Projects, Infrastructure And Energy Newsletter | March 2026

We are pleased to present the fifth edition of the Infrastructure, Projects and Energy Newsletter. This edition captures the major judicial pronouncements and key regulatory developments across the renewable energy, road, electricity, power, oil and gas sectors. Through this newsletter, we seek to highlight the shifting regulatory and legal frameworks and equipping stakeholders with strategic insights.

Judicial Pronouncements

Supreme Court Provides Change in Law Relief for De-allocation of Captive Coal Block Under Long-Term Power Procurement Arrangements.

The Supreme Court, in its judgment dated February 27, 2026, concerning West Bengal State Electricity Distribution Company Ltd. (WBSEDCL) v. Adhunik Power & Natural Resources Ltd. (APNRL) and Ors., examined whether the cancellation of a captive coal block and the subsequent statutory overhaul of the coal allocation regime qualified as a “Change in Law” event under the relevant power procurement contracts.

The dispute arose in the context of long-term supply arrangements for 100 MW of power, where the contracted power was understood to be generated from coal sourced from the Ganeshpur captive coal block. Following the cancellation of the Ganeshpur captive coal block pursuant to the Supreme Court’s coal block judgments of August 25, 2014, and the enactment of the Coal Mines (Special Provisions) Act, 2015, which fundamentally altered the coal block allocation process, APNRL had to procure coal to meet the shortage through tapering linkage and hence, it claimed compensation for the additional cost of alternate coal procurement.

The contractual document underlying the dispute comprised a Power Supply Agreement (PSA) executed in January 2011 between WBSEDCL and PTC India Limited for supply of 100 MW of power for 25 years, and a corresponding Power Purchase Agreement (PPA) executed in March 2011 between APNRL and PTC India Limited for onward sale of the same 100 MW power to WBSEDCL. Although the agreements did not expressly identify the coal source in its primary text, internal minutes from January 2011 and subsequent correspondence in 2012 established that the Ganeshpur captive coal block was the intended source from where the 100MW power was to be generated. Since the captive block did not become operational in time, the APNRL commenced supply of power using tapering linkage coal from Central Coalfields Ltd. (CCL), supplemented by e-auction and imported coal. The dispute therefore concerned both the pre-cancellation period, during which the captive source (Ganeshpur coal block) had not yet become operational, and the post-cancellation period, during which the legal basis for the captive source itself was extinguished.

The Central Electricity Regulatory Commission (CERC) in its order held that Article 2.5 of the PPA/PSA bars price escalation for sourcing coal from “other sources” only when the captive coal source was operational. CERC also awarded compensation to APNRL for coal purchased to meet shortfalls in tapering linkage due to the non-operationalization of the Ganeshpur block. However, CERC rejected the “Change in Law” claim regarding the coal block cancellation of 2014. The Appellate Tribunal for Electricity (APTEL) reversed CERC’s finding on “Change in Law” and ruled that Supreme Court’s cancellation of coal block in 2014 and the enactment of the Coal Mines (Special Provisions) Act, 2015, did constitute “Change in Law” events and awarded compensation and carrying cost effective from August 25, 2014.

The Supreme Court held that the APNRL was not entitled to compensation for additional coal costs incurred prior to August 25, 2014, since it had represented that the captive coal block would be operational by the commencement of supply and Article 2.5 of the contract barred escalation for procurement of coal from “other sources.” However, the Court upheld APTEL’s finding that the Supreme Court’s cancellation of the coal block and the subsequent legislative changes constituted “Change in Law” events under Article 10 of the PPA/PSA for the period after August 25, 2014. Accordingly, the Court affirmed APNRL’s entitlement to compensation, including carrying cost, from the date of de-allocation so as to restore it to the same economic position it would have occupied absent the Change in Law event. The Court further directed the CERC to modify its implementation orders by removing compensation granted for the pre-August 2014 period.

DLL Analysis: The judgment establishes a fundamental distinction which separates two types of compensation because it treats both operational failure at existing facilities and legislative or judicial decisions that completely change contract terms as distinct events. The ruling affirms that Supreme Court judgments cancelling statutory allocations, and the enactment of the Coal Mines (Special Provisions) Act 2015, constitute qualifying Change in Law events under standard PPA/PSA provisions. The judgement is important for its nuanced treatment of contractual risk allocation in the electricity sector.

Case Title: West Bengal State Electricity Distribution Company Limited v. Adhunik Power and Natural Resources Limited, Order dated February 27, 2026.

Balancing Renewable Energy Incentives and Regulatory Autonomy: Supreme Court on GBI and Tariff Determination

The Supreme Court in its judgement dated March 25, 2026, addressed a significant question at the intersection of energy regulation and public policy analysing whether the State Electricity Regulatory Commissions (SERCs) while determining electricity tariffs can factor in Generation Based Incentives (GBI) granted by the Union Government through the Ministry of New and Renewable Energy (MNRE).

MNRE introduced the GBI scheme in 2009 to promote wind power generation by providing an additional incentive of Rs. 0.50 per unit of electricity generated and fed into the grid for four to ten years upto Rs. 62 lakhs per megawatt, over and above the tariff approved by SERCs. However, the bar for the scheme was that only those wind power projects which have not been availing the benefit of Accelerated Depreciation (AD) and have duly registered with the Indian Renewable Energy Development Aency (IREDA) would be entitled to GBI. The Andhra Pradesh Electricity Regulatory Commission (APERC), under Regulation 20 of the Andhra Pradesh Regulatory Electricity Commission (Terms and Conditions for Tariff Determination for Wind Power Projects) Regulations, 2015 (Regulation), initially fixed tariffs for wind power projects without deducting GBI. Subsequently, on the request of distribution companies (DISCOMs) and subsequent petition, APERC revised its stand and ordered that the GBI received by generating companies (GENCOs) be deducted from the tariff payable, reasoning that incentives must be “taken into consideration.” GENCOs challenged this before the Appellate Tribunal for Electricity (APTEL), which held that APERC had acted beyond its authority, as Regulation 20 required only consideration, not mandatory deduction, of government incentives. APTEL set aside APERC’s order and directed refund of amounts deducted for adjustment of GBI from the tariff paid, along with interest @12% per annum, which pushed the DISCOMs to approach the Supreme Court.

The Supreme Court held that tariff determination is indeed the exclusive and plenary domain of SERCs under the Electricity Act, 2003, and this power cannot be denied merely because an incentive is granted by the Union Government under Article 282 of the Constitution. However, the Court crucially clarified that the power to “consider and factor in” an incentive does not justify mechanically neutralizing or nullifying it. GBI, as per its design, is a generator-focused, performance-linked incentive meant to promote renewable energy investment and energy transition goals, not a consumer subsidy. The Court emphasized that regulators must act as part of a collaborative regulatory enterprise and harmonies tariff decisions with national and international renewable energy commitments. Consequently, it upheld APTEL’s decision and ruled that GBIs should be disbursed over and above the tariff and not deducted from it.

DLL Analysis: This judgement is a nuanced and well calibrated affirmation of regulatory independence tempered by policy coherence. While reaffirming the position of SERCs in tariff fixation, the Supreme Court also rejects a rigid approach to regulation. By emphasizing collaborative governance and purposive interpretation, the Supreme Court ensures that regulatory actions do not undermine carefully crafted renewable energy incentives that are vital to India’s energy commitments. The judgement strikes an appropriate balance between regulatory authority and policy fidelity, preventing regulators from exercising tariff powers in a manner that conflicts with national sustainability objectives.

Case Title: Southern Power Distribution Company of Andhra Pradesh Limited & Anr. v. Green Infra Wind Solutions Limited and Ors

Regulatory Updates

APERC Proposes Draft Second Amendment to the Andhra Pradesh Electricity Regulatory Commission (Green Energy Open Access, Charges and Banking) Regulations 2024.

The Andhra Pradesh Electricity Regulatory Commission (APERC) issued its notification on February 19, 2026, to propose the Draft Second Amendment to the Andhra Pradesh Electricity Regulatory Commission (Green Energy Open Access, Charges and Banking) Regulations, 2024 (Regulation) under Sections 42, 61, 62, and 86(1)(b) read with Section 181 of the Electricity Act, 2003. The amendment provides explicit regulatory clarity for Renewable Hybrid Energy Projects, particularly for non-colocated assets.

The proposed amendment presents several essential elements for its main features. The new definition Clause 2(1) (m-a) has been inserted that defines “Renewable Hybrid Energy Project” as a renewable energy project that produces electricity from a combination of renewable energy sources connected at the same or different interconnection point(s). The rated capacity of generation from one renewable energy source shall be at least 25% of the rated power capacity of the other resource that operates at the same point or different interconnection point(s). Further, each 1 MW of contracted Wind Solar Hybrid Project shall achieve a minimum Capacity Utilisation Factor (CUF) of 40%.

Clause 9(2) of the Regulation has been modified to include an explanation regarding Non-Colocated Renewable Hybrid Energy Projects. Non-Colocated Renewable Hybrid Energy Projects shall be treated as a single generating project. Even though it shall be treated as one project, the schedule for each source shall be given separately. At the same time, the combined scheduled of individual sources of the hybrid project cannot be more than the total capacity of the renewable energy hybrid project in any time block. If the total scheduled energy goes beyond the renewable energy hybrid project capacity, the excess will be treated as inadvertent energy. For purposes such as energy settlement, deviation accounting, and forecasting deviation, the actual energy injected will be considered source-wise at the interconnection point. The provision also clarifies that connectivity for each renewable energy hybrid project can be granted in accordance with the technical feasibility requirements of TRANSCO/DISCOMS, and individual source of the renewable energy hybrid project may be connected from any location within the state.

Clause 11 of the Regulation has been modified to include that in case of non-colocated renewable energy hybrid project, the interface meter for each individual source shall be installed at the respective interconnection point(s) at the grid substation. Further, Clause 12(b) of the Regulation has been modified to include that the distribution/wheeling charges shall be exempted for eligible clean energy projects and renewable energy manufacturing projects availing open access under the Regulation if they are commissioned or achieve financial closure during the operative period and are commissioned within the timelines stated in their approvals. This exemption is available for the period specified in GO.Ms.No.37 dated 30.10.2024, provided that the power is injected and drawn at the same voltage level within the State, irrespective of the DISCOM boundaries. The DISCOMs can recover the exempted charges from the State Government along with the subsidy claims under Section 65 of the Electricity Act, 2003.

For Renewable Hybrid Energy Projects, where different renewable components are connected at different voltage levels, the wheeling charges and loss allocation shall be applied to each component based on its respective interconnection voltage level of interconnection.

DLL Analysis: The proposed alteration by APERC represents an advanced development which acknowledges the actual business operations and functional aspects of substantial renewable energy facilities. The amendment defines non-colocated systems and establishes essential technical requirements which help decrease previously existing regulatory uncertainties that complicated hybrid project development in Andhra Pradesh. The stakeholders in the state who have hybrid project development plans need to analyze the draft amendment thoroughly while participating in the stakeholder consultation process, so they can establish essential market requirements for non-colocated systems in the final regulations.

CEA Publishes Draft Meter Amendment Regulations, 2026 for Public Comments (February 23, 2026)

The Central Electricity Authority (CEA) published the Draft Central Electricity Authority (Installation and Operation of Meters) Amendment Regulations 2026 (Draft Regulation) on February 23, 2026, allowing public stakeholders to submit their comments regarding the Regulation by March 26, 2026.

The Draft Regulation under sub-regulation (1) of regulation 4(b) provides that all consumers located in areas with communication network shall be supplied electricity through smart meters conforming to the relevant Indian Standards (IS), within the timelines prescribed by the Central Government. For consumer connections with current carrying capacity beyond the limits specified in the applicable IS, the draft permits either automatic remote meter reading meters or smart meters as per relevant IS. In areas where communication networks are not available, the respective State Electricity Regulatory Commission (SERC) shall permit installation of prepayment meters conforming to the relevant IS.

The draft also proposes that all Advanced Metering Infrastructure (AMI) shall include prepayment functionality and be interoperable in line with guidelines issued by the CEA. Further, it introduces a specific provision for open access consumers at voltage levels not exceeding 650 V, under which a smart meter conforming to the relevant IS and having accuracy class 1.0/0.5S will act as the interface meter.

Another important amendment concerns the metering arrangement for open access consumers. The Draft Regulation revises Table 1 under regulation 7 of the Central Electricity Authority (Installation and Operation of Meters) Regulations, 2006 (Previous Regulation), to distinguish between (i) consumers directly connected to the inter-state transmission system, intra-state transmission system, distribution system, or other systems and permitted open access at voltage levels exceeding 650 V, and (ii) consumers permitted open access at voltage levels not exceeding 650 V. For consumers exceeding 650 V, the main meter and check meter is to be installed at the consumer premises, while the standby meter is to be installed at the consumer premises on a separate instrument transformer or at the licensee’s substation, as mutually agreed. For open access consumers at or below 650 V, both the main meter and check meter are to be installed at the consumer premises, and no standby meter is prescribed.

Overall, the proposed amendment seeks to strengthen the legal and technical framework for smart metering, AMI interoperability, prepayment capability, and open access metering arrangements, particularly for lower-voltage consumers.

DLL Analysis: The Draft Regulation is significant as it pushes the metering regime further toward universal smart metering with interoperable AMI architecture, while also formally accommodating open access at lower voltage levels (≤650 V). This is likely to support wider retail market participation and improve billing, monitoring, and settlement efficiency for smaller open access consumers. The explicit recognition of smart meters as interface meters for low-voltage open access consumers may also facilitate broader adoption of decentralized procurement models, but its success will depend on coordinated operationalisation through Central Government timelines, CEA guidelines, and State-level regulatory acceptance.

The Ministry of New and Renewable Energy (MNRE) published an Office Memorandum on February 16, 2026 (Amended Memorandum) for amendment to procedure for inclusion/updating Wind Turbine Model (WTM) in the Approved List of Models and Manufacturers of Wind Turbine (ALMM) issued by MNRE through its office memorandum dated July 31, 2025 (Original Memorandum). MNRE has introduced relaxation in compliance with the timelines with respect to special bearings (main bearing, yaw bearings, and pitch bearings) considering the constraints on the supply chain. Paragraph 2(a) and 2(b) of the Original Memorandum has been amended to provide that wind power projects for which bids were closed prior to July 31, 2025, have been exempted from compliance requirements for main bearings with a condition that such projects are commissioned within 3 years from July 31, 2025. Further, main bearings have been exempted for compliance for all the projects already bided or to be bided before July 31, 2027, which shall be mandated for a review of the supply chain after 2 years.

The wind power projects to be commissioned within 18 months from the date of the Original Memorandum under captive, open access and third-party sale mode have been provided additional exemption under para 4 (h) of the ALMM procedure including exemption of 1 year for yaw and pitch bearing up to January 31, 2028, and 2 years for main bearing subject to review up to January 31, 2029.

DLL Analysis: The Amended Memorandum provides additional time for compliance with the ALMM procedure in relation to special bearings used in wind turbines namely main bearings, yaw bearings and pitch bearings, in light of supply chain constraints. The time relaxation provides implementation relief for projects already under bid or development and may help mitigate risk of procurement related delays and commissioning slippages in the near term. At the same time, given that the exemption is narrowly tailored to specific bearings, is time bound, and in the case of main bearings remains subject to subsequent review, the amendment can be understood as a temporary compliance accommodation rather than any dilution of the government’s long-term localization and approval requirements.

MoPNG Notifies the Sale of upto 20% Ethanol Blended Motor Spirit as per BIS

The Ministry of Petroleum and Natural Gas (MoPNG) on February 17, 2026, notified the sale of ethanol blended motor spirit across the country with prescribed quality standards directing the oil companies to adhere to the same. The notification shall supersede the earlier notification dated June 2, 2021, with an exception to the actions already done or omitted to be done prior to the new notification.

The oil companies have been directed to sell ethanol blended motor spirit with up to 20% of ethanol content as per Bureau of Indian Standards (BIS) specifications and having Research Octane Number (RON) of 95. The notification came into effect from April 1, 2026, and shall continue till further notice from the central government. However, the central government has also clarified that in special circumstances, oil companies may be allowed to sell ethanol bended petrol with specified RON standards as per BIS, for specified time period and regions.

DLL Analysis: The notification marks a significant step in India's phased E20 rollout under the National Biofuel Policy, 2018, moving the country closer to its target of 20% ethanol blending in petrol. The immediate practical impact will be felt across two fronts. First, on fuel supply chain and quality compliance- oil marketing companies will need to ensure that blending infrastructure, storage systems, and distribution networks are consistently calibrated to meet both the 20% ethanol threshold and the prescribed RON 95 standard under BIS specifications. Second, on the automotive sector- E20 compatibility is not universal across existing vehicle populations in India, and the rollout may face adoption friction in regions where older, non-E20 compatible vehicles remain in significant use. Stakeholders in fuel retail, ethanol supply, and automotive manufacturing should review their existing arrangements against the updated BIS specifications and RON requirements without delay.

CERC Notifies Terms and Conditions for Purchase and Sale of Carbon Credit Certificates Regulations, 2026

The Central Electricity Regulatory Commission (CERC) officially notified the CERC (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026 (CCC Regulations) on February 27, 2026. The CCC Regulations have been issued under the Carbon Credit Trading Scheme, 2023 (CCTS), notified by the Ministry of Power dated December 19, 2023, as amended from time to time.

Key features of the CCC Regulations include:

• The CCC Regulation has been published with an objective to create a framework for exchange of Carbon Credit Certificates (CCCs) between obligated and non-obligated entities on power exchanges or through such other mode as may be permitted by CERC by a separate order in accordance with the CCTS.
• The CCC Regulations apply to CCCs offered for transactions on power exchanges or through other modes permitted by CERC in accordance with CCTS and the provisions of Power Market Regulations.
• The Grid Controller of India (GCI) has been designated as the Registry for the exchange of CCCs and is required to develop and establish the necessary operational framework in line with the CCTS.
• The Bureau of Energy Efficiency (BEE) has been appointed as the Administrator for dealing with CCCs, responsible for formulating detailed transaction procedures of CCC after public consultation and seeking approval from CERC in pursuance to CCTS, registering obligated and non-obligated entities with the registry, providing assistance to CERC in matters involving transaction of CCCs and monitoring exchange of CCCs.
• Value and validity of CCC shall be as determined under CCTS.
• Each CCC represents the verified reduction, removal, or avoidance of greenhouse gas emissions and shall be equivalent to one ton of carbon dioxide equivalent (1 tCO2e).
• Two market segments are established: (i) a Compliance Market for obligated entities; and (ii) an Offset Market for non-obligated entities.
• Trading frequency: CCCs are to be traded on power exchanges on a monthly basis, or at such other intervals for all registered entities as per the procedure approved by CERC.
• Price controls: Certificates under the Compliance Market will have a Floor Price (minimum) and Forbearance Price (maximum), both approved by CERC, to ensure market stability.
• Bidding restrictions: Entities cannot place sale bids for more certificates than those available in their Registry accounts. An entity found to have exceeded its certified volume more than three times in a single quarter will be barred from trading for six months.
• CERC retains market oversight powers and may intervene in cases of abnormal price movements or sudden volume changes.

DLL Analysis: The CCC Regulations establish a major achievement that creates India's domestic carbon market framework. The CERC has implemented the trading system for CCCs through power exchanges by establishing regulatory guidelines that control the trading process through power exchanges. The dual-market structure, combined with price controls and strong BEE/GCI governance, provides a structured foundation for price discovery while protecting against market manipulation. The framework remains tightly regulated with CERC retaining broad supervisory powers and restrictions on over-selling, which may reduce speculative abuse but could also limit flexibility. The CCC Regulations may accelerate the development of a formal domestic carbon market in India, improve incentives for decarbonisation investments, and create new compliance and commercial opportunities for energy, industrial and sustainability focused businesses.

MoPNG Issues Revised Order under the Petroleum Products (Maintenance of Production, Storage and Supply) Order, 1999.

The Ministry of Petroleum and Natural Gas (MoPNG) on March 9, 2026, issued a revised order (Order) to prioritize the availability of Liquid Petroleum Gas (LPG) for domestic consumption under Clause 3 and Clause 5 of the Petroleum Products (Maintenance of Production, Storage and Supply) Order, 1999 read with Section 3 of the Essential Commodities Act, 1955.

All the domestic/Special Economic Zone (SEZ) oil refining companies including the petrochemical complexes operating in India have been directed under the Order to maximize and ensure that the production of C3 and C4 streams, Propane, Butane, Butenes and other gases being produced, recovered, fractioned or already available with the companies in their refinery and petrochemical complexes shall be utilized for production of LPG pool and make the same available to the public sector oil marketing companies (viz. IOCL, HPCL and BPCL).

The above-mentioned entities shall not divert, utilize, process, crack, convert or otherwise employ the above-mentioned streams in any manner for manufacturing petrochemical products or other downstream derivatives.

The public sector oil marketing companies have been directed to ensure that LPG procured from the above sources shall be supplied solely to domestic consumers.

DLL Analysis: The Order aims to prioritize supply of LPGs for domestic consumption over commercial use and ensure availability of domestic LPG amid the current LPG crises. The Order reflects a strong public interest and essential commodity approach by placing domestic cooking fuel requirements above commercial optimization. Where household energy access at scale is at stake, the Essential Commodities Act framework gives the government both the legal basis and the political justification for such intervention. The Order also gives the oil marketing companies clear obligations that LPG sourced under the mechanism must be ring-fenced for domestic consumers only, leaving no room for diversion. However, for integrated refinery petrochemicals businesses, the main consequences are likely to be (i) a shift in yield planning- C3 and C4 streams that would ordinarily feed petrochemical production must now be redirected to the LPG pool; (ii) possible reduction in petrochemical outputs, and (iii) potential impact on profitability.

The Indian Carbon Market (ICM) Portal was officially launched by the Union Minister for Power during the Prakriti 2026 event which took place on March 23, 2026. The ICM Portal functions as the primary digital system that enables the implementation of the Carbon Credit Trading Scheme 2023 (CCTS) which allows organizations to register their entities while Carbon Credit Certificates (CCCs) can be issued and tracked and their trading operations can be conducted by both obligated and non-obligated organizations. The launch marks a pivotal operational milestone following CERC's notification of the CERC (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026 (CCC Regulations) on February 27, 2026, and signals that the Indian carbon market is moving from regulatory framework to live operational readiness. The Portal operates through the Grid Controller of India (GCI) as its CCC Registry while the Bureau of Energy Efficiency (BEE) functions as the ICM Administrator.

DLL Analysis: The ICM Portal launch establishes a major milestone which brings India's domestic carbon market closer to its complete operational status. The CCC Regulations exist as current regulations while the Portal functions as operational. The remaining milestones before trading commences include finalization of detailed transaction procedures by BEE, operationalization of GCI's registry infrastructure, and onboarding of obligated entities. The ICM Portal requires energy-intensive industries which operate under mandatory Greenhouse Gas Emission Intensity (GGEI) targets to begin the registration process and baseline assessment as soon as possible. Subject to completion of the remaining operational milestones, trading is expected to commence around mid-2026. The early market will impose compliance risks and cost disadvantages on entities that delay their registration process.

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