ENA Sectors 2025-06-18 16:16:29 <p><span style="font-size:14px"><strong>New Delhi, Jun 18 (KNN) </strong>Indias Central Electricity Regulatory Commission (CERC) has unveiled a draft amendment to electricity trading rules aimed at integrating Virtual Power Purchase Agreements (VPPAs) into the power markets, as part of its draft Power Market Regulations, 2025.</span></p> <p><span style="font-size:14px">Under this novel framework, large industrial consumers can enter into over-the-counter (OTC) contracts with renewable energy producers to virtually purchase electricity at a predetermined rate&mdash;without physically taking delivery of power.</span></p> <p><span style="font-size:14px">The VPPA agreement mechanism works by having generators sell the electricity in the open market, while consumers pay or receive the financial difference between the fixed VPPA price and actual market prices.</span></p> <p><span style="font-size:14px">This innovative tool is expected to help corporations meet clean energy mandates and promote renewable investment.</span></p> <p><span style="font-size:14px">However, analysts caution that VPPAs could be used merely as paper offsets, allowing companies to claim 100 per cent renewable consumption without driving actual clean energy usage.</span></p> <p><span style="font-size:14px">The proposal also includes expanded surveillance powers for CERC, enabling it to audit and inspect power exchanges and OTC platforms.</span></p> <p><span style="font-size:14px">The timing coincides with the National Stock Exchange (NSE) and Multi Commodity Exchange of India (MCX) planning their own power derivatives contracts&mdash;aimed at deepening the market and offering new hedging tools.</span></p> <p><span style="font-size:14px">CERC has invited public feedback on the draft until July 14, after which the regulator plans to finalize the rules. Advocates of the VPPA framework see it as a strategic step toward financial innovation in renewable energy markets and a move aligned with Indias broader decarbonization goals.</span></p> <p><span style="font-size:14px">Skeptics, however, warn that without strong enforcement, the mechanism may result in companies meeting targets through financial engineering rather than actual green consumption.</span></p> <p><span style="font-size:14px">If adopted, VPPAs could mark a key evolution in Indias power markets&mdash;blending sustainability with financial sophistication while expanding options for corporate renewable procurement.</span></p> <p><em><strong><span style="font-size:14px">(KNN Bureau)</span></strong></em></p> 42497 https://knnindia.co.in/news/newsdetails/sectors/india-proposes-virtual-power-agreements-to-supercharge-renewable-energy-trading 2025-06-18 16:16:29 knnindia.co.in