HSA | Projects, Energy & Infrastructure Monthly Newsletter – December 2025 And January 2026

Ministry of Power (MoP) has notified the Electricity (Amendment) Rules, 2026 on Captive Generating Plants under Rule 3 of the Electricity Rules, 2005 on January 2, 2026

• The Ministry of Power (MoP), Government of India, has issued draft amendments to Rule 3 of the Electricity Rules, 2005, for stakeholder consultation, proposing a refined framework for captive generating plants and captive consumption to improve regulatory clarity and compliance under the Electricity Act, 2003.
• For the purposes of these rules, the Draft Rules clarify key concepts governing captive generating plants, including the following:

- By introducing flexibility in the "assessment period," captive users may opt for a financial year or any continuous period within a financial year for compliance verification, replacing a rigid annual assessment.

- By broadening the definition of "captive user," the Draft Rules recognise consumption of electricity either directly or through an Energy Storage System (ESS) used to store power generated from the Captive Generating Plant; further, where the captive user is a company, its subsidiaries, holding company, and fellow subsidiaries are deemed a single captive user, thereby legitimising group captive structures.

- By clarifying the concept of "ownership," the Draft Rules extend the scope beyond direct equity holding to include indirect ownership and control through subsidiaries and holding companies, aligning the regime with modern corporate and SPV-led project structures while retaining the emphasis on voting rights and control.

- By formally defining "Special Purpose Vehicle" (SPV), the Draft Rules restrict such entities to the sole business of owning, operating, and maintaining a generating station, and expressly treat SPVs as an Association of Persons for the purposes of captive power regulation.

• A power plant will qualify as a Captive Generating Plant only if at least 26% ownership is held by captive user(s) and a minimum of 51% of the electricity generated during the chosen assessment period is consumed for captive use, reaffirming the statutory captive thresholds under the Electricity Act, 2003. § For multi-unit generating stations, including SPV-owned projects, captive ownership and consumption are assessed only for the identified captive generating unit(s), requiring 26% proportionate equity and 51% consumption from those units alone, not the entire station. In captive power plants established by co-operative societies or associations of persons (AoP), compliance with ownership and consumption thresholds is assessed on an aggregate basis, while individual captive users may consume power only in proportion to their equity holding, except where a captive user holds 26% or
• more ownership, in which case the proportionate consumption restriction is inapplicable.
• Captive users are placed under a clear compliance obligation to satisfy the ownership and minimum captive consumption requirements throughout the assessment period, failing which the entire electricity generated by the plant will be treated as supply by a generating company, exposing it to applicable regulatory charges.
• The framework for verification of captive status is streamlined by assigning responsibility to State-designated nodal agencies where the plant and captive users are within the same State, while inter-State captive arrangements will be verified by the National Load Despatch Centre (NLDC) under a Central Government-approved procedure. § To ease cash-flow pressures, cross-subsidy surcharge and additional surcharge are not to be levied pending verification, subject to a declaration by the captive users; however, if captive status is ultimately denied, the full surcharge liability along with carrying cost, at the Late Payment Surcharge base rate under the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, becomes payable retrospectively.
• A statutory appeal mechanism is provided, allowing challenges to verification decisions before a Grievance Redressal Committee constituted by the Appropriate Government.

Ministry of New and Renewable Energy (MNRE) has notified the Revised Guidelines for series approval of SPV Modules for conducting testing in Test Labs for implementation of Solar Systems, Devices, and Components Goods Order on December 19, 2025

• The Ministry of New and Renewable Energy (MNRE) has notified the Revised Guidelines for series approval of SPV Modules on December 19, 2025. These guidelines aim to simplify and standardize testing of solar PV modules in test labs for compulsory BIS registration under the Solar Systems, Devices and Components Goods Order, 2025 (Quality Control Order, 2025).
• The guidelines apply to crystalline and thin-film modules, including bifacial types, while SPV modules in the 0.2–20 W range used in solar luminaries are currently excluded. Modules up to 5 W for solar lanterns will follow IS 16476 under Part I, and BIS will introduce a separate standard for 5-20 W modules in the future.
• A product family is defined by the maximum configuration of components or sub-assemblies and common design, construction, or essential parts. This allows representative testing of a few modules instead of every model, reducing costs and simplifying certification.
• For series approval, at least two modules each from the lower, median, and higher power classes of the family must be tested. The resulting test report will cover all models in that family, and product labels must be included in the report. If there are changes in the Bill of Materials (BOM), design, or manufacturing process, retesting is required.
• Where a median power class does not exist, the next higher class will be used. Efficiency verification may be skipped for the median module if the highest and lowest power modules pass the minimum efficiency criteria, provided their module areas are identical.
• For fewer-cell models, manufacturers can self-declare efficiency based on module area and output power, and submit relevant drawings to the testing lab for inclusion in the report.
• The guidelines ensure compliance with Indian Standards under the Quality Control Order, 2025, covering test scope, sampling, procedures, pass criteria, and marking requirements, thereby promoting uniformity, reliability, and ease of certification for solar PV modules across India.
• All PV modules must bear clear and indelible markings indicating the manufacturer, model, serial number, nominal wattage, efficiency, country of origin, and brand, with permissible tolerances and actual power output specified in accordance with applicable Quality Control Orders (QCO) and standards.
• These Revised Guidelines supersede the earlier series approval guidelines issued on August 13, 2025, updating procedures for testing, efficiency verification, and BIS registration of SPV modules under the Solar Systems, Devices and Components Goods Order, 2025 .

The Ministry of Power (MoP) has notified Supplementary Guidelines for payment of compensation concerning Right of Way (RoW) for transmission lines on December 15, 2025

• The Ministry of Power (MoP) has issued Supplementary Guidelines to streamline payment of compensation for Right of Way (RoW) for transmission lines, addressing delays in land valuation and submission of reports. § The guidelines now require the Market Rate Committee (MRC) to engage land valuers empaneled with the Insolvency and Bankruptcy Board of India (IBBI), preferably from the same State or adjoining States if local valuers are insufficient.
• The MRC must appoint three valuers simultaneously, one each nominated by the landowners' representative, the Transmission Service Provider (TSP), and the District Magistrate (DM), with the landowners' representative chosen from among the affected landowners.
• Nominated valuers are required to submit their reports in sealed envelopes directly to the DM within 21 days. Once all three reports are received, two reports are opened via a lottery system to determine the reference market rate.
• The reference market rate is determined such that if the difference between the two selected valuations is less than 20%, their average is taken; if the difference exceeds 20%, the reference rate is fixed at 10% above the lower valuation, or, if not agreed, as the average of the two lowest valuations, including the third valuer's report.
• This assessed reference market rate forms the basis for final RoW compensation determined by the MRC, and professional fees for valuers are to be equally borne by the TSP, forming part of the total compensation cost .

Central Electricity Regulatory Commission (CERC) issued Guidelines for Virtual Power Purchase Agreements dated December 24, 2025

• CERC has issued guidelines outlining the statutory framework for Virtual Power Purchase Agreements (VPPAs) with the intent to describe the statutory framework for VPPAs.
• A VPPA is defined as a non -tradable, non -standard delivery (NTSD) over -the - counter contract between a consumer (or designated consumer) and a renewable energy generating station (REGS), under which the consumer guarantees payment of an agreed strike price for the contract term.
• CERC has clarified that a VPPA is a bilateral, non -tradable and non -transferable over -the -counter contract between a REGS and a Consumer or Designated Consumer, with a minimum tenure of one year. Under a VPPA, the REGS sells electricity for physical delivery through modes permitted under the Electricity Act, 2003 or the Power Market Regulations, 2021 (PMR 2021), and such sale is not for RPO/RCO compliance.
• CERC permits Consumers or Designated Consumers to enter into bilateral OTC VPPAs with registered REGS on mutually agreed terms. While the electricity may be sold through permitted market modes for non -RPO/RCO purposes, the associated Renewable Energy Certificates (RECs) are transferred to the consumer for RPO/RCO compliance, and the VPPA remains non -tradable and binding for its full term, including upon change of ownership.
• Under a VPPA, the REGS sells electricity through permitted market modes, and any difference between the VPPA strike price and the market settlement price is settled bilaterally between the parties as per their agreed terms.
• REGS under a VPPA are eligible for RECs upon registration and must declare the contracted capacity to avoid double counting. Issued RECs are transferred to the Consumer or Designated Consumer, extinguished once used for RPO/RCO compliance, and any surplus can be carried forward for future compliance. The Consumer or Designated Consumer can thus use these RECs to meet their RPO/RCO obligations.
• Any disputes under a VPPA are to be resolved mutually between the parties in accordance with the contract terms.
• The framework ensures clarity on contract duration, registration, REC allocation, and payment settlement, promoting accountability and transparency. Overall, the CERC framework balances the interests of generators and consumers, supporting growth in the renewable energy market.

Third Amendment to the Rajasthan Electricity Regulatory Commission (Grid Interactive Distributed Renewable Energy Generating Systems) Regulations, 2025

• The Rajasthan Electricity Regulatory Commission (RERC), through its notification dated October 13, 2025, has issued the Third Amendment to the Grid Interactive Distributed Renewable Energy Generating Systems Regulations, 2021. Exercising powers under Section 181 read with Sections 61, 66, and 86(1)(e) of the Electricity Act, 2003, this amendment formally modifies the Principal Regulations to democratize renewable energy adoption across the state.
• The amendment significantly broadens the scope of distributed renewable energy by introducing definitions for "Virtual Net Metering (VNM)," "Group Net Metering (GNM)," and "Lead Consumer" under Regulation 2.1. It expands the permissible arrangements under Regulation 3.2 to officially include Group Net Metering, Virtual Net Metering, Peer -to -Peer (P2P) Trading, and Plug -and -Play solar systems alongside existing Net Metering and Net Billing mechanisms. Regulation 19(A) further lays the groundwork for future technologies, empowering the Commission to implement Plug -and -Play Solar Systems and blockchain -based P2P trading.
• At its core, the amendment seeks to expand solar installations for households, housing societies, and government buildings by officially recognizing Group Net Metering (GNM) and Virtual Net Metering (VNM). Under Regulation 12.6(A).4, these arrangements are applicable for systems sized between 1 kW and 1 MW. Projects exceeding 1 MW must proceed under the Commission's tariff regulations and the Green Energy Open Access framework.
• Regulation 12.6(A).2, systems can be Self -owned, installed through RESCO models, or developed by Utility -led aggregators. However, Regulation 7.7 clarifies that third -party sales are not allowed under these arrangements, except for the permitted RESCO models.
• Under the new GNM framework governed by Regulation 12.6(A).12, surplus energy from a main system is adjusted among a consumer's other service connections based on a declared priority list, allowing a single entity to optimize energy use across multiple facilities. Conversely, for VNM as per Regulation 12.6(A).13, energy credits are shared among participating consumers (such as apartment residents) via an agreement/MoU, with unused year -end credits purchased by the DISCOM at prevailing rates.
• To ensure fair access, Regulation 4.1 mandates that DISCOMs must offer these provisions on a non -discriminatory and 'first -come -first -serve' basis. Furthermore, Regulation 4.2 ensures inclusivity by allowing consumers with pending arrears to participate upon depositing the disputed amount as per Section 56 of the Electricity Act, and explicitly permits Government connections to participate even with conditional arrears.
• To protect local grid stability, Regulation 12.6(A).5 stipulates that the maximum installed capacity to be installed at consumer premises under Group net metering arrangement shall also be subject to the cumulative capacity of the relevant Distribution Transformer. Additionally, Regulation 12.6(A).7 allows GNM consumers to upgrade or enhance capacity within permissible limits after following due procedure.
• The amendment introduces significant timeline reforms under Regulation 8.8. Applications for domestic systems up to 10 kW are now "Deemed Technically Feasible" without a study. For other categories, DISCOMs must complete feasibility studies within 15 days for existing connections and 30 days for new connections, with connectivity granted within 30 days of approval.
• A major regulatory shift regarding financial viability is introduced via Regulation 15. Regulation 15.4 provides Domestic consumers under VNM/GNM a 100% exemption from wheeling, banking, transmission charges, and cross-Subsidy surcharge (CSS). Non-domestic self-owned systems are exempt from banking and transmission charges under Regulation 15.5, though wheeling charges apply if installed off-site. For Non-domestic RESCO projects, Regulation 15.6 provides exemptions from banking and transmission charges but levies 50% of the applicable CSS and additional surcharge.
• To encourage grid stability through storage, Regulation 15.7 introduces a direct financial incentive: a 75% waiver on wheeling charges is granted if a Battery Energy Storage System (BESS) of at least 5% of the solar capacity is installed. This waiver increases by 1% for every 1% increase in BESS capacity beyond the base 5%, capped at a 100% waiver for storage exceeding 30% of solar capacity. Technical standards for BESS are defined under Regulation 10.15 and AnnexureVII.

Second Amendment to the Andhra Pradesh Electricity Regulatory Commission (Terms and Conditions of Open Access) Regulation, 2005 (Regulation No. 08 of 2025)

• The Andhra Pradesh Electricity Regulatory Commission (APERC) through its notification dated December 08, 2025, has issued the Second Amendment to the Open Access Regulations, 2005, exercising its rule-making powers under Section 181(1) read with Sections 39, 40, 42, and 86 of the Electricity Act, 2003. The amendment formally modifies the Principal Regulations and applies statewide from the date of publication.
• The amendment primarily revises procedural requirements governing grid connectivity and energy balancing, specifically to align with the Government of Andhra Pradesh's Integrated Clean Energy Policy, 2024. This policy aims to achieve 50% electric power capacity from non-fossil fuel sources by 2030 and net-zero emissions by 2047.
• A significant change has been introduced under Clause 9.2, where a new proviso mandates that grant of grid connectivity for Clean Energy Projects shall be based on the progress and recommendation of the State Nodal Agency. This alignment ensures that connectivity is granted in accordance with specific government orders and technical compliance standards.
• Clause 19.4 has been substituted in its entirety to clarify Energy and Demand Balancing rules. For open access consumers, drawl is strictly restricted to the sanctioned capacity, while for scheduled consumers, Long-term open access may be granted beyond the contracted maximum demand provided the metering infrastructure is suitably upgraded.
• For open access generators, the amendment specifies that injection into the grid is limited to the sanctioned capacity. Notably, for solar generators, the inverter capacity rather than the DC capacity is now the definitive measure for granting open access. Any energy injected by suppliers in excess of technical limits or CMD will be treated as inadvertent energy.
• In cases where open access capacity is sought beyond existing technical limits or contracted maximum demand, the open access user is responsible for the expenditure required for strengthening or augmenting the network and upgrading metering infrastructure, in addition to paying development charges.
• The amendment simplifies the integration of renewable energy by allowing Green Energy Open Access consumers to enter multiple contracts with various RE sources, while maintaining strict technical drawl limits during any 15-minute time block to ensure grid stability.

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