of measures to support deployment of BESSs and Pumped Storage Pro- jects (PSPs). These include enhanced REC benefits for storage assets charged from renewable sources, transmission charge waivers for eligible projects, and facilitative charging arrangements during the project development stage. CERC has also permitted ESSs to draw charging power under temporary GNA arrange- ments pending completion of formal drawal studies, thereby reducing implementation bottlenecks. Recent amendments to the CERC (Terms and Condi- tions of Tariff) Regulations further permit coal, lignite and gas-based generating stations to integrate ESSs and recover the associated costs through a supple- mentary tariff mechanism. These developments reflect a broader regulatory recognition that storage will play
a critical role in enhancing grid flexibility, facilitating round-the-clock renewable energy supply and sup- porting large-scale renewable energy integration. Beyond electricity markets, policymakers are also establishing frameworks to support wider decar- bonisation objectives. The National Green Hydrogen Mission seeks to facilitate production, utilisation and export of green hydrogen and its derivatives. In paral- lel, the Carbon Credit Trading Scheme) establishes a framework for trading Carbon Credit Certificates and forms an important component of India’s emerging carbon market architecture. Together, these initiatives have the potential to create new revenue streams and attract investment into low-carbon technologies. At the same time, the continued expansion of the Approved List of Models and Manufacturers (ALMM) framework reflects a broader policy emphasis on domestic manufacturing, supply-chain resilience and energy security. Initially introduced for solar modules, the framework has progressively expanded across the renewable energy value chain. The introduction of ALMM List-II for solar cells and the proposed ALMM List-III for ingots and wafers indicate a clear policy objective of developing domestic manufacturing capa- bilities beyond module assembly. A similar localisation framework has also been introduced for the wind sec- tor through ALMM (Wind). These developments are expected to have a significant influence on project pro- curement strategies, supply-chain planning and invest- ment decisions across the renewable energy sector. Looking ahead India’s renewable energy transition is being shaped by considerations that extend beyond capacity addition alone. As the sector matures, regulatory attention is expanding towards efficient utilisation of infrastruc- ture, operational reliability and integration of renew- able energy into the broader power system. At the same time, emerging frameworks relating to corporate renewable energy procurement, energy storage, green hydrogen, carbon markets and domestic manufactur- ing are creating new opportunities across the value chain. Together, these developments and the manner in which they are implemented will play an important role in defining the next phase of India’s energy tran- sition.
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