INDIA Law and Practice Contributed by: Anupam Varma, Poonam Verma Sengupta, Sakshi Kapoor and Rajesh Jha, JSA
and consumption requirements and introducing a streamlined verification mechanism for captive status. • CERC ( Terms and Conditions of Tariff ) ( Second Amendment ) Regulations , 2026 : Introduced a sup- plementary tariff framework for co-located energy storage systems, providing regulatory certainty for investment in storage assets and enabling moneti- sation of storage services. • CERC ( Terms and Conditions for Renewable Ener- gy Certificates for Renewable Energy Generation ) ( First Amendment ) Regulations , 2026 : Introduced a framework for Renewable Energy Certificates (RECs) under VPPAs, expanded REC eligibility and revised certificate multipliers. • CERC Supplementary Tariff Framework for Co - Located Energy Storage , 2026 : Established a sup- plementary tariff framework for Integrated Energy Storage Systems co-located with thermal generat- ing stations or inter-state transmission systems. 1.7 Announcements Regarding New Policies The government and the CERC have announced sev- eral policy initiatives that, if implemented, are expect- ed to materially reshape the power sector. Key initia- tives include: • Draft National Electricity Policy , 2026 : Proposes a comprehensive overhaul of the National Electricity Policy, 2005, including greater renewable energy integration, expansion of nuclear capacity, deploy- ment of energy storage, introduction of capacity markets, establishment of Distribution System Operators and measures to improve distribution efficiency and grid reliability. • Pumped storage hydropower initiative : The MoP has announced a target of developing 100 GW of pumped storage capacity by 2035–36, recognising pumped storage as a critical resource for balancing renewable energy and enhancing grid flexibility. • National Green Hydrogen Mission and offshore wind programme : The Government continues to implement the National Green Hydrogen Mission targeting 5 million metric tonnes of green hydrogen production by 2030, alongside a roadmap for 37 GW of offshore wind capacity by 2030. • Capacity market framework : CERC has issued a staff paper proposing the introduction of capacity
markets to ensure long-term resource adequacy and incentivise the availability of generation capac- ity. • Market coupling : CERC has proposed amend- ments in the draft CERC (Power Market) (Second Amendment) Regulations, 2026, formally designat- ing GRID-INDIA as the Market Coupling Opera- tor, with the objective of introducing a uniform market-clearing price across power exchanges and improving market efficiency. • Draft Electricity ( Rights of Consumers ) Amendment Rules , 2026 : Propose a formal demand response framework and phased implementation of Time-of- Day tariffs, enabling greater consumer participation in demand-side management and grid balancing. 1.8 Unique Aspects of the Power Industry Concurrent Constitutional Status Electricity is a concurrent subject under the Seventh Schedule to the Constitution of India, meaning both Parliament and State Assemblies may legislate on it. This creates a layered legal and regulatory regime where central and state laws co-exist and applicable regulatory frameworks vary by state, a distinctive fea- ture requiring practitioners to navigate both central and state-level requirements for any single project. Scale and Growth Trajectory India is the third-largest producer and consumer of electricity in the world, with total installed capacity of 520.51 GW as of January 2026. India’s renewable energy sector added 22 GW of capacity in the first half of 2025 alone (56% year-on-year increase). By July 2025, approximately 50% of installed capacity came from non-fossil fuel sources, achieving a COP26 com- mitment five years ahead of the 2030 target. India’s solar power capacity has grown from 2.82 GW in 2014 to approximately 140 GW as of January 2026, a 42-fold increase. International Solar Alliance and Carbon Markets India leads the “One Sun, One World, One Grid” initia- tive under the International Solar Alliance, proposing a globally interconnected renewable energy grid.
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