In a recently-released report, WWF India has highlighted that virtual power purchase agreements (VPPA) for commercial & industrial (C&I) consumers could contribute towards meeting India’s renewable energy targets.
The report, “Virtual Power Purchase Agreement (VPPA) for C&I consumers in India” highlights the total estimated demand for VPPAs in India by 2030 could be as high as 104 GW, which could help to meet 27 per cent of the remaining target of India’s 500 GW target by 2030.
Strategic advantages
The VPPAs offer many strategic advantages that allow them to address current gaps in the market without disrupting the existing relationship with DISCOMS for procurement. This report not only describes the benefits offered by VPPAs in India but also puts forward suggestions on the specific roles of stakeholders and suggests a path forward that would enable the implementation of VPPAs in India.
Enhancing RE for C&I consumers
“We are aware that more than 50 per cent electricity consumption comes from commercial & industrial segment. It is our endeavor to put in our best efforts and emphasis on the possible mechanisms to provide a conducive atmosphere to commercial and industrial consumers to go for more RE. The report will come handy to the consumers and policymakers to take the initiative of enhancing the renewable electricity mix from the C&I segment into the Indian electricity grid”, said Dinesh Jagdale, Joint Secretary, Ministry of New & Renewable Energy (MNRE).
Helping corporates go green
“Corporate consumers today are facing increasing pressure from stakeholders to ‘go green’. The introduction of new and innovative avenues like Virtual Power Purchase Agreements that consolidate demand effectively and are less likely to be impacted by changing regulations will go a long way towards building trust in order for corporates to participate in meeting India’s targets,” said Ravi Singh Secretary-General and CEO of WWF India.
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Successful precedents
However, if India consummates the renewable goals, there is a need to build renewable Energy on large scale. Virtual power purchase agreements (VPPAs) have emerged as a popular tool for corporate groups to increase the share of renewable procurement significantly in a short period of time. Large corporate groups like Microsoft, Google, and Amazon have successfully used this model to meet their renewable targets internationally.
Featured diagram depicting the operating mechanism of a virtual power purchase agreement (VPPA), has been sourced from the “Virtual Power Purchase Agreement (VPPA) for C&I consumers in India” report discussed in this story. The full report may be accessed here.
