New Delhi: The Ministry of New and Renewable Energy (MNRE) has approved a pilot Contract for Difference (CfD) scheme for 500 MW of renewable energy capacity, with Solar Energy Corporation of India (SECI) appointed as the nodal agency to implement it. An office memorandum dated March 30, accessed by Energy Watch, says the ministry is conveying approval “for implementation of the pilot scheme,” and that the move follows SECI’s proposals sent in October 2025 and January 2026.
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The scheme is designed to let renewable energy developers sell electricity on power exchanges, while SECI settles the difference between a discovered strike price and the market price. In simple terms, the project aims to give developers a predictable revenue floor without moving away from market pricing. The ministry says the model is meant to combine “stable revenues to developers” with “market-based price discovery.”
Under the guidelines, SECI will tender 500 MW of capacity for supply of 1,500 MWh of renewable power each day during non-solar hours. The document says the pilot will cover “500 MW x 3hr supply” and will be used to test the financial, operational and regulatory framework for such contracts in India’s power market.
The scheme will run for 12 years, with projects to be developed on a build-own-operate basis. Selection will be through “transparent reverse bidding, on a bucket-filling basis,” and the maximum bid capacity for one bidder has been capped at 125 MW.
A Contract for Difference, or CfD, is basically a revenue-stabilising tool. If the exchange price falls below the strike price, the gap is paid from the CfD pool to the developer. If the market price rises above the strike price, the excess goes back into the pool. The guidelines spell this out directly: “If the Market Clearing Price (MCP) exceeds the Strike Price, the difference shall be credited to the CfD pool,” and if the MCP is lower, “the shortfall shall be paid to the REG from the CfD pool.”
That is the key policy point. The government is trying to make renewable power tradable on exchanges, but without exposing developers to wild revenue swings. The pilot also aims to build liquidity in non-solar hours, when supply is often harder to secure.
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The scheme will be backed by a Rs 76-crore stabilisation fund. The guidelines say this corpus will be a “revolving buffer” for pay-ins and pay-outs, and that the government’s outgo under the framework is limited to Rs 76 crore.
The document also allows SECI to retain part of the pool’s profits to meet operational expenses, with the balance flowing through the settlement mechanism. It adds that SECI may explore settlement through a power exchange clearing corporation, subject to regulatory compliance.
The pilot comes as India tries to deepen power trading and shift more renewable energy into market-linked structures instead of only long-term procurement contracts.
This CfD pilot is smaller in scale, but it is policy-significant. If it works, it could give renewable developers a way to sell more power on exchanges while keeping lenders and investors comfortable with steadier cash flows.
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