The Renewable Energy Law Review: India
In India, the primary legislation governing electricity (including renewable energy (RE)) is the Electricity Act, 2003 (EA 2003). The power to legislate on matters concerning electricity is shared between the central government and the state governments2. However, in case of inconsistency between the two, the central legislation will prevail over the state legislation.3
While the EA 2003 itself does not define RE, other regulations have done so. For example, the Central Electricity Regulatory Commission (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 20204 issued under the EA 2003 defines RE as 'electricity generated from renewable energy sources'. An RE source is further defined in these regulations as a 'renewable source of energy such as water, wind, sunlight, biomass, bagasse, municipal solid waste and other such sources as approved by the MNRE'5. Additionally, the Ministry of Power (MoP) in 2019 categorised large hydropower projects having a capacity of more than 25MW under the ambit of RE sources.6
India occupies the fourth position for overall installed RE capacity in the world.7 Foreign direct investment up to 100 per cent is permitted in the RE sector under the automatic route8 (i.e., no government approval is required), making it an attractive option for foreign investors.
The Indian government aims to achieve 175GW of installed RE capacity by 2022 and establish installed RE capacity of 450GW by 2030.9 As at 31 March 2021, the total cumulative installed RE capacity was 94.43GW, which included 40.09GW of solar capacity, 39.24GW of wind capacity and 10.31GW of bio-power.10
The year in review
This past year has overall proven challenging for India, because of the covid-19 pandemic. However, during this time, India experienced a steady stream of deal traffic in the RE realm. Below are the key developments in the RE sector over the past year.
i Extensions of time granted during the covid-19 pandemic
As a result of the covid-19 pandemic, the (Indian) Ministry of New and Renewable Energy (MNRE) has allowed for extensions of time for commissioning of utility state projects in two phases. The first extension11 granted all RE utility scale projects under implementation as on the date of lockdown (i.e., 25 March 2020) a blanket extension of five months, extendable in exceptional circumstances by up to six months.
The second extension was issued in May 2021, as a result of the second wave of covid-19 in India, for projects that had their scheduled commissioning dates on or after 1 April 2021, if this extension was not used to claim termination of the power purchase agreement (PPA) or increase in project cost.12 The actual quantum of the extension would be decided in due course depending on the covid-19 developments.
ii Reduction in solar tariffs discovered through competitive bidding
Due to the declining cost of solar modules globally, there has been a reduction in the solar tariffs under competitive bids in India. In December 2020, the solar power tariff dropped to an all-time low of 1.99 rupees per unit in an auction of projects of 500MW capacity by Gujarat's distribution licensee.
iii Issuance of the hybrid bidding guidelines
Similar to the guidelines to promote competitive bidding issued by the MNRE in 2017 for solar and wind projects (discussed in in Section III.i), in October 2020, the MNRE issued guidelines for wind–solar hybrid projects13 applicable to projects of at least 50MW with rated capacity of either wind or solar to be at least 33 per cent of the total capacity.14
iv Approval of 'Green Power Tariff' in Maharashtra
In March 2021, the Maharashtra Electricity Regulatory Commission (MERC) allowed levy of a 'Green Power Tariff' on consumers opting for 100 per cent RE for meeting their consumption, above the regular tariff.15 The Green Power Tariff will be computed as the 'difference between variable pooled power purchase cost of non-conventional and conventional sources for all distribution licensees' in Maharashtra.
v Supreme Court's ruling on Great Indian Bustard (GIB)
GIB has been identified as a critically endangered species in India. On 19 April 2021, the Supreme Court of India passed an order16 classifying certain areas as priority areas and potential areas of GIB habitat and requiring undergrounding of all future and existing low voltage lines in such areas. Similarly, for future and existing high voltage lines, the order mandated that these lines be converted into or laid as underground lines unless a Supreme Court-appointed committee determines it is not technically feasible, wherein, only bird diverters will be installed. The order is crucial as it will cause an increase in the project cost for projects that were situated in the identified GIB habitats, which are in the Indian states of Rajasthan and Gujarat, both of which are known for their RE potential.
vi Hydrogen Energy Mission
On 1 February 2021, the Indian Finance Minister presented the Budget for the year 2021–2022, in which it was announced that the Indian government proposes to launch a Hydrogen Energy Mission in 2021–2022 for generation of hydrogen from green power sources.17
While guidelines on the Hydrogen Energy Mission are yet to be issued, a 'Standing Committee on Hydrogen Energy and Fuel Cells' has been constituted under MNRE that has developed the initial draft of the Hydrogen Energy Mission, which is currently under consultation and finalisation.18
vii Key deals in the past year
In May 2021, Adani Green Energy Limited acquired a 100 per cent stake in SB Energy Holdings Ltd, a joint venture of the SoftBank Group and Bharti Enterprises, engaged in developing RE projects with a total portfolio of 4,954MW.19
In May 2021, private equity firm Actis LLP finalised buying an 80 per cent stake in operational 500MW of solar projects of Finland's state-controlled power utility, Fortum Oyj.20
In March 2021, Edelweiss Infrastructure Yield Plus (EIYP), from the Edelweiss Group, acquired a 74 per cent stake in French utility Engie Group's solar assets in India.21
In May 2021, SHV Energy NV acquired an undisclosed majority stake in SunSource Energy Pvt Ltd, an India-based operator of solar power projects, from Neev Fund.22
In November 2020, Blue Leaf Energy Asia Pte Ltd acquired a majority stake in Vibrant Energy Holdings Pte Ltd, an India-based energy provider to commercial and industrial customers, from ATN International, Inc.23
The policy and regulatory framework
i The policy background
The EA 2003 requires the central government to issue a national energy policy and a tariff policy, from time to time.24 Additionally, every five years, based on the national energy policy, the central government is required to issue a 'national electricity plan'.25
In April 2021, the MoP issued the draft (Indian) National Energy Policy 202126 to replace the existing National Electricity Policy 2005. The draft policy houses various aspects including grid operation, energy efficiency and security, optimal generation mix and transmission distribution.
Further, the draft Electricity (Amendment) Bill 202027 has been released to, inter alia, boost private sector participation, reduction of subsidies in the power sector, setting up a contract enforcement authority to regulate contractual disputes in power sector.
Under the EA 2003, project tariffs may be undertaken by competitive bidding28 or may be pre-determined by the relevant electricity commission.29 The National Tariff Policy, 2016 encourages states to procure power through competitive bidding, to keep the tariff low.30
Key policy developments impacting RE development in India are as below.
Competitive Bidding Guidelines
To promote fairness and standardisation in the competitive bidding process, the Indian government has notified guidelines for tariff-based competitive bidding processes for grid connected solar,31 wind,32 hybrid33 and round-the-clock34 projects (Competitive Bidding Guidelines).
The Competitive Bidding Guidelines apply to long-term procurement of electricity by the distribution licensees from projects that are above the respectively prescribed capacities, through competitive bidding. Any deviation from the relevant Competitive Bidding Guidelines needs to be approved by the relevant regulatory commission.
Round-the-clock tender issued by Solar Energy Corporation of India (SECI)
To tackle intermittency issues in RE-based projects by 'reverse bundling' high-cost power with cheaper RE power, SECI, in 2020, issued a tender for 5GW of 'round-the-clock' (RTC) power from RE projects on a 'reverse bundling basis' with power from any other (i.e., non-RE) source. The tender process for such projects is currently underway.
Viability gap funding
The (Indian) Ministry of Finance issued the 'Scheme and Guidelines for Financial Support to Public Private Partnerships in Infrastructure', to provide financial support for infrastructure projects undertaken on the public–private partnership model to make them commercially viable.35 In order to avail such support (which is up to 20 per cent of the total project cost along with an additional grant of 20 per cent, which may be provided by the state government), certain conditions are required to be met by the project implementing authority, including that the concession or contract must be awarded to a company in which 51 per cent or more of the subscribed and paid-up equity is owned and controlled by a private entity that is selected by the relevant ministry, state government or statutory authority through open competitive bidding.
Captive generating plants
A 'captive generating plant' is a power plant set up by any person or 'association of persons' to generate electricity primarily for their own use that meets the following criteria36:
- captive users must collectively hold not less than 26 per cent of the equity share capital (with voting rights) in the project company that owns such plant; and
- captive users must collectively consume not less than 51 per cent of the aggregate electricity generated by such plant in a financial year – such consumption (i.e., up to 51 per cent) must be proportionate to each captive user's equity share capital, with a permissible variation of +/– 10 per cent.
The advantages of structuring a project as a captive generating plant is that they are exempted from payment of certain regulatory charges such as the cross-subsidy surcharge.37
Renewable purchase obligations
Section 86(1)(e) of the EA 2003 states that each state electricity regulatory commission must specify a definite percentage of electricity to be purchased from renewable sources of energy. Pursuant to this, various state electricity regulatory commissions have notified regulations specifying the renewable purchase obligations for the obligated entities as defined under each respective state regulations, typically including the distribution licensees and open access consumers for such state.
Renewable generation obligation
The government of India has taken certain policy measures, through the national tariff policy, relating to 'renewable generation obligation' (RGO),38 that seeks to encourage coal-based thermal power generators to diversify into an RE portfolio. It imposes, subject to the central government prescribing limits from time to time, a compliance regime whereby conventional plants are also required to produce a share of their generation from RE sources, by either establishing its own RE source and generating RE equivalent to the required capacity or procuring the required capacity from another RE source. We have not seen any notification yet wherein the central government has prescribed such limits.
Green energy tariff
For the green energy tariff in Maharashtra, please refer to Section II.iv. Other states in India, such as Andhra Pradesh and Karnataka, have also in the past introduced a concept of a green energy tariff. In Maharashtra and Karnataka, the green energy tariff is over and above the retail tariff approved by MERC, whereas in Andhra Pradesh, consumers opting for electricity from RE have been kept in a separate category for which a separate tariff is approved.
India is steadily adopting policy initiatives for electric vehicles with states like Delhi releasing focused policy measures and providing incentives up to 150,000 rupees to speed up the process.39 The National Institution for Transforming India, (NITI Aayog), which is a policy think tank of the Indian government,40 has also released a report highlighting the need for increased investment to speed up India's transition to electric mobility.41
India presently lacks a regulation in the energy storage sphere; however, both MNRE and NITI Aayog are coordinating to formulate this. In 2019, the NITI Aayog modelled the Energy Storage System Roadmap for India for the years 2019–2032 and implementation of this is underway.42 Meanwhile, tenders are continuously being issued for energy storage, with the most recent being that of the 1MW/3.0MWh Battery Energy Storage System by the distribution licensee in Tamil Nadu.
ii The regulatory and consenting framework
As previously mentioned, the EA 2003 is the primary legislation on electricity in India. Additionally, there are regulations specific to each state. India is a common law jurisdiction and relies on precedents, decisions of the Supreme Court, Appellate Tribunal for Electricity (APTEL) and the central and state electricity commissions to shape the jurisprudence with regard to RE.
In relation to supply of power, in terms of the electricity commissions, the Central Electricity Regulatory Commission (CERC) exercises interstate jurisdiction while the State Electricity Regulatory Commissions or Joint Electricity Regulatory Commissions (SERCs/ JERCs) (set up for each state or group of states in India) regulates intra-state matters. The appeals from the CERC and SERCs/JERCs are decided by the APTEL. An appeal to an order of the APTEL lies with the Supreme Court of India.
Each state also has in place an agency, known as the 'State Nodal Agency', as may be designated by the MNRE, to promote efficient use of RE in that state. Additionally, the EA 2003 constituted the Central Electricity Authority as the technical advisory body to the government of India and the electricity regulatory commissions.
Permits and approvals
Unlike for transmission, distribution and trading of electricity, the generation of electricity itself is a delicensed activity under the EA 2003 provided a generating station complies with all technical standards for grid connectivity. However, during the lifetime of the project (including the pre-construction and construction phases), there are numerous approvals that are required by the developer from governmental authorities for other activities, including for adoption of the tariff discovered through competitive bidding, connectivity with the grid, utilising the transmission utility's network, charging the electrical infrastructure, laying of overhead transmission lines etc. Further, in the event that the project is situated within a certain distance from an airport or a defence base, an approval from the relevant ministry will also be required. Additionally, developers are required to ensure compliance with the industrial and labour laws prevalent in the area where the project is being undertaken.
During the process of land acquisition, there are state-specific permits and approvals required to be obtained. There are also certain restrictions on setting up a power project within sensitive areas such as sanctuaries, national parks and reserve forests that must be kept in mind.
With respect to environmental approvals, solar and wind projects have been exempted from obtaining typical environmental clearances that are required for other projects and industries such as the environmental clearance from the Ministry of Environment, Forest and Climate and the 'consent to establish' (CTE) and 'consent to operate' (CTO) from the state pollution control board.43 In relation to the CTE and CTO, an intimation to the relevant state pollution control board will suffice. However, such exemptions are not clear on whether they would apply to floating solar power projects and, therefore, the position may differ in respect of such projects.
Renewable energy project development
i Project finance transaction structures
An RE project is generally housed under a special purpose vehicle (SPV) incorporated for the specific purpose of undertaking the project, which normally has no pre-existing businesses, rights or liabilities except for the ones related to the project it is undertaking. In this structure, the assets of the renewable project are ring-fenced and can be securitised in favour of the lenders.
The principal participants in a project finance transaction typically involve the following parties:
- lender or lenders who lend for the purposes of project development;
- borrower (i.e., the SPV), who avails the loan;
- lenders' agent, appointed by the lenders in a syndicated financing to act on their behalf;
- security trustee, who will hold the security on behalf of and for the benefit of the lenders – usually when the security package needs to be created in favour of a group of lenders or a non-resident lender;
- arranger, who in case of a syndicated loan facilitates or arranges for the loan. Often the lead bank acts as an arranger; and
- promoter (entity holding the shares of and controlling the borrower), who will provide certain project-related undertakings such as an obligation to provide cost overrun support to the SPV as well as a pledge over the shares of the SPV.
The SPV, while availing project finance, will typically enter into a variety of documentation including:
- the loan agreement between the lender and the SPV, which is the primary document governing the terms of the loan;
- security documentation basis, in which security over the project assets is created and includes a combination of a mortgage over immovable properties, hypothecation over movable properties and pledge on the shares of the SPV by the promoter; and
- undertaking from the promoter or a corporate guarantee guaranteeing, among others, the liabilities of the SPV and cost overrun support.
Depending on the structure, other documentation may also be required. For example, if a security trustee or a lender's agent is appointed, then a security trustee agreement or lender's agent agreement will also be entered into.
RE projects in India may be financed by domestic or non-resident lenders. Non-resident lenders need to be residents of a country compliant with the Financial Action Task Force or International Organisation of Securities Commission in order to be eligible to lend in compliance with the Reserve Bank of India's (i.e., India's central bank) (RBI) guidelines on External Commercial Borrowings (ECB).44 Multilateral financial institutions such as the International Finance Corporation and Asian Development Bank, etc. can also lend in accordance with the ECB guidelines.
Generally, for domestic lenders, the tenor of debt for the purposes of infrastructure development (including RE projects) is for a lengthy term (typically 15–20 years) to ensure that the debt repayment can be actualised during the operational phase of the project. The non-resident lenders need to ensure that the loan meets the minimum average maturity requirement as applicable to the loan under the ECB guidelines.
To promote development of RE projects, the RBI has mandated that domestic lenders, as part of priority sector lending, extend a certain prescribed percentage of loans out of their total lending for RE projects such as biomass-based power generators, windmills and micro-hydel plants.45 Further, for loans from non-resident lenders, approval of the RBI (which is typically required) will not be required if the loan amount is up to US$750 million per financial year and complies with the ECB guidelines.46
ii Power purchase
There is a robust market for power purchase from RE projects in India, both by government entities, as well as by commercial and industrial (C&I) consumers. The key RE purchasers in India are the following.
State distribution licensees
Power generated from a power plant may be sold to distribution licensees (either directly or through a government intermediary procurer). In such case the tariff is either:
- 'determined' by the relevant SERC – this process occurs periodically and a feed-in tariff for a specific period (known as a 'control period') is established; or
- 'adopted' by the relevant electricity regulatory commission (where developers have been selected on the basis of tariff-based competitive bidding).
In case of an intermediary procurer, such intermediary procurer enters into a PPA with the producer and in turn sells the power to the distribution licensees through a power sale agreement on a pass-through basis and levies a trading margin on the distribution licensee for this arrangement.
Third party and captive open access consumers
Electricity generated from a power plant may be sold directly to captive consumers and third parties, at mutually agreed rates, through open access, i.e., by using the transmission network of the transmission utility or the distribution network of the distribution licensee in whose area the purchaser is located. In that context, the EA 2003 requires transmission utilities and distribution licensees to provide non-discriminatory access to their networks for use by power generators and consumers on payment of certain charges known as open access charges.47
Rooftop and distributed solar customers
Please refer to Section VI for an analysis of the rooftop and distributed solar segment in India.
Sale on the power exchanges
Generators may choose to sell power generated from their project on power exchanges in India. This sale of power is governed by the CERC (Power Market) Regulations, 2010.48 All transactions are based on standardised contracts with the power exchange as counterparty.
Additionally, there is also a market for renewable energy certificates (RECs). To enable 'obligated entities' to meet their renewable purchase obligation (RPO) (as discussed in Section III.i), the government has introduced a voluntary opt-in market mechanism – REC trading49. REC represents the power generated by RE as a primary source. The traits of REC are unbundled from the electric power produced, and both are sold or purchased separately in India. RECs are only allowed to be traded on the power exchanges. Obligated entities can fulfil their RPO by purchasing RECs in accordance with the prevailing regulations.
If a producer chooses to remain out of the REC system, it may register itself with other voluntary environmental attribute tracking systems. The International REC Standard (i-REC Standard) is one such international non-profit foundation that facilitates the purchase and sale of renewable electricity.50 However, the i-REC Standard cannot be used by C&I consumers in India to meet domestic RPO requirements.
iii Non-project finance development
While larger projects are typically funded through project financing, smaller projects (especially rooftop projects) may be funded by way of inter-company loans or balance sheet financing.
Distributed and residential renewable energy
The government of India has set an ambitious target of reaching 40GW of installed rooftop solar capacity by 2022 to strengthen the grid, reduce land requirements and improve energy security.51 According to market sources, the total capacity of rooftop installation in India surpassed 5GW at the end of 2020 with 719MW being added in 2020.52
To encourage rooftop projects, MNRE has issued programmes53 aimed at providing financial assistance for setting up rooftop solar plants and incentives to distribution licences for installing additional grid-connected rooftop capacity.54 However, one of the recent setbacks for rooftop solar in India was the regulatory change mandating gross metering for rooftop solar projects of loads above 10kW.55 This limit is proposed to be increased to 500kW; however, the amendment is still in draft form.56 The proposal is that the excess electricity from rooftop projects above 10kW or 500kW (as relevant) will be purchased by state distribution licensees at a fixed feed-in tariff rate determined by the SERCs, reducing the commercial viability of rooftop projects.
There are currently two prevailing business models for the installation of solar rooftop projects in India:
- OPEX (operational expenditure) model: the developer develops and installs the rooftop solar system at its own cost and sells power to the rooftop owner or occupier through a PPA to recover the costs incurred, plus profit. The developer retains ownership of and operates and maintains the rooftop solar system, and is granted access to the rooftop by the owner through a registered contractual right of way, license or lease.
- CAPEX (capital expenditure) model: the rooftop owner or occupier owns the rooftop solar system and bears capital expenditure for installation of a rooftop solar system, whereas the developer merely acts as an engineering, procurement and construction (EPC) or operation and maintenance (O&M) contractor.
The key Indian players in the distributed and residential RE sphere include CleanMax, Tata Power Solar and Fourth Partner Energy which, as of 2020, accounted for approximately 47 per cent of the total rooftop installations.57
Renewable energy supply chains
India's RE sector is backed by a strong manufacturing base owing to entities such as Adani Group, Tata Power, Vikram Solar, ReGen Powertech, Vestas India etc. However, as a result of cost factors, Chinese imports still constitute approximately 80 per cent of Indian solar cells and modules requirement.58
Previously, tenders issued under various government schemes contained a domestic content requirement (DCR) mandating the use of domestically manufactured modules and cells for solar projects. However, after the World Trade Organization (WTO), in 2016, held India's DCR requirement to be in breach of international trade rules, India ceased to impose DCR measures that were inconsistent with the WTO's findings59.
Government support policies to encourage domestic production and procurement include:
- The MNRE issued guidelines for enlistment of eligible models and manufacturers of solar cells and modules complying with certain standards and issued the 'Approved List of Modules and Manufacturers' (ALMM) for solar projects in India.60 Only the modules and manufacturers listed in the ALMM will be eligible for use in government, government-assisted projects and projects under government schemes and programmes installed in India. Presently, only Indian manufacturers have been included in this list, which was issued on 10 March 2021.61 However, the list will be updated as and when other manufacturers and modules are tested and approved by MNRE.
- MNRE, on 9 March 2021, imposed a basic customs duty of 40 per cent and 25 per cent on the import of solar modules and solar cells with effect from 1 April 2022.62 The customs notification for such customs duty is awaited.
- In April 2021, the MNRE approved the 'Production-Linked Incentive Scheme' in the high-efficiency solar modules sector, rewarding manufacturers for higher efficiencies in solar modules and sourcing their materials from domestic markets.63 ReNew Power has tapped into this scheme to set up its solar cells and modules manufacturing unit in Gujarat in May 2021.64
In view of the globalised supply chain for RE equipment and technologies, the Indian government has also formed foreign alliances and released various trade policies including:
- International Solar Alliance (ISA) under the Paris Declaration65 with 75 signatory countries. An Indian public sector undertaking, NTPC Limited, has already entered into project management consultancy contracts for developing solar parks and providing consultancy services in ISA's member countries from Africa.66
- The comprehensive connectivity partnership with the European Union in May 2021 to collaboratively support standards, regulatory environment and concrete infrastructure projects and to implement the EU–India Clean Energy and Climate Partnership.67
Other key considerations
i Operation and maintenance (O&M)
Typically, in India, O&M of an RE project is undertaken through a third-party contractor, who, usually, is the same as the EPC contractor. Nowadays, there is a trend for larger independent power producers to carry out the O&M activities in-house. Entities also sometimes enter into asset management agreements where a project manager is appointed for managing the techno-commercial and operational issues for the project.
ii Multi-technology developments
Technology such as robotics and tracker systems are being more commonly implemented for Indian projects nowadays. In fact, in April 2021, one of India's largest independent power producers, ReNew Power, announced that it has signed a deal with an Israeli firm Airtouch Solar to supply and deploy water-free cleaning robots for solar panels.68
Another interesting development is floating solar power plants, which are an alternative to ground-mount solar plants that entail installation of solar units on water bodies and large reservoirs. While floating solar power plants have been around in India since 2014, currently India's and the World's largest floating solar power plant69 of 600MW is in discussion to be set up on the Omkareshwar Dam in Madhya Pradesh.
iii M&A landscape in India
Despite the covid-19 pandemic, India has experienced a fair amount of M&A deal activity in 2020.
For under-construction utility projects selling power to distribution licensees, the standard PPAs typically contain a restriction on the change in 'controlling shareholding'70 of the SPV undertaking the project until some years (usually one to three years) after the commercial operations' date of the project. Due to such restrictions, investors tend to acquire a 'non-controlling stake' in the SPV until the lock-in period expires, following which they acquire the remaining shareholding of the SPV. Another structuring method is that the investor does not invest directly in the SPV, but operates at the parent level, so as to avoid such restriction altogether. However, the more recent PPAs now also contain a restriction on the promoters ceding 'control'71 of the 'bidding entity' (which in many cases is the promoter of the SPV), thereby creating a two-level lock-in.
For operational projects, if the timeline for the change in shareholding restrictions has elapsed, standard PPAs allow the parent company to transfer the shares of the SPV to another entity.
iv Repowering and decommissioning
Under the Competitive Bidding Guidelines, power producers are free to re-power their plants during the PPA duration. Generally, bid documents in India allow repowering subject to grid stability, fulfilment of the AC capacity and the procurer's first right to purchase excess generation. However, the Competitive Bidding Guidelines and standard bid documents do not specifically contemplate any decommissioning procedure upon expiry of the PPA.
Conclusions and outlook
With the advent of the regulatory pushes by the central and state governments towards RE coupled with the 100 per cent foreign direct investment allowed, the interest from investors, including foreign investors, can only be expected to increase in the near future. The governmental focus, in line with India's commitment under the Paris treaty, is on periodic and sustained bidding of renewable projects of different technologies. India has been contemplating various forms of RE that are different from the usual solar and wind sources that have been around for a while. Examples of such new and exciting forms of RE include hydrogen, electric vehicles, storage projects and round-the-clock projects.
While India's RE targets are certainly ambitious, the government, through its policies, amendments and subsidies has been making progress in the right direction to ensure that such targets are within reach.
1 Amar Narula is a partner, Saachi Kapoor is a senior associate and Atyotma Gupta is an associate at Trilegal.
2 The Constitution of India, 1950, Seventh Schedule, List III (Concurrent List), Entry 38.
3 id., Article 254.
5 id., regulation 2(1)(y).
6 Ministry of Power, Office Memorandum (Measures to Promote Hydro Power Sector), Reference Number F. No. 15/2/2016-H-I (Pt.), dated 8 March 2019, available at https://powermin.gov.in/sites/default/files/webform/ notices/Measures_to_Promote_Hydro Power_Sector_0.p df.
7 MNRE, Annual Report 2020-21, available at https://mnre.gov.in/img/documents/uploads/file_f-16185641412 88.pdf.
10 MNRE, Office Memorandum (Monthly Summary for the Cabinet for March 2021), Reference No. 147/1/2021 P&C, dated 13 April 2021, available at https://mnre.gov.in/img/documents/uploads/file_f-1618481027521.pdf.
11 MNRE, Office Memorandum (Time Extension in Scheduled Commissioning Date of Renewable Energy (RE) Projects considering disruption because of the lockdown that was a result of the covid-19 pandemic), Reference No. 283/18/2020-GRID SOLAR, dated 13 August 2020, available at
https://mnre.gov.in/img/documents/uploads/file_f-1597312336575.PDF. Earlier office memoranda were issued on 17 April 2020 (available at https://mnre.gov.in/img/documents/uploads/file_f-1587398024891.pdf) and 30 June 2020 (available at https://mnre.gov.in/img/documents/uploads/file_f-1593516228866.pdf) which were subsequently superseded by this office memorandum.
12 MNRE, Office Memorandum (Time Extension in Scheduled Commissioning Date of Renewable Energy (RE) Projects Considering Disruption as a Result of the Second Surge of the Covid-19 Pandemic), Reference Number F. No. 283/18/2020-GRID SOLAR, dated 12 May 2021, available at
13 MNRE, Guidelines for Tariff Based Competitive Bidding Process for procurement of power from Grid Connected Wind Solar Hybrid Projects — Reg, Reference Number F. No. 238/78/2017-Wind, dated 14 October 2020, available at https://mnre.gov.in/img/documents/uploads/file_f-1603290789230.PDF.
14 id., para. 3(ii).
15 MERC, Order 134 of 2020, Case filed by the Tata Power Company Limited (Distribution) seeking approval for levying 'Green Power Tariff' to supply Renewable Energy to consumers opting for 100 per cent green energy for meeting their entire demand, dated 22 March 2021.
16 Supreme Court of India, IA No. 85618 of 2020 in Writ Petition (Civil) No. 838 of 2019, MK Ranjitsinh & Ors v. Union of India, dated 19 April 2021, available at https://main.sci.gov.in/supremecourt/2019/20754/20754_ 2019_31_1502_27629_Judgement_19-Apr-2021.pdf.
17 See: https://pib.gov.in/PressReleasePage.aspx?PRID=1696498 and https://mnre.gov.in/img/documents/uplo ads /file_f-1612941710983.pdf.
19 See: www.business-standard.com/article/companies/adani-green-buys-sb-energy-from-softbank-and-
20 See: www.livemint.com/companies/news/actis-eyes-majority-stake-in-fortum-s-solar-projects-
21 See: https://economictimes.indiatimes.com/mf/mf-news/edelweiss-infra-fund-snaps-up-74-stake-in-engie-groups-india-solar-assets/articleshow/81700737.cms.
22 See: https://mercomindia.com/shv-energy-acquires-majority-stake-in-distributed-solar-
23 See: www.blueleafenergy.com/press/news/blueleaf-energy-enters-indias-solar-energy-market-acquisition-
24 Electricity Act, 2003, Section 3(2).
25 id., Section 3(4).
26 Ministry of Power, Notification No. 23/23/2018-R&R, Preparation of draft National Electricity Policy 2021, dated 27 April 2021, available at https://powermin.gov.in/sites/default/files/webform/notices/ Invitingsuggestions _on_draft_NEP_2021_0.pdf.
27 Ministry of Power, Notification No. 42/6/2011-R&R (Vol-VIII), Proposed amendment to Electricity Act, 2003 – regarding, dated 17 April 2020, available at https://powermin.gov.in/sites/default/files/webform /notices/Draft_Electricity_Amendment_Bill_2020_for_comments.pdf.
28 Electricity Act, 2003, Section 63.
29 id., Section 62.
30 Ministry of Power, Resolution No. 23/2/2005-R&R (Vol-IX), National Tariff Policy, para. 6.4(2).
31 Ministry of Power, Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Solar PV Power Projects, Resolution Number No. 23/27/2017-R&R—1, dated 3 August 2017, available at https://mnre.gov.in/img/documents/uploads/62f71161a2f5482bbaa07cb77abb7258.pdf.
32 Ministry of Power, Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Wind Power Projects, Resolution Number No. 23/54/2017-R&R, dated 8 December 2017, available at http://18.104.22.168/sites/default/files/schemes/guideline-wind.pdf.
33 MNRE, Guidelines for Tariff Based Competitive Bidding Process for procurement of power from Grid Connected Wind Solar Hybrid Projects — Reg, Reference Number F. No. 238/78/2017-Wind, dated 14 October 2020, available at https://mnre.gov.in/img/documents/uploads/file_f-1603290789230.PDF.
34 Ministry of Power, Guidelines for Tariff Based Competitive Bidding Process for Procurement of Round-The Clock Power from Grid Connected Renewable Energy Power Projects, complemented with Power from Coal Based Thermal Power Projects, Reference Number No. 23/05/2020-R&R.—1, dated 22 July 2020, available at https://mnre.gov.in/img/documents/uploads/file_f-1595577684752.pdf.
35 See: Scheme and Guidelines for forwarding proposals for financial support to Public Private Partnership in Infrastructure under the Viability Gap Funding Scheme of GOI – Notification dated 7 December 2020, available at https://dea.gov.in/guideline.
37 EA, 2003, Sections 39, 40, 42.
38 National Tariff Policy, 2016, para. 6.4(5).
42 Energy Storage System Roadmap for India: 2019-2032, India Smart Grid Forum, dated 6 August 2019, available at https://niti.gov.in/sites/default/files/2019-10/ISGF-Report-on-Energy-Storage-System-%28ESS%29-Roadmap-for-India-2019-2032.pdf.
43 Central Pollution Control Board, Notification No. B-29012/ ESS (CPA)/ 2015-16, dated 7 March 2016, available at www.indiaenvironmentportal.org.in/files/file/Final_Directions.pdf.
44 Reserve Bank of India, Reference No. RBI/FED/2018-19/67, Master Direction – External Commercial Borrowings, Trade Credits and Structured Obligations, dated 26 March 2019, available at, www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=11510.
45 Reserve Bank of India, Reference No. RBI/FIDD/2020-21/72, Master Directions – Priority Sector Lending (PSL) – Targets and Classification, dated 4 September 2020, available at www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=11959#Renewable_Energy.
46 Reserve Bank of India, Reference No. FEMA.3(R)/2018-RB, Foreign Exchange Management (Borrowing and Lending) Regulations, 2018, dated 17 December 2018, available at https://rbi.org.in/Scripts/BS _FemaNotifications.aspx?Id=11441.
47 EA, 2003, Sections 40 and 42.
48 Presently, there are two power exchanges in India, Power Exchange of India Limited (PXIL) and the Indian Energy Exchange Limited (IEX), both of which are registered under the mentioned regulations. The CERC has also recently approved the registration of a third power exchange, named as Pranurja Solution Limited vide its order dated 12 May 2021 available at www.cercind.gov.in/2021/orders/287-MP-2018_F.pdf.
49 CERC, Reference No. F. No. L-1/196/2015, Approval of modification of REC Procedures, dated 16 March 2018, available at www.recregistryindia.nic.in/pdf/REC_Procedures.pdf.
53 MNRE, Order Number 318/331/2017-GCRT Division, Launch of Phase II of the Grid Connected Rooftop Solar Programme for achieving cumulative capacity of 40,000 MW from Rooftop Solar (RTS) Projects by the year 2022, dated 8 March 2019, available at https://mnre.gov.in/img/documents/uploads/c48d969074544 005bfff0fcd6b236e9a.pdf.
55 Ministry of Power, Resolution No. GSR 818(E), Electricity (Rights of Consumers) Rules, 2020, available at https://powermin.gov.in/sites/default/files/uploads/Consumers_Rules_2020.pdf.
56 Ministry of Power, Resolution No. 23/05/2020-R&R, Draft Electricity (Rights of Consumers) (Amendment) Rules, 2021, Reg., dated 9 April 2021, available at https://powermin.gov.in/sites/default/files/webfo rm/notices /Draft_Electricity_Right_of_Consumers.pdf.
58 See https://energy.economictimes.indiatimes.com/news/renewable/india-imported-solar-power-
59 World Trade Organization, DS456, India — Certain Measures Relating to Solar Cells and Solar Modules.
60 MNRE, Office Memorandum Number 28315412018-GRID SOLAR, Guidelines for enlistment under Approved Models and Manufacturers of Solar Photovoltaic Modules (Requirements for Compulsory Registration) Order, 2019, dated 28 March 2019, available at https://mnre.gov.in/img/documents/uploads/209841a146974a08860f 86ebe31a440d.pdf.
61 MNRE, Office Memorandum Number 28315412018-GRID SOLAR – Part(l), Approved Models and Manufacturers of Solar Photovoltaic Modules (Requirement for Compulsory Registration) Order, 2019 – Implementation – Reg, dated 10 March 2021, available at https://mnre.gov.in/img/documents/uploads/file_f-1615380939218.pdf.
62 MNRE, Office Memorandum Number 283/3/2018-GRID SOLAR, Imposition of Basic Customs Duty (BCD) on Solar PV Cells & Modules/ Panels, dated 9 March 2021, available at https://mnre.gov.in/img/documents/ uploads/file_f-1615355045648.PDF.
66 See https://energy.economictimes.indiatimes.com/news/power/ntpc-engaged-as-pmc-by-togo-
for-300-mw-solar-projects/73718937 and https://mercomindia.com/ntpc-invites-bids-for-solarization/.
70 While the definition of controlling shareholding may differ from PPA to PPA, it is usually along the lines of '50% of the voting rights and paid-up share capital'.
71 While the definition of control may differ from PPA to PPA, it is usually along the lines of 'ownership, directly or indirectly, of more than 50% of the voting shares of such Company or right to appoint majority Directors'.