India is advancing towards an ambitious target of 500 gigawatts of installed non-fossil energy capacity by 2030, which requires the continuous deployment of solar, wind, and hybrid energy systems. As the nation scales this infrastructure, the contractual framework supporting it is evolving as part of a necessary and consequential process. For a long time in India, the Power Purchase Agreement (“PPA”) has been the standard instrument for long-term electricity procurement, providing revenue certainty and ensuring project financing.
However, as the grid modernises and variable renewable penetration deepens in India, the structural limitations of the PPA model have become apparent, giving way to financially settled mechanisms that better align generator incentives with real-time market signals in mature global markets. Simply put, the PPA model, for all its merits, is showing its age.
