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Legal Central Ministry of Power Electricity Act, 2003

Guidelines for Virtual Power Purchase Agreements issued by the Central Electricity Regulatory Commission

24-Dec-2025 | No. L-1/257/2020/(PMR-4)/CERC

The Central Electricity Regulatory Commission (CERC) has issued the Guidelines for Virtual Power Purchase Agreements (VPPAs) to provide a statutory and regulatory framework for execution of VPPAs between Renewable Energy Generating Stations (REGS) and Consumers or Designated Consumers. These Guidelines shall come into force from such date as may be separately notified by the Commission and shall be reviewed from time to time as decided by CERC. The Guidelines apply to all parties entering into VPPAs as defined therein. Key features of the Guidelines include: a) VPPAs are bilateral, non-tradable and non-transferable Over-The-Counter contracts, with a minimum tenure of one year, entered at a mutually agreed VPPA Strike Price. b) Electricity generated by REGS shall be sold through power exchanges or other authorised modes under the Electricity Act, 2003 or Power Market Regulations, 2021, for purposes other than RPO/RCO compliance. c) Renewable Energy Certificates (RECs) issued to REGS shall be transferred to the Consumer or Designated Consumer, who may use them for RPO/RCO compliance, and such RECs shall not be eligible for trading. d) The difference between the VPPA Strike Price and the Settlement Price discovered in the power market shall be settled bilaterally between the contracting parties as per mutually agreed terms. please refer the document attached for more information.

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