“The Energy Regulation and Markets Review” is a prestigious publication that provides insights into energy regulation and markets in various jurisdictions. The India chapter authored by Neeraj Menon, partner and head of Trilegal’s Energy, Infrastructure and Natural Resources team, and Akshay Shandilya, a senior associate at Trilegal, highlights the large-scale transformation of the Indian economy and the focus on energy security.
The chapter emphasizes the Indian government’s efforts to improve the bankability and operational efficiency of distribution companies (DISCOM) and promote new areas of growth in the energy sector, such as offshore wind energy and solar rooftop installations. India aims to achieve 500GW of renewable energy installed capacity by 2030 and produce at least 40% of its installed electricity capacity from non-fossil fuel sources.
The regulatory framework for the energy sector in India is governed by various ministries and regulatory bodies. The Ministry of Power and the Ministry of New and Renewable Energy play key roles in formulating policies and overseeing the power sector. The Electricity Act of 2003 is the primary statute governing the generation, transmission, distribution, and trading of electricity, with the National Electricity Policy and National Tariff Policy providing additional guidelines.
The chapter also discusses the regulation of nuclear energy by the Department of Atomic Energy and the Atomic Energy Regulatory Board. It highlights the challenges faced by the Ministry of Coal and Coal India Limited in ensuring an adequate supply of coal and the reforms undertaken to address these issues. The Ministry of Petroleum and Natural Gas, along with the Directorate General of Hydrocarbons and the Petroleum and Natural Gas Regulatory Board, regulates the petroleum and natural gas sectors in India.
The regulated activities in the energy sector include electricity generation, distribution, transmission, and trading, which require licenses from the relevant regulatory commissions. Exploration and production of oil and gas are separately licensed activities, with the government introducing the Hydrocarbon Exploration Licensing Policy (HELP) to streamline the licensing process. The policy allows for revenue-sharing arrangements and provides a framework for exploring various hydrocarbon resources in a single block.
The chapter also highlights the liberalization of the energy sector in India, with up to 100% foreign direct investment (FDI) permitted in various segments. While government companies and state electricity boards still play a significant role, private sector participation is increasing, especially in generation and distribution. The chapter mentions successful examples of privatization in certain areas, although the pace has been slow due to legacy liabilities and legal challenges.
Overall, the India chapter in “The Energy Regulation and Markets Review” provides insights into the regulatory landscape and market dynamics of the country’s energy sector, showcasing its commitment to renewable energy and addressing key challenges in the industry.
