White Paper On Renewable Energy In India – November 2025

LEGISLATIVE AND REGULATORY DEVELOPMENTS 2025

• Through the Union Budget 2025, the Government of India (GoI) announced the Viksit Bharat mission, with a target of achieving 1800 (one thousand eight hundred) GW of renewable energy capacity by 2047.
• Proposed amendments to Electricity Act, 2003 (Electricity Act), inter-alia to empower Central or State electricity regulatory commissions (ERCs) to determine tariffs suo moto where there has been a delay by distribution companies in filing of tariff petitions; to include energy storage systems (ESS) within the definition of 'power systems'; prescribe renewable purchase obligations on a national level and quantified penalties for failure; and to grant discretion to ERCs to determine eligibility criteria for captive generating plants.
• Proposed amendments to Electricity Rules, 2005 (Electricity Rules), inter-alia to expand the definition of 'ownership' in a captive generating plant; and restricting captive consumption benefit to a maximum of 110% (one hundred ten percent) of the proportionate entitlement of each captive user.
• Third Amendment to CERC (Connectivity and General Network Access to the Inter-State Transmission System) Regulations, 2022 which introduces significant changes to the procedures involved in the grant of connectivity, its withdrawal and relinquishment, the key conditions for grant of connectivity and general network access (GNA), change of control restrictions, etc.
• The Karnataka High Court in Brindavan Hydropower Pvt. Ltd. v. Union of India,¹ struck down the central Green Energy Open Access Rules as ultra vires the Electricity Act, 2003.
• Fourth Amendment to CERC (Inter-State Transmission Charges and Losses) Regulations, 2020, revising the earlier category of exemptions for battery ESS projects.
• Introduction of List-II for solar PV cells under the Approved List of Models and Manufacturers List, compliance with which will be mandatory from June 1, 2026.
• Introduction of Green Hydrogen Certification Scheme of India, 2025 which provides a national framework to certify hydrogen as 'green'.
• The Ministry of New and Renewable Energy (MNRE) issued the Scheme Guidelines (Revised) for Implementation of Pilot Projects for Production and Use of Green Hydrogen Using Innovative Methods/Pathways in the Residential, Commercial, Localized Community, Decentralized/Non-Conventional, Applications, Including Any Sector or Technology Not Covered in Previous Mission Schemes.
• Virtual Power Purchase Agreements (VPPAs): Introduction of Draft Guidelines for Virtual Power Purchase Agreements, 2025 making VPPAs non-transferable specific delivery contracts for facilitating renewable consumer obligations.
• Fourth Amendment to the CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2020 which revised the earlier category of exemptions from payment of interState transmission system (ISTS) charges.
• The Nuclear Power Corporation of India has initiated inclusion of private sector participants in the nuclear sector for the development of Bharat Small Reactors.
• Introduction of National Policy on Geothermal Energy, 2025 to enable the exploration and development of geothermal energy sources in India.

INTRODUCTION

At present, India has the 4th (fourth) largest renewable energy installed capacity globally² . As of June 30, 2025, India's energy mix constitutes a total of 242.78 (two hundred and forty two point seven eight) GW of renewable energy, including wind, solar, biomass, hydro, waste to energy, and nuclear sources³ . Along with the traditional renewable energy sources, India is also focusing on the development of emerging sources of renewable energy and emerging forms of technology, such as. green hydrogen, offshore wind energy, nuclear energy, and the integration of ESS with renewable energy generating plants.

India faces the challenge of maintaining its rapid economic growth while dealing with the impact of global climate change. While India's electricity sector has been predominated by fossil fuel-based sources such as coal, there is an increasing focus on the energy transition to clean energy sources. To intensify its actions towards its clean energy transition, India has been taking strides in the field of development of renewable energy. In this context, India has ratified the Paris Agreement and is thereby, obligated to submit Nationally Determined Contributions (NDCs). The updated NDCs to the United Nations Framework Convention on Climate Change in 2022 are to reduce emissions intensity of GDP by 45% (forty five percent) by 2030.

At the 26th (twenty sixth) session of the Conference of Parties held in Glasgow, United Kingdom, India announced its climate action plan – called the Panchamrit – which includes the 5 (five) key elements: (i) reaching a non-fossil fuel energy capacity of 500 (five hundred) GW by 2030; (ii) meeting at least 50% (fifty percent) of the energy requirements via renewable sources by 2030; (iii) reducing carbon emissions by 1 (one) billion tons by 2030; (iv) reducing carbon intensity below 45% (forty five percent) by 2030; and (v) achieving target of net-zero emissions by 2070. India has crossed the 200 (two hundred) GW (out of its targeted 500 (five hundred) GW generation capacity by 2030) mark of total renewable energybased electricity generation capacity as of October 10, 2024. Further, through the Union Budget 2025, the GoI has announced the Viksit Bharat mission, with a target of achieving 1800 (one thousand eight hundred) GW of renewable energy capacity by 2047. As part of the Viksit Bharat mission, the GoI has also set a target for 100 (one hundred) GW of nuclear power capacity, with a view to augment nuclear power generation in India through policy reforms and private sector participation.

The Ministry of New and Renewable Energy (MNRE), efforts towards creating a clean energy transition-based ecosystem are reflected in its initiatives aimed to advance the adoption of renewable energy technologies on a large scale, including: (i) the PM KUSUM Scheme, formulated to provide decentralized solar power plants, standalone solar pumps, and solarized agricultural pumps to farmers; (ii) the PM Surya Ghar Muft Bijli Yojana which subsidizes the installation of rooftop solar panels for households; (iii) the Ministry of Power (MoP) Guidelines for Installation and Operation of Electric Vehicle Charging Infrastructure, 2024, to set out a framework for electric vehicles (EVs) charging infrastructure in India, applicable to manufacturers, owners, and operators of such infrastructure; and (iv) the PM E-Drive Scheme, which promotes the adoption of EVs through subsidized electric twowheelers, three-wheelers, ambulances, and trucks.

The Ministry of Environment, Forest and Climate Change (MoEFCC) also launched the National Action Plan on Climate Change (NAPCC), in 2008 with the aim of enabling the country to adapt to the climate change and improving the sustainability of our development path. It focuses on maintaining a high growth rate which is essential for reducing the impacts of climate change. The NAPCC comprises of 8 (eight) national missions which focus on different areas such as adaptation and mitigation of climate change, energy efficiency and natural resource conservation. Under the NAPCC, the MoEFCC issued the National Mission for Enhanced Energy Efficiency.

ELECTRICITY SECTOR IN INDIA

The Electricity Act, 2003 is the parent legislation governing the electricity sector in India. The Electricity Act consolidated the various laws governing the electricity sector, such as, the Indian Electricity Act, 1910, the Electricity Supply Act, 1948 and Electricity Regulatory Commissions Act, 1998. The Electricity Act, inter alia, sought to create a more dynamic, relevant and robust framework for the development of the electricity sector, promoting competition, protecting interests of consumers, ensuring supply⁴ of electricity to all areas, regulating rationalisation of electricity tariff, ensuring access by all generating stations⁵ to the grid⁶ infrastructure on a non-discriminatory basis, providing impetus for development and growth of new technologies and ensuring transparent policies and promoting efficiency in the electricity sector.

Since the Electricity Act does not differentiate between energy generated from the conventional sources and energy generated from the renewable energy sources, the provisions of the Electricity Act do not provide a separate statutory framework for renewable energy generation. However, with a view to incentivise the augmentation of renewable energy capacity in the country, particularly for solar, wind and solar-wind hybrid generation, both the GoI and various State governments have issued several policies, schemes and guidelines. These policies, schemes and guidelines primarily set out the incentives that the relevant government authority offers to a renewable energy generator at the Union and State level, as may be applicable.

The Electricity Act does not define the term 'renewable energy', however, there are regulations issued under the Electricity Act and policies issued by the nodal agencies of the States which clarify the ambit of the term. The CERC (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2024 defines the term 'renewable energy' to mean "the electricity generated from renewable energy sources". The term 'renewable energy source' has been defined to include "sources of renewable energy such as hydro, wind, and solar, including its integration with combined cycle, biomass, biofuel cogeneration, urban or municipal waste, and such other sources as recognised or approved by the Union Government" and 'renewable energy project' has been further defined to mean "a generating station that produces electricity from renewable energy sources".

Draft Amendments to the Electricity Act and the Electricity Rules, 2005

1. Proposed amendments to the Electricity Act
   
   On October 9, 2025, the MoP issued the draft Electricity (Amendment) Bill, 2025 ("Draft Amendment") for public comments. The Draft Amendment proposes reforms to the power distribution sector in India, in order to address issues such as the financial burden on the power distribution sector, regulatory delays, and the adverse effect of cross-subsidies on Indian industries, and promote captive power generation, the clean energy transition, and energy storage.
   
   The Draft Amendment aims to advance efficiency by permitting Central or State ERCs, as the case may be, to determine tariffs suo motu in case of delayed filing of tariff petitions by distribution companies.
   
   Notably, the Draft Amendment recognises ESS within the framework of the Electricity Act and includes ESS within the definition of 'power system⁷', integrating ESS into the regulatory regime for planning, operations, and market framework for the electricity sector.
   
   Other key amendments proposed through the Draft Amendment include: (a) promotion of renewable sources by State governments through renewable purchase obligations (RPO) to be prescribed on a national level by the Central Government and quantified penalties for shortfall in meeting RPO obligations; (b) discretion granted to the Central or State ERCs to determine the eligibility criteria for captive generating plants; (c) prescribed timelines for adjudication of disputes before the Central or State ERCs; and (d) empowering the Central or State ERCs, as the case may be, to introduce and regulate market platforms, intermediaries, and market products, such as contracts-for-difference, electricity derivative contracts, and VPPAs.
2. Proposed amendments to the Electricity Rules, 2005 (Electricity Rules)
   
   The regulatory framework for captive generating plants, as contained in Section 9 of the Electricity Act and Rule 3 of the Electricity Rules, has also been proposed to be amended through a draft amendment to Rule 3(1) of the Electricity Rules, issued by the MoP on September 23, 2025.
   
   The proposed captive requirements, with an amended clause (c) are set out as below:
   
   1. A minimum of 26% (twenty six percent) of ownership in the captive generating plant;
   2. Minimum consumption of 51% (fifty one per cent) of the aggregate electricity generated by the captive generating plant; and
   3. In case of captive consumption by an association of persons, captive consumption benefit has been restricted to a maximum of 110% (one hundred and ten percent) of the proportionate entitlement of each captive user, with reference to their share in ownership of the captive generating plant.
   The condition in clause (c) replaces the earlier proportionality rule, which required captive users to consume not less than 51% (fifty one percent) of the aggregate electricity generated by the captive generating plant in proportion of their ownership, with a maximum variation of +/- 10% (ten percent). The proposed amendment to this provision places an upper limit on captive consumption benefit, which, when breached, would result in the excess consumption not qualifying as captive, and consequently, not qualifying for the benefits extended to captive consumers.
   
   The definition of 'ownership' in a captive generating plant is also proposed to be expanded to include direct or indirect proprietary interest and control over the captive generating plant through subsidiary companies.

Footnotes

1 Writ Petition no. 11235 of 2024

2 https://www.pib.gov.in/PressNoteDetails.aspx?id=155063&NoteI d=155063&ModuleId=3

3 https://www.pib.gov.in/PressReleasePage.aspx?PRID=2144627

4 Section 2(70) of the Electricity Act defines the term "supply", in relation to electricity, to mean "the sale of electricity to a licensee or consumer."

5 Section 2(30) of the Electricity Act defines the terms "generation station" or "station" to mean "any station for generating electricity, including any building and plant with step-up transformer, switchgear, switch yard, cables or other appurtenant equipment, if any, used for that purpose and the site thereof; a site intended to be used for a generating station, and any building used for housing the operating staff of a generating station, and where electricity is generated by water-power, includes penstocks, head and tail works, main and regulating reservoirs, dams and other hydraulic works, but does not in any case include any sub-station."

6 Section 2(32) of the Electricity Act defines the term "grid" to mean "the high voltage backbone system of inter-connected transmission lines, sub-stations and generating plants."

7 "Power system" has been defined as "all aspects of generation, transmission, distribution, and supply of electricity", including the following: (a) generating stations; (b) transmission or main transmission lines; (c) sub-stations; (d) tie-lines; (e) load dispatch activities; (f) mains or distribution mains; (g) electric supply lines; (h) overhead lines; (i) service lines; and (j) works.

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