Understanding Virtual Power Purchase Agreements In India: Emerging Trends In The Energy Sector

Introduction

India's "Panchamrit" commitments, which were announced at the 26th Conference of Parties("COP26") held in Glasgow, United Kingdom, include reaching a target 500 GW of non-fossil fuel energy capacity by the year 2030. The said target has set a base for India's transition to a clean energy economy and India's commitment in reaching the said goal is clearly visible in its approach- including but not limited to change in renewable energy policies thereby, considerably relaxing the laws for land acquisition, among others. One such approach that has been adopted by India is the introduction of Virtual Power Purchase Agreements ("VPPAs"), which have become an essential instrument in facilitating India's commitment to reaching its target by balancing access to renewable energy with financial security. Although VPPAs are accepted worldwide, the Indian energy market has only recently taken steps to provide a structured regulatory framework for their