Latest news with #VirtualPowerPurchaseAgreements
Hindustan Times
12 hours ago
- Business
- Hindustan Times
The virtual PPA voyage in India
On May 22, 2025, the Central Electricity Regulatory Commission (CERC) released draft guidelines to establish a regulatory framework for Virtual Power Purchase Agreements (VPPAs), marking another milestone on India's path to its 500 GW renewable energy (RE) target. VPPA is a form of a corporate power purchase agreement (CPPA). A VPPA or a CPPA is not defined under the Indian legislation yet. However, the same is already internationally recognised. VPPAs are essentially contracts for difference, allowing corporates to transact with project developers at a fixed price for a fixed duration. While the power is sold on the exchange, Renewable Energy Certificates (RECs) corresponding to the power sold are transferred to the corporate(s) and the differential is paid by the corporate upon transfer of RECs. The VPPA mechanism aims to enhance RE procurement by large commercial and industrial (C&I) consumers with substantial electricity demand. The VPPA model is operative in countries like Australia, UK and the US. In these liberalised electricity markets, VPPAs operate as commercial agreements with no requirement of special energy regulatory approval. Though in some jurisdictions VPPAs are subject to derivative accounting rules. India (until now) had not formally integrated VPPAs into its legal framework. Instead, corporate offtakers (C&I customers) met their RE goals through open-access or captive-supply arrangements, principally via three primary routes of RE consumption i.e. onsite solar, intra-state offsite solar and purchasing RECs. Since corporates generally seek low-risk, firm and competitively priced RE options, exercising these routes of consumption has often been constrained by state-level regulatory issues, surcharges, net-metering caps, wheeling policies etc. In India, while 70 to 80% of the corporates report procuring RE and many have joined the global RE100 initiative, their actual RE consumption still lags i.e. just 7 to 10% of total electricity use compared to 20% in case of companies from the US. CERC's new draft guidelines now provide the first formal recognition of a VPPA contract format. It is perceived that introduction of VPPAs will provide C&I consumers with a fourth option enabling inter-state procurement. Like how it operates internationally, draft guidelines provide that VPPA would allow a designated consumer to financially settle a contract with an RE generator without physically receiving power. The RE generator will sell electricity on exchanges and RECs generated from such sales will be transferred to the consumer for RCO compliance. The price realised on the exchange will then be settled with the consumer. Further, in the draft guidelines VPPAs are proposed to be Non-Transferable Specific Delivery (NTSD) Over-the-Counter (OTC) contracts between consumers and RE generators. Guidelines acknowledge SEBI's clarification that such OTC contracts do not fall under the Securities Contracts (Regulation) Act, placing them within CERC's jurisdiction. This resolves the earlier concerns among corporates (C&I customers) that VPPAs might be treated as derivative instruments, potentially subjecting them to additional regulatory burdens. Though the guidelines come as a first step for formal recognition of VPPAs, they do not yet outline the full regulatory mechanism. The guidelines specify that VPPA disputes will follow the terms of the contract, however, the questions remain as to how VPPAs will be monitored and whether ultimately CERC or any other adjudicatory body will have the jurisdiction. The guidelines also offer limited information on disclosure obligations, risk management protocols etc. This is relevant since the contract would be executed through OTC platforms and the underlying power would be traded on the exchange. It will be important for these gaps to be addressed in follow on regulations or implementation rules. Although the guidelines offer a route for C&I consumers to meet RCO and sustainability goals by avoiding geographic and regulatory barriers, maintaining price competitiveness may be a concern. Much of India's electricity generation is tied up in long-term contracts and the exchange market is largely driven by thermal power. To remain financially viable and cash neutral VPPA tariffs may have to match or beat prevailing break-even rates. In addition to benefitting C&I customers, VPPAs may also aid RE generators by diversifying their customer base. Currently RE developers primarily engage with RPO-bound entities through long-term PPAs. VPPAs on the hand would introduce medium-term contractual opportunities, offering a more flexible and market-aligned price structure. This article is authored by Poonam Verma Sengupta, partner, JSA Advocates and Solicitors.
Yahoo
11-03-2025
- Automotive
- Yahoo
Two auto giants make unexpected move that will have big impact on manufacturing operations — here are the details
A pair of automotive giants are taking another stride into the world of clean energy. According to Electrek, Tesla and Honda are set to start buying power from a massive new solar energy farm in Texas that is expected to produce 300 megawatts of power. Honda has claimed 200 of those, while Tesla will take the other 100. Delilah 1, which was constructed 140 miles northeast of Dallas, is part of a five-phase Samson and Delilah solar portfolio, which will be one of the largest in the United States when it's completed. If you were to install home solar panels, which of these factors would be your primary motivation? Energy independence Lower power bills Helping the planet No chance I ever go solar Click your choice to see results and speak your mind. The two companies secured this power bump through Virtual Power Purchase Agreements, a contract through which a company agrees to buy power at a fixed rate from an off-site source, like a solar or wind farm. They own none of the infrastructure involved in that power generation, but the tradeoff is that the rates for that power don't change over time. "In North America, Honda is nearing its goal of sourcing 100% of its electricity from carbon-free sources," said Daniel Bremer, carbon neutrality manager at American Honda Motor Co., per Electrek. "As we accelerate toward achieving carbon neutrality for all products and corporate activities, our 200 MW VPPA with Delilah I Solar Energy Center will significantly cut CO2 emissions from Honda US auto manufacturing operations while adding more clean energy into the local grid." The solar industry continues to grow in leaps and bounds around the world as countries seek alternatives to planet-warming dirty energy like oil and gas. In Tibet, the world's highest solar farm has begun operation at 17,000 feet above sea level. In the Philippines, a massive project will see solar power generate enough energy for two million homes. And in Ohio, the state's first floating solar farm is being built that can power 260 homes for three months. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
Yahoo
30-01-2025
- Business
- Yahoo
Vesper Energy Reaches Major Milestone with Hornet Solar Project: Final Module Installed
IRVING, Texas, Jan. 30, 2025 /PRNewswire/ -- Vesper Energy is proud to announce that its Hornet Solar project installed its final module (more than 1.36 million). This accomplishment marks a significant milestone for Vesper Energy's flagship renewable energy project, which spans over six square miles in Swisher County, Texas. Once fully operational, the Hornet Solar project will deliver 600 MWac of renewable energy—enough to power 160,000 homes annually. "The seamless coordination between our team and our EPC partner, Blattner, has enabled us to remain ahead of schedule and on budget while ensuring quality throughout the process," said Juan Suarez, Co-CEO at Vesper Energy. "Most notably, the team accomplished this task with zero recordable injuries, underscoring a commitment to safety and excellence." The Hornet Solar project features bifacial photovoltaic modules mounted on a single-axis tracking system. The project is interconnected to Oncor Electric's transmission system within ERCOT and is contracted to provide power to four off-take partners through individual Virtual Power Purchase Agreements (VPPAs). The Hornet Solar project remains on track to reach full commercialization by the spring of 2025. About Vesper EnergyVesper Energy provides innovative solutions to today's complex energy challenges. Headquartered in Irving, Texas, Vesper Energy is comprised of professionals who have collectively delivered more than 10 GW of renewable energy projects globally. Today, Vesper Energy's development pipeline includes over 55 renewable energy and energy storage assets with a generating capacity of 17 GW— enough to power more than 2 million homes. Working with their customers, communities, and business partners, Vesper Energy develops, owns, and operates renewable energy projects across the United States with the goal of building better energy infrastructure. Media contact: Eliza Rosenthaleeliza@ View original content to download multimedia: SOURCE Vesper Energy Sign in to access your portfolio
