India gears up for short-term RE trade

Moving away from the present preference for setting up such projects on the basis of long-term tie-up, India is finalizing the contours of green markets for short-term trade of renewable energy. Experts believe that now renewable energy companies will have the option to sell their power, particularly in context of recent examples of contract reneging by state distribution companies.

“Over the last few years, majority of RE capacities are tendered through competitive bidding route and tied-up under long-term PPAs. However, there are quite a few concerns which are being raised by renewable energy generators such as uncertainties around sanctity of power contracts and curtailment of power in various renewable energy-rich states. On buyer side, there are no practical options available for procuring RE in short-term market. It is thus imperative to develop market-based mechanism for trading of renewable energy to foster development of renewable energy in the country,” Amit Kumar, partner-clean energy at PwC said.

Forging short-term power market for renewable energy will boost investments in the renewable energy sector, help meet emission reduction targets and fulfil targets set by the government.