India’s journey toward a greener, more sustainable energy economy is accelerating—and legal and regulatory reforms are at the heart of this transformation. The June 2025 edition of HSA Advocates’ Projects, Energy & Infrastructure Newsletter outlines key developments that show how India’s energy sector is evolving, both on paper and in practice.
From Virtual Power Purchase Agreements to Supreme Court judgments on “Change in Law” clauses, here’s a concise breakdown of what’s happening—and why it matters.
🌿 1. Virtual Power Purchase Agreements (VPPAs): The Future of Renewable Energy Procurement
The Central Electricity Regulatory Commission (CERC) has released draft guidelines for VPPAs, offering a new mechanism for companies to meet their Renewable Consumption Obligations (RCOs) without directly receiving electricity from green sources.
🔍 What is a VPPA?
A VPPA is a financial contract between a renewable energy generator and a consumer. It allows the buyer to:
- Pay a fixed price for green energy,
- While the electricity itself is sold on the market (Day-Ahead or Real-Time Market),
- And receive Renewable Energy Certificates (RECs) as proof of green energy usage.
Key Features:
- Non-tradable and long-term contracts.
- Bilateral price settlements between agreed VPPA price and market price.
- Consumers must report RECs to the REC Registry.
- Disputes to be resolved per contract terms.
This move complements India’s national goal of reaching 500 GW of non-fossil capacity, boosting flexibility and transparency in clean energy procurement.
🔋 2. Energy Storage: Power to the People
On June 11, 2025, the Ministry of Power proposed a draft amendment to Rule 18 of the Electricity Rules, 2005, which could radically expand access to Energy Storage Systems (ESS).
What’s Changing?
- Consumers, not just utilities, can now own and operate ESS—even if not physically located at their premises.
- These systems will still be treated as independent grid elements for dispatch and regulation.
- ESS capacity can be leased, rented, or sold to other users—including utilities and fellow consumers.
Why It Matters:
This democratization of energy storage creates new business models, enables peak-shaving, and enhances grid reliability—a crucial step for India’s decentralized energy vision.
⚙️ 3. State-Level Moves: Gujarat, Delhi, and Madhya Pradesh Lead
🟢 Gujarat: Streamlining Green Project Connectivity
The Gujarat Electricity Regulatory Commission (GERC) has released a draft procedure to connect renewable projects to the state’s power grid. Highlights include:
- Online applications via the “Akshay Urja Setu Portal.”
- Projects must physically submit originals within 7 days of applying.
- Non-transferable connectivity unless to a wholly owned subsidiary or parent.
- Delays in project commissioning can lead to penalties and cancellation.
🌇 Delhi: Net Metering Clarifications (Sixth Amendment, 2025)
Delhi has been a pioneer in rooftop solar and consumer-level renewable energy generation. On June 5, 2025, the Delhi Electricity Regulatory Commission (DERC) introduced the Sixth Amendment to its Group and Virtual Net Metering Guidelines, refining how energy credits are handled for Time-of-Day (ToD) and Non-ToD consumers.
🧾 What Changed?
The amendment modifies Clause 8(2)(c) and 8(2)(e) of the principal guidelines to align energy export accounting for all consumer categories.
Old Rule:
Energy credits during “off-peak” hours for ToD consumers and “normal” hours for Non-ToD consumers.
New Rule:
Now, credits will be uniformly treated as occurring during “normal” time blocks for both ToD and Non-ToD consumers.
⚙️ Why This Matters:
- Uniformity: Avoids mismatched or undervalued energy credits.
- Fairer Tariff Credits: Prevents undervaluation of solar exports during off-peak hours.
- Encourages Adoption: Makes Group and Virtual Net Metering more viable for housing societies, commercial users, and renters.
This micro-level adjustment enhances trust and predictability, making solar investments more appealing for a broader consumer base.
🔧 Madhya Pradesh: Tariff, Transmission, and Banking Updates
The MP Electricity Regulatory Commission (MPERC) has made sweeping changes:
- Tariff Exemptions: Allows skipping competitive bidding for strategic/urgent projects.
- Transmission Lease Charges: Must be reasonable and approved.
- Banking Reforms: Renewable energy banked each month must be used within the month—no carry-forward. Use during peak hours or deficit months is restricted.
- Wheeling Charges: More clarity on cost exclusions and cross-subsidy calculations.
⚖️ 4. Landmark Court Judgments
📌 Case 1: Jaipur Vidyut Vitran Nigam Ltd. vs. Adani Power Rajasthan Ltd.
Issue: Whether a new charge by Coal India Ltd. qualifies as a “Change in Law” under the PPA.
Ruling: The Supreme Court held that:
- The charge does qualify as a “Change in Law.”
- Compensation must begin from the date the event occurred, not from the date of legal recognition.
- This follows restitution principles—restoring the affected party to their original position.
✅ Impact: Strengthens the reliability of long-term PPAs and provides certainty for investors in energy infrastructure.
📌 Case 2: Guttaseema Wind Energy vs. APSPDCL
Issue: DISCOM refused to synchronize the remaining 60 MW of a wind project, citing delay.
Ruling: The Appellate Tribunal for Electricity (APTEL):
- Ruled in favor of the developer.
- Held that the entire project’s COD (Commercial Operation Date) was the date the first unit was synchronized.
- DISCOM’s termination was unjustified.
✅ Impact: Reinforces the sanctity of contract language and protects developers from arbitrary utility decisions.
💡 Conclusion: What This Means for the Energy Sector
India’s legal and policy environment is rapidly adjusting to meet the demands of a modern, low-carbon grid. These reforms:
- Enable financial innovation (VPPAs),
- Expand market access (consumer-owned storage),
- Protect contractual rights (Supreme Court & APTEL rulings), and
- Ensure transparent regulation (through clear procedural and accounting frameworks).
For stakeholders—from developers and investors to regulators and consumers—understanding these changes is crucial to navigating and contributing to India’s energy transition.
📚 References
- Central Electricity Regulatory Commission (CERC). (2025). Draft Guidelines for Virtual Power Purchase Agreements. As summarized in HSA Advocates, Projects, Energy & Infrastructure Monthly Newsletter – June 2025, pp. 1–2.
- Ministry of Power, Government of India. (2025, June 11). Draft Amendment to Rule 18 of the Electricity Rules, 2005 (Energy Storage Systems). As reported in HSA Advocates, Projects, Energy & Infrastructure Monthly Newsletter – June 2025, p. 2.
- Gujarat Electricity Regulatory Commission (GERC). (2025, May). Draft Procedure for Grant of Connectivity to Projects based on Renewable Energy Sources to Intra-State Transmission/Distribution System, 2025. HSA Advocates, Monthly Newsletter, pp. 2–3.
- Delhi Electricity Regulatory Commission (DERC). (2025, June 5). Group Net Metering and Virtual Net Metering for Renewable Energy (Sixth Amendment) Guidelines, 2025. Order No. F.3(620)/Tariff-Engg./DERC/2020-21/6846. As reported in HSA Advocates, Monthly Newsletter, p. 3.
- Delhi Electricity Regulatory Commission (DERC). (2025, June 2). Supply Code and Performance Standards (Seventh Amendment) Regulations, 2025. Order No. F.17(220)/DERC/Engg./2023-24/7898. Referenced in HSA Advocates, Monthly Newsletter, pp. 3–4.
- Madhya Pradesh Electricity Regulatory Commission (MPERC). (2025, June 11). Terms and Conditions for Determination of Transmission Tariff (Revision V) (First Amendment) Regulations, 2025. Notification No. MPERC/2025/1084. Referenced in HSA Advocates, Monthly Newsletter, pp. 4–5.
- Madhya Pradesh Electricity Regulatory Commission (MPERC). (2025, June 20). Co-generation and Generation of Electricity from Renewable Sources of Energy (Third Amendment) Regulations, 2025. ARG-35(III)(iii). Referenced in HSA Advocates, Monthly Newsletter, pp. 5–6.
- Madhya Pradesh Electricity Regulatory Commission (MPERC). (2025, June 20). Determination of Tariff for Supply and Wheeling of Electricity and Fixation of Charges (First Amendment) Regulations, 2025. ARG-17(I)(iv). Referenced in HSA Advocates, Monthly Newsletter, p. 6.
- Supreme Court of India. (2025, May 23). Jaipur Vidyut Vitran Nigam Ltd. vs. Adani Power Rajasthan Ltd. & Anr., Civil Appeal No. 4336 of 2025. Summarized in HSA Advocates, Monthly Newsletter, p. 7.
- Appellate Tribunal for Electricity (APTEL). (2025, May 29). Guttaseema Wind Energy Company Pvt. Ltd. vs. A.P. State Electricity Regulatory Commission & Anr., Appeal No. 235 of 2022. Summarized in HSA Advocates, Monthly Newsletter, pp. 8–9.
- HSA Advocates. (2025, June). Projects, Energy & Infrastructure Monthly Newsletter – June 2025. Retrieved from internal publication.
