How CERC’s New VPPA Framework Is Transforming Renewable Procurement In India?

India’s renewable energy market has now entered a more structured regulatory phase with the issuance of the Central Electricity Regulatory Commission (“CERC”) Guidelines for Virtual Power Purchase Agreements (“VPPAs”) dated 24 December 2025 and the subsequent Statement of Reasons issued on 27 April 2026.

For several years, VPPAs remained commercially significant yet legally uncertain within India’s renewable energy ecosystem. While corporates increasingly explored virtual renewable procurement mechanisms to meet sustainability and decarbonisation targets, India lacked a formal framework governing their regulatory treatment and enforceability.

The new framework materially changes that position. The Guidelines formally recognise qualifying VPPAs as Non-Transferable Specific Delivery (“NTSD”) based over-the-counter (“OTC”) contracts regulated by CERC, integrate VPPA-linked procurement into India’s REC and Renewable Consumption Obligation (“RCO”) ecosystem and simultaneously restrict