Positive outlook for corporate renewable PPAs accelerating India’s energy transition


28 January, 2021




New Delhi, 28 January 2021: A new report by the World Business Council for Sustainable Development (WBCSD) shows that corporate renewable power purchase agreements (PPAs) in India may increase in 2021, despite setbacks from COVID-19. Companies in India are playing a key role in setting and implementing the country’s ambitious decarbonization trajectory, by driving deployment of renewable technologies through their purchase of renewable power.

In recent years, India has seen impressive growth in corporate renewable electricity sourcing and was the second largest market for corporate renewable PPAs after the US in 2019, with an addition of 1.4 GW of capacity.  However, the report “Corporate Renewable PPAs in India: Market & Policy Update – January 2021” finds that India witnessed a significant slowdown in corporate renewable PPA activity in 2020 (800 MW vs 1.4 GW in 2019).

Two key factors posed new challenges for corporate renewable PPAs in 2020, namely:

  • New restrictions at the state level – including limiting banking provisions for power – that are delaying, and in some cases reversing, open access project approvals and imposing additional open access charges; and
  • The COVID-19 pandemic, which resulted in paused PPA negotiations, delayed permit approvals due to restricted site access and suspended project construction due to labor and equipment shortages.

Looking forward into 2021, there are reasons to be positive. Government reforms in the electricity sector may stimulate uptake of corporate renewable PPAs if successfully executed, including the new draft Electricity Amendment Bill and the privatization of India’s electricity distribution companies. The report highlights several evolving market dynamics from 2020 that are expected to impact the market 2021:

  • The first wind and solar hybrid corporate PPA in India was commissioned, as a model for others to follow and supported by waivers on open access charges for hybrid projects in several states.
  • 2020 saw increased adoption of rooftop solar PPAs to reach almost a third of cumulative onsite solar installations in India.
  • Use of the newly launched Green Term Ahead Market was encouraging in the final quarter of 2020, as an alternative platform for companies to procure renewable power.

Despite limited capacity additions in 2020, company interest in corporate renewable PPAs remains high. Power demand in India has bounced back to pre-COVID levels  and we expect negotiations that were paused in 2020 due to the COVID-19 pandemic to resume in 2021. 

The report expects an increase in demand for corporate renewable PPAs due to increased sustainability ambitions and actions by leading corporate buyers such as Dalmia Cement, Infosys, , Mahindra Holidays & Resorts, Tata Motors, Accenture, Adobe, Ikea, Panasonic, Sony and Starbucks, all of which have voluntarily pledged to meet 100% of their electricity demand with renewable electricity through the RE100 initiative and have operations in India.

Additionally, various developers such as AMP Energy, Amplus Solar, Avaada, CleanMax, Cleantech Solar and Fourth Partner, have planned substantial additional capacity development for the coming years.

This report provides an overview of corporate renewable PPA market data in India and commentary on the market dynamics that have impacted the sector. It outlines policy and regulatory changes at both national and state levels and concludes with an outlook for corporate renewable PPAs in 2021.

Download the report here