Projects, Infrastructure, And Energy Newsletter | June 2026

We are pleased to present the sixth 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 Rules Indian Railways Is Not a Deemed Distribution Licensee Under the Electricity Act 2003; Remains Liable to Pay Cross-Subsidy and Additional Surcharge as a Consumer

A two-judge bench of the Supreme Court, in a judgment dated May 8, 2026, dismissed all appeals filed by the Indian Railways, upholding the order of the Appellate Tribunal for Electricity (APTEL) dated February 12, 2024. The SC held that Indian Railways does not qualify as a deemed distribution licensee (DDL) under the third proviso to Section 14 of the Electricity Act, 2003 (Electricity Act), and remains liable to pay Cross-Subsidy Surcharge (CSS) and Additional Surcharge (AS) as a consumer when availing electricity through open access.

Indian Railways sought connectivity for procuring 100 MW power through inter-state open access for traction substations, but the Maharashtra State Electricity Transmission CO. Ltd. required clarification on its legal status as a DDL. Indian Railways then approached CERC contending, that as an entity of the Central Government it is an Appropriate Government and hence, was DDL under the third proviso to Section 14 of the Electricity Act and that Section 11 of the Railways Act, 1989 (Railways Act) independently empowered it to erect and operate electric traction equipment, power supply and distribution installations for railway operations. CERC accepted this position in substance and held that Indian Railways was an authorized entity under the Railways Act and DDL under Section 14.

APTEL, by its final judgement dated February 12, 2024, rejected Indian Railways claim to such status and further held that since the electricity procured by Railways was used for its own consumption, Indian Railways was liable to pay CSS and AS under Section 42 of the Electricity Act as any other consumer availing open access. Indian Railways appealed against this decision to the Supreme Court (SC).

The SC held that Indian Railways do not qualify as a DDL under the Act and cannot avoid liability to pay CSS and AS when it procures electricity through open access for its own use. The SC directed the respondent distribution licensees to compute and issue detailed calculations of the outstanding surcharge amounts, disaggregated by area of supply and relevant period, and permitted Indian Railways a reasonable opportunity to respond before the matter is subjected to scrutiny by the appropriate state commission. The SC also held that even if Railways qualifies as the Appropriate Government, the benefit of deemed distribution licensee status could not flow from that status alone, given that Railways does not satisfy the substantive statutory requirements of a distribution licensee.

DLL Analysis: The SC has made it clear that governmental character, ownership of electrical infrastructure, or statutory authority to maintain installations is not enough; what matters is whether an entity actually performs the statutory function of supplying electricity to consumers, rather than merely owning distribution infrastructure. In practical terms, the judgement reinforces that the DDL exemption is functional in nature. An entity must satisfy the essential statutory attributes of a distribution licensee before seeking exemption from CSS and AS, thereby preventing large electricity consumers from bypassing the surcharges regime.

Case Title: Indian Railways v. West Bengal State Electricity Distribution Company Limited and Ors., 2026 INSC 464

Read More

CERC Proposes Uniform Compensation Framework for Delays in Achieving GNA Connectivity Milestones

The Central Electricity Regulatory Commission (CERC), vide its Draft Order in Petition No. 5/SM/2026 dated April 15, 2026, proposed a standardized procedure for levying compensation charges where connectivity grantees seek additional time to achieve milestones prescribed under the Central Electricity Regulatory Commission (Connectivity and General Network Access to the Inter-State Transmission System) Regulations, 2022 (GNA Regulations). The proposal aims to ensure uniform treatment of project developers facing delays in achieving land acquisition, financial closure and commercial operation milestones.

Under the GNA Regulations, connectivity grantees are required to achieve critical milestones, including submission of land documents for 50% of the land required for the connectivity purposes, achievement of financial closure and achievement of commercial operation date (COD) within prescribed timelines failing which connectivity is liable to be revoked and the relevant bank guarantees may be encashed.

CERC noted that several project developers had approached the Commission seeking additional time after receiving revocation notices or apprehending similar action for failure to meet milestone requirements. The Commission observed that such cases were being decided individually despite involving similar circumstances. Since such developers were continuing to hold connectivity which is a scarce public resource, CERC proposed a compensation-based mechanism that would permit additional time for milestone achievement while ensuring that scarce connectivity resources are not indefinitely blocked.

CERC proposed a structured Milestone Extension Charges (MEC) regime to permit additional time for achieving the prescribed milestones, subject to eligibility conditions and graded compensation. Broadly, it proposed:

• Extension for land document compliance up to 3 months, with MEC starting at Rs 1500/MW/day and increasing monthly thereafter;
• Extension for financial closure up to 6 months, with MEC at Rs. 1500/MW/day for the first 3 months and escalating thereafter; and
• Extension for COD up to 12 months, with MEC at Rs 3000/MW/day initially, escalating for later months and reaching Rs. 6000/MW/day for the last 3 months.
• The proposal also prescribes threshold eligibility requirements such as minimum land-document submission, proof of financial closure, and EPC award details, depending on the milestone for which relaxation is sought.

DLL Analysis: This proposal reflects CERC's attempt to balance strict enforcement of connectivity timelines with practical realities faced by renewable energy developers. The proposed mechanism seeks to: ensure uniform treatment of similarly situated applicants; discourage speculative hoarding of connectivity; facilitate project completion where genuine implementation progress exists; and preserve efficient utilisation of transmission infrastructure. If finalized, the mechanism is likely to become an important feature of India's GNA regime and may significantly reduce future litigation relating to milestone extensions.

Read More

CERC Approves Creation of Security Interest in Favour of Lenders for Solapur Renewable Energy Transmission Project

The Central Electricity Regulatory Commission (CERC), vide its order dated May 30, 2026, in Petition No. 147/MP/2026, approved the creation of security interest over the assets of Solapur Transmission Limited (STL) in favour of Axis Trustee Services Limited, acting as security trustee for Axis Bank Limited and other present and future lenders financing the transmission project.

STL filed the petition before CERC under Sections 17(3) and 17(4) of the Electricity Act, 2003 (Electricity Act), seeking approval to create security interest over its project assets in favour of Axis Trustee Services Limited, acting as security trustee for Axis Bank Limited and its assignees/transferees/novates. The security was proposed in connection with a Rupee Term Loan facility of Rs 360 crore extended by Axis Bank Limited for part-financing the transmission project titled “Transmission Scheme for evacuation of 1500 MW RE injection at Solapur SEZ” (the Project).

As part of the financing structure, the lender required creation of security interests over the project's assets, including movable and immovable property, project receivables and associated rights. STL relied on Article 15.2.2 of the Transmission Service Agreement (TSA), which expressly permits STL to create encumbrances over receivables and project assets in favour of lenders as security under financing agreements, subject to stated conditions.

CERC recognized that transmission projects are capital-intensive infrastructure projects typically financed through external debts and that lenders ordinarily require creation of adequate security over project assets to mitigate lending risk. Also, TSA itself permitted such encumbrance to be created over the project assets in favour of lenders. Accordingly, CERC granted approval for creation of security interests in favour of the security trustee for the benefit of the lenders, subject to compliance with the Electricity Act and the applicable provisions governing transmission licences.

DLL Analysis: Transmission projects require substantial upfront capital expenditure and are heavily dependent on long-term project finance. Lenders typically require robust security packages before extending financing. Regulatory approval ensures that such financing arrangements can proceed without compromising the integrity of the licensed transmission business. The order reflects CERC's long-standing approach of facilitating infrastructure financing while preserving regulatory oversight over licensed assets. By permitting security creation, the Commission enables transmission developers to access debt capital at competitive terms, thereby supporting timely project implementation.

Read More

APTEL dismisses NTPC appeal, holds that water shortage at Farakka Station due to Indo-Bangladesh Water Treaty and deficient monsoon did not constitute a 'Force Majeure' event under the PPAs

The Appellate Tribunal for Electricity (APTEL) on May 11, 2026, dismissed the appeal filed by NTPC Limited (NTPC) challenging the order dated November 17, 2017, passed by the Central Electricity Regulatory Commission (CERC) in Petition No. 154/MP/2016. The dispute arose from NTPC claim that the unavailability of cooling water at its Farakka Super Thermal Power Station (Farakka Station) during February - March 2016 constrained NTPC to shut down all six units of Farakka Station in phases, owing to a drastic fall in the water level of the Ganga Feeder Canal on account of deficient monsoon rains and diversion of water to Bangladesh under the Indo-Bangladesh Water Sharing Treaty, 1996, constituted a force majeure event under Article 8 of the Power Purchase Agreements (PPAs) executed with the respondent beneficiaries, claiming that the shutdown period should be excluded for computation of plant availability, so that NTPC would not suffer reduction in annual fixed charges.

NTPC thereafter filed the Petition No. 154/MP/2016 before CERC seeking declaration that unavailability of cooling water was a force majeure event, directions to Eastern Regional Power Committee (ERPC) and Eastern Regional Load Despatch Centre (ERLDC) not to count shutdown periods for plant availability, permission to raise revised bills, and consequential payment by the beneficiary utilities.

CERC in the impugned order, had rejected NTPC claim on the grounds that the Indo-Bangladesh Water Sharing Treaty had been in existence since 1996 and was therefore not an unforeseen event. NTPC had itself been aware of the water deficiency and had taken steps to install lift pumps as early as 2009, which it subsequently abandoned due to technical difficulties without pursuing any alternative mitigation measures. APTEL dismissed the appeal and upheld CERC’s order. APTEL held that the fall in water flow in the Ganga Feeder Canal due to hydrological factors, coupled with diversion of water to Bangladesh under the 1996 treaty, did not constitute a force majeure event under Article 8 of the PPAs. Consequently, NTPC was not entitled to exclude the shutdown periods from plants availability calculations, nor to raise revised bills or claim consequential tariff adjustment from the beneficiaries.

DLL Analysis: APTEL ruling reinforces the well-established principle that force majeure clauses in power sector agreements are to be construed strictly and cannot be invoked to excuse non-performance where the event was foreseeable or where the affected party failed to take adequate mitigating steps within its control. The judgment is particularly significant for generating companies operating under long-term PPA, as it clarifies that force majeure risk relief will not be available where the party was already aware of a recurring risk, even if it did not foresee its exact severity, and still failed to take reasonable preventive or remedial steps. Generating companies must, therefore, proactively identify and address hydrological and infrastructure risks and maintain contemporaneous documentation of mitigating actions taken.

Case title: NTPC Limited v. West Bengal State Electricity Distribution Company Limited & Ors., Appeal No. 23 of 2018, decided on May 11, 2026.

Read More

APTEL dismisses appeal by Uttarakhand Power Corporation, upholds exemption of long-term and mid-term open access consumers from cross subsidy surcharge

The Appellate Tribunal for Electricity (APTEL) on May 18, 2026, dismissed the appeal filed by Uttarakhand Power Corporation Limited (UPCL) challenging the order dated April 12, 2018, passed by the Uttarakhand Electricity Regulatory Commission (UERC) in suo-motu proceedings. By the impugned order, UERC had held that long-term and mid-term open access (MTOA) consumers are not liable to pay cross subsidy surcharge (CSS) under Regulation 22 of the UERC (Terms and Conditions of Intra State Open Access) Regulations, 2015 (Open Access Regulations), and directed UPCL to refund the CSS already recovered from the Respondents M/s India Glycols Limited, M/s Hindustan National Glass Limited and M/s Easter India Limited.

The dispute arose after UPCL, by its letter dated January 29, 2018, informed India Glycols Limited that CSS amounting to Rs 33,42,186 had been omitted by mistake from bills relating to power purchase by it through open access under MTOA. India Glycols, by reply dated January 31, 2018, contended that under Regulation 22 of the Open Access Regulation, CSS was not payable on the power purchase through mid-term open access and therefore no such surcharge can be levied on it. Thereafter, since the explanation submitted by India Glycols was not acceptable to UPCL, it submitted a representation dated February 2, 2018, to UERC. On receiving this representation, UERC initiated suo motu proceedings, heard the affected parties and by the impugned order held that long-term and mid-term open access consumers were not liable to pay CSS and directed UPCL to refund the amounts recovered through adjustments in the next three-monthly bills starting May 2018.

APTEL framed two principal issues for determinations:

• Whether the representation by India Glycols revealed only “Billing Dispute” which ought not to have been entertained by the UERC?
• Whether in view of the 2nd proviso of Regulation 22 of the Open Access Regulation, no CSS is to be levied from the long-term and mid-term open access consumers?

On the first issue, APTEL held that the dispute was not confined to erroneous billing but involved the interpretation and application of Regulation 22 of the Open Access Regulations. Since the matter concerned clarification of regulatory rights and liabilities under the statutory framework governing open access, it fell squarely within UERC’s jurisdiction and not that of the Consumer Grievance Redressal Forum (CGRF).

On the second issue, APTEL undertook a detailed interpretation of Regulation 22 of the Open Access Regulations, particularly its 2nd proviso. APTEL observed that the word “such” appearing in the 2nd line of the proviso before the words open access consumers, clearly appears to be superfluous and when taken away, the provision made coherent grammatical and legal sense. The use of disjunctive “and” between the words “long-term/mid-term open access consumer” and “a person who has established a captive generation plant” in the 2nd proviso further confirmed that they were intended to be distinct classes. APTEL further attached significance to the fact that UERC itself as the author of regulation, had expressly clarified in the impugned order that its intention was to exempt long-term and mid-term open access consumers from CSS in order to promote open access.

DLL Analysis: This judgment offers important guidance on two frequently contested issues in electricity law. First, it firmly reiterates that disputes involving the interpretation of open access regulations are beyond the competence of CGRFs and must be adjudicated by State Commissions. Second, the judgment is a useful illustration of the principle that where statutory provisions are vaguely drafted but the intent of the regulator is discernible, the APTEL will adopt a purposive and harmonious construction to give effect to that intent, rather than allow a drafting deficiency to be exploited by a licensee to the detriment of consumers.

Case title: Uttarakhand Power Corporation Limited v. M/s India Glycols Limited & Ors., Appeal No. 190 of 2018, decided on May 18, 2026.

Read More

Regulatory Updates

MNRE Clarification FDRE Projects: No NOC Required for Merchant Sale of Non-RE Charged ESS Power Prior to Commissioning of RE Component.

The Ministry of New and Renewable Energy (MNRE) issued an Office Memorandum dated April 11, 2026 (Memorandum) in response to representations received from renewable energy industry associations seeking clarification under the Guidelines for Tariff Based Competitive Bidding Process for Procurement of Firm and Dispatchable Renewable Energy (FDRE) Power.

The issue concerned whether in existing or future bids/power purchase agreements (PPAs) under the FDRE bidding framework, a developer would require a No-Objection Certificate (NOC) or be subject to a right of first refusal in favour of the intermediary procurer, end procurer, or buying entity where the Energy Storage System (ESS) is commissioned earlier than the renewable generating component, is charged using non-renewable/grid power, and the resulting power is discharged and sold on a merchant or third-party basis. MNRE examined the relevant provision of the FDRE Standard Bidding Guidelines, particularly paragraph 2.2 (b), which expressly states that ESS charged using a source other than renewable energy would not qualify as “Renewable (RE) Power”; paragraph 2.2 (c), which defines “Firm and Dispatchable RE Power” as a power profile to be met by renewable energy sources; and paragraph 14.5, which permits early commencement of supply from one or more project components outside the PPA where a renewable generating component is ready before the remaining components. Based on this MNRE has given the following clarifications:

• MNRE has clarified that no NOC is required from the intermediary procurer, end procurer, or buying entity where ESS power is sold on a merchant or third-party basis before the corresponding RE source is commissioned, provided the ESS is charged using non-RE power.
• The Memorandum expressly treats ESS as a storage component and not as a renewable energy generation component.
• Relying on paragraph 2.2.(b) of the FDRE Standard Bidding Guidelines, MNRE reiterates that power discharged from ESS charged using a source other than RE power does not qualify as RE Power.
• Since such ESS discharge does not qualify as RE power, it cannot be supplied under the FDRE PPA in the absence of commissioning of the corresponding renewable generating component.
• The right of first refusal/acceptance mechanism under paragraph 14.5 applies only to early commencement of supply from renewable generating components that are ready for injection into the grid, and not to non-RE charged ESS discharged.
• MNRE clarifies that requiring procurers to issue NOC or accept such power would create an anomaly, because procurers would effectively be purchasing power that does not satisfy the renewable energy character required under the PPA and may not survive regulatory scrutiny.
• The clarification expressly applies both to existing and future bids/PPAs governed by the FDRE Standard Bidding Guidelines.

DLL Analysis: The clarification is important for FDRE and hybrid storage project developers because it resolves an implementation issue arising from commissioning timelines. MNRE has drawn a clear distinction between renewable generation and storage functionality, and has prevented paragraph 14.5 from being stretched beyond its textual and commercial purpose. The clarification is likely to improve operational flexibility for developers by allowing early monetisation of commissioned battery assets through merchant or third-party sales, while also preserving the regulatory integrity of FDRE PPAs by ensuring that non-RE charged ESS output is not incorrectly treated as contracted renewable power. Since the Memorandum expressly applies to existing as well as future bids/PPAs, developers and procurers with signed FDRE PPAs will be required to assess whether the clarification can be relied upon as an interpretive aid without a formal amendment, or whether contractual amendment is advisable to remove ambiguity at the implementation stage.

Read More

CSERC Notifies Draft Chhattisgarh State Electricity Grid Code, 2026, Aligning with IEGC 2023

The Chhattisgarh State Electricity Regulatory Commission (CSERC) has issued the draft Chhattisgarh State Electricity Grid Code, 2026 (State Grid Code 2026) on June 22, 2026. This regulatory update is issued under Section 86(1)(h) read with Section 181(ZP) of the Electricity Act, 2003, seeking to replace the existing 2011 Grid Code to align with the latest national standards and technological advancements in the power sector.

Key Features of the State Grid Code 2026:

1. The primary objective of the State Grid Code is to ensure consistency with the Indian Electricity Grid Code (IEGC) Regulations, 2023, notified by the Central Electricity Regulatory Commission (CERC). The State Grid Code 2026 is proposed to apply across the whole of Chhattisgarh.
2. The scope of applicability has been widened to cover every transmission licensee in the State, State Transmission Utility (STU), State Load Despatch Centre (SLDC), and every user connected to and/or using the Intra-State Transmission System (InSTS), including distribution licensees.
3. A significant addition is the Resource Adequacy Code under Chapter 3, which mandates integrated resource planning, expressly aligning with the CSERC (Framework for Resource Adequacy) Regulations, 2026.
4. Under the State Grid Code 2026, distribution licensees are made primarily responsible for estimating long-term, medium-term and short-term demand forecasting including open access demand, captive generation, energy efficiency, distributed generation and demand response impacts.
5. Each distribution licensee must assess existing generation resources, identify additional generation requirements, and prepare generation resource procurement plans with reference to planning reserve margin, Loss of Load Probability (LOLP) and Expected Energy Not served (EENS) criteria.
6. The transmission system plan is to cover a 10-year period with a control period of 5 years with annual review of the approved capital investment plan and scope for modification based on changed needs.
7. The State Grid Code 2026 adopts “n-1” security standard for the state transmission system and also requires maintenance of spinning reserve margin for steady state operation.
8. Specific line loading limits and indicative permissible injection capacities at 400 kV, 220 kV and 132 kV levels are now incorporated in the planning provisions, linked with Central Electricity Authority’s (CEA) manual on transmission planning criteria.
9. A notable connectivity update is the maximum power injection limits into the state grid, including up to 15 MVA at 33kV, up to 150 MVA at 132 kV double circuit, up to 400 MVA at 220 kV double circuit and up to 1000 MVA at 400 kV double circuit.
10. The code introduces Security Constrained Unit Commitment (SCUC) as a formal mechanism to keep units on bar in the interest of reserves and grid security without altering beneficiary entitlements in the ordinary course.
11. Thermal generating stations are expressly assigned a minimum turndown level of 55% of Maximum Continuous Rating (MCR) or such lower level as may be specified under the CEA flexible operation regulations, with part-load compensation mechanisms also set out.
12. The Metering Code is updated to cover not only active/reactive/apparent power and energy, but also power factor, voltage, frequency and power quality parameters.
13. The code provides a detailed mechanism for defective/stuck-up meter handling, including use of check meters, standby meters, assessment methodologies and replacement within 15 days.
14. A Cyber Security Coordination Forum through the sectoral CERT mechanism is contemplated for coordinated response and deliberation on cyber security gaps and challenges.

DLL Analysis: The transition to the State Grid Code 2026 represents a pivotal shift towards a more resilient and decentralized grid architecture in Chhattisgarh. The code specifically states that its provisions, and amendments thereto, shall not be treated as “Change in Law” under agreements entered into by users covered under this code. From a regulatory perspective, the draft materially shifts the State Grid Code, 2026 from a conventional transmission operational manual to a data intensive, market linked and reliability-oriented compliance framework, imposing significantly higher obligations on generators, distribution licensees, STU and SLDC in planning, telemetry, forecasting, reserve management, protection audit and real time discipline. Stakeholders should therefore assess the allocation of compliance costs and operational risk under existing contracts with care.

Read More

Draft CERC (Power Market) (Second Amendment) Regulations, 2026

The Central Electricity Regulatory Commission (CERC) on April 17, 2026, issued the draft CERC (Power Market) (Second Amendment) Regulations, 2026, (Draft Regulation) proposing a comprehensive framework for the implementation of Market Coupling across India’s power exchanges.

Key proposals include:

• the Draft Regulation inserts the definitions of “Grid India” in Regulation 2(1)(x-1) as the Grid Controller of India Limited and introduces “Power Market Coupling Procedure” or “PMCP” in Regulation 2(1)(as-i) as the detailed procedure to be formulated by Grid India for implementation of market coupling.
• Regulation 5(a)(i) is proposed to be substituted to clarify that price discovery shall be undertaken by the Market Coupling Operator (MCO) only from such date as may be separately notified by CERC. Until such notification, the existing system of price discovery by power exchanges will continue.
• designating the Grid Controller of India Limited (Grid India) as the MCO, responsible for operating market coupling through a dedicated cell;
• requiring Grid India to formulate the Power Market Coupling Procedure (PMCP) within six months of CERC’s approval to operationalise market coupling across the Day-Ahead Market (DAM), Real-Time Market (RTM), and other market segments;
• mandating that bids collected by power exchanges be validated, anonymised, and transmitted from power exchanges to the MCO through secured channel, which will aggregate them for each market segment received across power exchanges and ensure an efficient price discovery
• new Regulation 39B provides that the price discovery mechanism shall be based on maximisation of economic surplus, i.e the combined buyer and seller surplus, while taking into account all bid types. It further provides that the unconstrained market shall have a uniform market clearing price applicable to all cleared buyers and sellers, while transmission congestion will be addressed through market splitting.

DLL Analysis: The Draft Regulation is a significant structural step toward centralized and harmonized price discovery in India’s power markets. Its most important contribution is that it moves market coupling from a conceptual policy objective to an implementable institutional framework by identifying Grid India as the nodal MCO and mandating a detailed CERC approved PMCP. CERC is seeking to balance efficiency, transparency, market integration with operational caution, especially given the technical complexity of algorithmic bid aggregation, congestion management, and exchange coordination. The actual impact, however, will depend heavily on the contents of the PMCP, governance safeguards and data security architecture.

Read more

Administrative Approval and Operational Guidelines for Small Hydro Power (SHP) Development Scheme (1 MW to 25 MW) for FY 2026-27 to FY 2030-31

The Ministry of New and Renewable Energy (MNRE) issued on May 15, 2026, administrative approval and detailed operational guidelines for the implementation of the Small Hydro Power (SHP) Development Scheme (Scheme) covering projects in the capacity range of 1 MW to 25 MW for the period FY 2026-27 to FY 2030-31. The Scheme, approved by the Union Cabinet in March 2026, with an outlay of Rs. 2,584.60 crore targets the installation of approximately 1,500 MW of new SHP capacity across India. Solar Energy Corporation of India (SECI) has been designated as the National Programme Implementing Agency. The Scheme provides Central Financial Assistance (CFA) at differentiated rates linked to the project location and Central Electricity Regulatory Commission (CERC) determined normative capital cost, including enhanced support for North-Eastern States and districts with international borders, subject to specified project-level caps. CFA disbursement is performance-linked, with the final instalment tied to Commercial Operation Date (COD) and achievement of the prescribed generation threshold within one year. Projects are required to be completed within four years from the start of construction, with a limited grace period in justified cases.

DLL Analysis: This Scheme is a significant policy measure for India’s renewable energy sector, particularly because it combines capital support with a detailed compliance and performance framework. The long operating life, relatively low operating costs and decentralized nature of SHP projects make them well-suited for remote and hydro-rich regions. At the same time, the guidelines also make clear that access to CFA is conditional on transparent allotment, timely construction, statutory clearances, long-term offtake arrangements and post-commissioning generation performance. If implemented effectively, the Scheme could revive India’s small hydro ecosystem, attract private investment, generate rural employment and strengthen renewable energy diversification. However, its practical success will ultimately depend on disciplined project execution and effective facilitation by states and implementing agencies.

Read more

Central Electricity Authority (Technical Standards for Construction of Electrical Plants and Electric Lines) Regulation, 2026

The Central Electricity Authority (CEA) in April 2026, issued the Central Electricity Authority (Technical Standards for Construction of Electrical Plants and Electric Lines) Regulation, 2026 (Regulation), introducing a comprehensive Chapter-VI that outlines the technical standards for the construction of Renewable Energy (RE) power plants and Battery Energy Storage Systems (BESS).

Key proposals include:

• defining strict BESS parameters such as energy and power capacity, C-rate, and state of health, alongside mandating a minimum performance guarantee of 90% output at 5 years, 80% at 10 years, and 70% at 15 years with a minimum 80% depth of discharge;
• requiring all RE and BESS installations to feature advanced grid-support capabilities including active and reactive power control, voltage control, fault ride-through, and grid-forming inverter capabilities;
• establishing a mandatory minimum 25-year design life for both onshore wind and solar power plants;
• laying down specific construction criteria for specialized sectors like floating solar (requiring bathymetry studies, specific mooring systems, and non-toxic floaters) and offshore wind (requiring N-1 reliability for export cables and specific substation foundations); and
• mandating rigorous communication and monitoring infrastructure, including power plant controllers, Phasor Measurement Units (PMUs), and physically and logically segregated communication networks for protection and control functions.

The Regulation was made available for public comment on October 6, 2025, and is proposed to come into force on April 1, 2027.

DLL Analysis: The Regulation marks a critical pivot in India's energy infrastructure by elevating renewable installations from passive generation assets to active, grid-stabilizing participants equipped with mandatory capabilities like grid-forming and reactive power control. By codifying granular technical specifications for emerging technologies such as offshore wind, floating solar, and BESS including strict round-trip efficiency floors of at least 70% and fully automated Energy Management Systems the CEA is standardizing quality and interoperability across the sector. This robust regulatory baseline ensures that as renewable penetration scales, the underlying physical infrastructure possesses the mandated durability of 25-year lifespans, the intelligence of required PMUs and data loggers, and the necessary resilience to maintain overall grid security.

Read more

Delhi issues Circular on Draft Electric Vehicle Policy, 2026-2030

The Government of National Capital Territory of Delhi (GNCTD) through a circular dated April 11, 2026, released the Draft Delhi Electric Vehicle Policy 2026-2030 (Draft Policy) for public consultation and invited stakeholder comments within 30 days of publication. The Draft Policy aims to accelerate EV adoption, bolster charging infrastructure, and curb vehicular pollution.

Key features of the Draft Policy are:

• Purchase incentives will be disbursed via Direct Benefit Transfer (DBT) to registered owners in Delhi. Incentives for electric two-wheelers are capped based on battery capacity (e.g., up to Rs. 30,000 in Year 1), with tiered subsidies for electric three-wheelers (up to Rs. 50,000) and electric four-wheeler goods vehicles (up to Rs. 1,00,000).
• Scrapping incentives ranging from Rs. 10,000 to Rs. 1,00,000 are proposed for specified Delhi-registered BS-IV and below vehicles, provided a new EV is purchased within six months of obtaining a certificate of deposit.
• Road tax and registration fee exemptions are proposed for EVs registered in Delhi, subject to specific carve-outs for electric cars; electric cars priced up to INR 30 Lakhs would receive full exemption, Strong Hybrid EVs would receive 50% exemption and electric cars priced above Rs. 30 lakhs would not be eligible for such exemption.
• The Draft Policy proposed phased electrification mandates, including that only electric three-wheelers may be newly registered in Delhi from January 1, 2027, and only electric two-wheelers from April 1, 2028.
• Delhi Transco Limited is proposed to serve as the nodal agency for planning and implementation of public charging and battery-swapping infrastructure, while the Draft Policy also emphasizes compliance with the Battery Waste Management Rules, 2022, and extended Producer Responsibility (EPR) obligations.

DLL Analysis: This Draft Policy indicates a clear move towards a more structured EV transition framework in Delhi, combining fiscal incentives with phased electrification mandates and ecosystem-level compliance measures. If implemented in its current form, it could have significant implications for original equipment manufacturers (OEMs), fleet operators, aggregators, and government-facing contractors, particularly in relation to fleet planning, charging access and battery waste compliance. As the framework remains at the draft stage and key operational aspects are to be prescribed separately, stakeholders should track the final notification closely and assess whether representations are required during the consultation period.

Read more

Ministry of Coal Publishes Draft Coal Mines (Special Provisions) Adjudication of Penalties Rules, 2026 for Stakeholder Consultation

The Ministry of Coal, vide notification G.S.R. 450(E) dated June 5, 2026, published the Draft Coal Mines (Special Provisions) Adjudication of Penalties Rules, 2026 (Draft Rules) for public consultation, in exercise of powers conferred by sub-sections (1) and (2) of Section 31 of the Coal Mines (Special Provisions) Act, 2015 (Act). The Draft Rules have been framed specifically under clause (xa) of sub-section (2) of Section 31 read with Section 24A of the Act, which provides for adjudication of penalties. The notification states that the proposed rules will be taken into consideration after expiry of 15 days from the date on which copies of the Gazette are made available to the public and objections or suggestions may be addressed to Section Officer P&S-II Section, Ministry of Coal, or emailed to soca3.moc@nic.in.

The Draft Rules propose a framework for the initiation, conduct, and disposal of adjudication proceedings for contraventions under the Act. Key features of the Draft Rules include:

• Adjudication Authority and Inquiry Officer: The Nominated Authority appointed by the Central Government under Section 24A of the Act serves as the adjudication authority. For each inquiry proceeding, the adjudication authority shall designate an Inquiry Officer, not below the rank of Under Secretary to the Government of India, having knowledge of the relevant facts and circumstances. The Central Government may additionally designate officers, staff, consultants, or agencies to provide secretarial, technical or administrative assistance to the adjudication authority.
• Initiation of Inquiry: The adjudication authority may initiate inquiry proceedings either suo motu or on receipt of a complaint or report, where it has reason to believe that a person has committed a contravention of the Act which is liable for adjudication under Section 24A. Reasons for initiation of proceedings must be recorded in writing. For the purposes of conducting inquiry, the adjudication authority is empowered to call for information, records, books, registers, returns and documents; require attendance of persons acquainted with the facts; seek written explanations or statements; and obtain inspection or technical reports from any government agency, expert body or technical institution.
• Notice Procedure: Where prima facie case for inquiry is established, the adjudication authority shall issue notice in the prescribed Form-I to the person alleged to have committed the contravention. The notice must specify the nature of the contravention alleged, the relevant provisions of the Act or rules alleged to have been violated, the material relied on, and the time within which a written reply is to be furnished. The notice shall ordinarily provide a reply period of not less than fifteen days and not more than thirty days.
• Service of Notice: Notices, communications and orders under the Draft Rules may be served by registered post with acknowledgement due, speed post, electronic means, delivery by hand against receipt, or any other mode as the adjudication authority may deem fit. Service by electronic means is deemed valid were transmitted to the electronic mail address or digital account furnished by the concerned person to the Central Government, Nominated Authority or any other statutory authority.
• Reply, Appearance and Hearing: The person who received notice may file a written reply along with supporting documents within prescribed time and may appear in person or through an authorized representative. The adjudication authority may permit filing of additional documents or written submissions on sufficient cause being shown. Hearings may be conducted physically or through electronic means. Where the person who receives notice, fails to appear despite due service of notice, the adjudication authority may proceed to ex-parte after recording reasons. The adjudicatory authority retains the power to adjourn proceedings and call for additional material if required.
• Factors for Determination of Penalty: While adjudging the quantum of penalty under Section 24A, the adjudicatory authority is required to have due regard to the nature, gravity and duration of the contravention; the repetitive nature of the default; the amount of gain or unfair advantage from contravention if quantifiable; the loss or damage caused to public interest or government revenue; whether the contravention was wilful, fraudulent or mala fide; the conduct of the person during inquiry including cooperation provided by such person; and any steps taken to mitigate or rectify the default.
• Order and Payment: The adjudication authority is required to pass a reasoned order containing brief facts, issues for determination, findings with reasons, the penalty imposed if any, and the time within which the penalty shall be paid.

The penalty must be paid within thirty days of receipt of order, or within such extended period as may be allowed by the adjudication for reasons to be recorded in writing. Failure to pay within the prescribed period renders the amount recoverable in accordance with sub-section (4) of Section 24B of the Act. In respect of matters not specifically provided in the Draft Rules, the adjudication authority may regulate its own procedure consistent with the principles of natural justice and the provisions of the Act.

DLL Analysis: The Draft Rules mark a significant step towards institutionalising the penalty adjudication framework under the Act, a statute that governs the allocation and operation of coal mines. Until now, the absence of a codified adjudication procedure under Section 24A has left considerable uncertainty around how penalty proceedings would be initiated and conducted against allocatees. The Draft Rules address this gap by establishing a structured, notice-based, quasi-judicial process with timelines and procedural safeguards including the right of representation, the requirement of reasoned orders, and the availability of ex-parte proceedings on recorded reasoning.

Read more

Nominated Authority Directs Renewal of Performance Bank Guarantees at least Seven Working Days Prior to Expiry

The Nominated Authority, Ministry of Coal, has issued a notice dated June 1, 2026, directing all allocatees under Allotment Agreements, Coal Block Development and Production Agreements (CBDPAs) and Coal Mine Development and Production Agreements (CMDPAs) to ensure renewal and physical submission of Performance Bank Guarantees (PBGs) constituting Performance Security at least seven working days prior to the date of expiry of the existing PBG.

The notice has been issued in the backdrop of repeated instances where PBGs were kept due for renewal until the last day of expiry, creating ambiguity around timely submission, and where only scanned copies of renewed PBGs were submitted before the expiry date while the original physical copies were submitted after expiry, a practice that the Nominated Authority has now expressly flagged as non-compliant.

Under Clause 6.1.6 of the respective Agreements, the Performance Security is required to remain valid until the expiry of the period for which the Mining Lease has been granted or will be granted, or until extractable reserves remain in the coal mine, whichever is earlier, or until the Peak Rated Capacity is achieved, as the case may be. The notice reiterates that the onus of ensuring continuous validity of the PBG rests solely with the allocatee, irrespective of any communication issued by the Nominated Authority's office.

The notice further provides that failure to renew and submit the PBG within the stipulated timeline shall be treated as non-compliance with the Agreement and shall attract action in accordance with its terms, including appropriation of one hundred per cent of the Performance Security. The notice is expressed to operate as a standing instruction for all future PBG renewals across all existing allocatees.

DLL Analysis: The notice has contractual implications for coal block allocatees. It requires submission of original PBGs at least seven working days before expiry, making compliance timelines stricter. Failure to comply may result in appropriation of the entire Performance Security, creating significant financial risk. Allocatees should review PBG expiry schedules, establish advance renewal mechanisms, and coordinate with banks to ensure timely submission of original guarantees. The circular indicates stricter enforcement of contractual obligations by the Nominated Authority.

Read more

Ministry of Coal Notifies the Coal Exchange Rules, 2026

The Ministry of Coal, by notification dated June 4, 2026, has notified the Coal Exchange Rules, 2026 (Rules) through G.S.R. 442(E), in exercise of powers conferred by Section 18B of the Mines and Minerals (Development and Regulation) Act, 1957 (Act). The Rules came into force on the date of their publication in the Official Gazette. Broadly, the Rules establish the regulatory framework for the establishment, registration, functioning, governance and market oversight of coal exchanges in India.

Under the Rules, a “Coal Exchange” means a mineral exchange referred to in Section 3(af) of the Act where buyers and sellers of coal transact, trade and enter into delivery-based contracts on an online platform, with “contract” being defined as a delivery-based contract approved by the Coal Controller Organisation (CCO). The Rules also define CCO as the Authority for all regulatory and oversight functions under the Rules.

Key features of the Coal Exchange Rules include:

• Eligibility and Registration: An applicant seeking to establish a Coal Exchange must be a demutualised company incorporated under the Companies Act, 2013, with a minimum net worth of rupees fifty crores. The applicant must also satisfy the ownership requirement under Rule 13 and governance requirements under Rule 15. Registration is granted for a period of twenty-five years and is renewable for a further period of twenty-five years upon application. A one-time registration fee of rupees fifty lakhs is payable, along with an annual fee of rupees thirty lakhs or 0.02% of annual trade value, whichever is higher, subject to a cap of rupees five crores.
• Ownership Structure: member or client of the Coal Exchange shall, directly or indirectly, individually or together with associates, affiliates or persons acting in concert, acquire or hold more than five per cent of the paid-up equity share capital. Collectively, members and client are capped at forty-nine per cent. Persons other than members or clients may not hold more than twenty-five per cent after five years of registration, and any excess shareholding is required to be divested within that five-year period
• Governance: The Board of Directors must comprise shareholder directors, independent directors, and a managing director. The number of independent directors shall not be less than the number of shareholder directors. Independent directors must be drawn from diverse fields including law, finance, economics, and management, and must be free from any fiduciary relationship with any member or client.
• Contracts and Price Discovery: Price discovery is to be conducted through a fair, neutral, competitive, and efficient mechanism. The final settlement price is to be adjusted based on quality certification issued by an empanelled coal sampling agency. Settlement of transactions is final, irrevocable, and binding on the parties.
• Risk Management and Settlement Guarantee Fund: The Coal Exchange must establish a Risk Assessment and Management Committee headed by an independent director, which shall review the risk management framework bi-annually. Every Coal Exchange must also maintain a Settlement Guarantee Fund, with not less than fifty per cent of the proceeds kept in safe and liquid investments including fixed deposits with scheduled public sector banks, treasury bills and government securities.
• Market Surveillance: A dedicated surveillance department and a market surveillance committee, headed by an independent director, are required to be constituted. Quarterly surveillance reports covering price volatility analysis, transaction pattern monitoring, circular trading, dominant position analysis, and default monitoring must be submitted to the CCO.
• Market Oversight and Intervention: The Authority is empowered to detect and prevent market manipulation, insider trading, cartelization and abuse of dominant position. It may impose floor or cap prices, suspend trading for a cooling-off period, conduct inspections, order investigations, and issue interim orders or directions as required.
• Existing Platforms: Any electronic trading platform for coal that was operational prior to the commencement of the Coal Exchange Rules must apply for registration and obtain it within six months of the operationalization of the first Coal Exchange, failing which it shall cease to exist.

DLL Analysis: The Coal Exchange Rules, 2026, represent a significant step towards formalization and institutionalization of coal trading in India. The Rules do not merely regulate trading mechanics; they create a comprehensive institutional architecture covering entry conditions, ownership caps, board composition, contract approval, risk management, settlement assurance, surveillance, reporting and exit. This is likely to improve transparency and confidence in coal price discovery, while also aligning coal trading more closely with structured market governance principles.

Read more

Ministry of Power Directs States/UTs to Incorporate Insurance Surety Bonds in Power Procurement Bidding Documents

The Ministry of Power (MoP) issued an Office Memorandum (OM) dated April 6, 2026, advising all States, Union Territories and procuring utilities to incorporate provisions for acceptance of Insurance Surety Bonds (ISBs) as valid instruments for Bid Security and Performance Security across all power procurement frameworks, in line with the Ministry of Finance's earlier amendment to the General Financial Rules, 2017 (GFR).

Key features of the OM are as follows:

• ISBs are recognised as an acceptable alternative to Bank Guarantees (BGs) for both Bid Security and Performance Security, pursuant to the Ministry of Finance’s amendment to Rules 170(i) and 171(i) of the GFR, 2017 vide OM dated 02.02.2022, which formally introduced ISBs as eligible security instruments alongside Account Payee Demand Drafts, Fixed Deposit Receipts, Banker's Cheques, Bank Guarantees, and online payment modes.
• MoP has already incorporated ISB provisions in the Standard Bidding Guidelines for Renewable Energy projects (Solar, Wind, Hybrid, and Firm and Dispatchable Renewable Energy), Pumped Storage Projects, and Transmission projects.
• All States/UTs and procuring utilities are directed to suitably incorporate ISB provisions or any other instrument permitted under the GFR as amended in their respective bidding documents, covering long-term, medium-term, and short-term power procurement, as well as Battery Energy Storage System (BESS) procurements.
• The stated objectives of the directive are to ensure policy consistency across procurement segments, improve ease of doing business, and facilitate wider and more competitive participation in the power sector.

DLL Analysis: The OM aims to reduce the financial burden on project developers by allowing the use of ISBs as an alternative to traditional bank guarantees, thereby improving liquidity and reducing credit constraints. It extends the ISB framework to State and UT-level power sector tenders to promote uniformity in security requirements. While this provides flexibility for developers and EPC contractors, implementation will depend on adoption by individual States and UTs. Stakeholders must monitor changes in bidding documents and ensure ISB arrangements meet applicable regulatory and procurement standards. Note that acceptance of ISBs may be subject to procurer-specific risk assessment; while the OM advises States/UTs and procuring utilities to incorporate ISB provisions in their bidding documents, it does not prescribe a timeline for compliance or address the treatment of existing BG-based bid documents, leaving implementation to individual procurers.

Read more

Ministry of Petroleum and Natural Gas Directs Refineries to Maximize LPG Production

The Ministry of Petroleum and Natural Gas (MoPNG) issued an Order dated April 1, 2026 under the Petroleum Products (Maintenance of Production, Storage and Supply) Order, 1999 (Order), read with Section 3 of the Essential Commodities Act, 1955, directing all domestic and Special Economic Zone (SEZ) oil refining companies, including petrochemical complexes, to maximise LPG production in the interest of ensuring uninterrupted domestic supply. The Order supersedes MoPNG’s earlier order dated March 9, 2026.

Key directions under the Order are as follows:

• All domestic and SEZ oil refining companies and petrochemical complexes operating in India are directed to maximise and channel their entire production of C3 and C4 streams including Propane, Butane, Propylene, and Butenes toward LPG pool production and make the same available exclusively to the three Public Sector Oil Marketing Companies (OMCs) viz. IOCL, HPCL and BPCL, except for minimum quantities reserved for critical sectors as determined by the Centre for High Technology (CHT) under MoPNG.
• Refineries and petrochemical complexes are prohibited from diverting, processing, cracking, converting or otherwise utilising C3 and C4 streams for manufacture of other downstream derivatives, except for specified petrochemical products as determined by CHT.
• Public Sector OMCs are directed to ensure that LPG so procured is supplied and marketed solely to domestic LPG consumers.
• Contraventions will attract action under the Essential Commodities Act, 1955, the Petroleum Products Order, 1999, and other applicable laws.

DLL Analysis: This Order reflects a clear Government move to prioritise domestic LPG availability over alternate petrochemical use of C3 and C4 streams. For refineries and integrated petrochemical complexes, this may disrupt feedstock allocation, production planning and downstream supply commitments. The requirement that such output be made available exclusively to IOCL, HPCL and BPCL is also likely to affect existing supply arrangements and requires prompt operational alignment, particularly given the potential consequences of non-compliance under the Essential Commodities Act, 1955, and the Petroleum Products Order, 1999.

Read more

PNGRB Temporarily Suspends Operation of Consumer Protection Regulations, 2025 Amid Global Hydrocarbon Supply Disruptions

The Petroleum and Natural Gas Regulatory Board (PNGRB), by public notice dated April 2, 2026, has placed in abeyance, with immediate effect and until further orders, the operation of all provisions of the Petroleum and Natural Gas Regulatory Board (Consumer Protection) Regulations, 2025 (Regulation), which had been notified on March 19, 2026, under Section 61 of the Petroleum and Natural Gas Regulatory Board Act, 2006. The relaxation, exercised under Regulations 77 and 78 of the said Regulation in light of the serious disruptions and uncertainty in the global hydrocarbon supply chain, freight, insurance, sourcing, and logistics environment arising from the ongoing United States-Iran conflict, and the resulting impact on the Indian oil and gas sector.

The temporary relaxation extends to compliance timelines, complaint handling and escalation turnarounds, reporting obligations, compensation-trigger provisions, operational service standards, and survey and awareness programme requirements and other procedural or implementation obligations under the regulations. Entities have nonetheless been directed to continue making best efforts to maintain safe operations, essential supplies, emergency response systems, complaint registration facilities, and fair dealing with consumers during the relaxation period.

DLL Analysis: The public notice reflects PNGRB’s attempt to respond to exceptional supply-side and logistics disruptions affecting the sector by temporarily relaxing the operation of the Consumer Protection Regulations, 2025. Although the notice provides immediate procedural and compliance relief to regulated entities, it still expects maintenance of essential safety, operational continuity and consumer-interface functions on a best-efforts basis. From a regulatory perspective, the development indicates that while formal consumer protection compliance requirements may remain in abeyance for the present, entities are not relieved from maintaining essential service continuity and fair consumer treatment. Entities should monitor subsequent directions closely, particularly on the duration and scope of the abeyance.

Read more

Ministry of Petroleum and Natural Gas Notifies Temporary Order to Regulate Diesel Supply at Retail Outlets.

The Ministry of Petroleum and Natural Gas (MoPNG), on June 12, 2026, notified the Motor Spirit and High-Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026 (Order), to curb black marketing and hoarding of diesel and to ensure availability for genuine retail consumers. The Order is a temporary measure, valid for up to 90 days, introduced in response to the diversion of diesel purchases by industrial, institutional and commercial consumers from dedicated consumer pumps to retail outlets on account of the price differential between the two channels.

Key directions issued under the Order are as follows:

• Retail outlets shall dispense diesel only into vehicle tanks or PESO-approved containers, subject to a cap of 200 litres per day per customer or vehicle; resale of diesel purchased at retail outlets is prohibited.
• Industrial, institutional, and commercial consumers are prohibited from procuring diesel from retail outlets and must source requirements exclusively through consumer pumps.
• Oil marketing Companies and retail outlet dealers are responsible for ensuring compliance and preventing circumvention of the Order’s provisions.
• State governments and Union Territory administrations have been directed to act against black marketing and unauthorized diversion of diesel.
• Violations will attract penalties under the Essential Commodities Act, 1955, and other applicable laws.
• The Government has clarified that the Order is not a rationing measure and that no shortage of petrol or diesel exists in the country.

DLL Analysis: This Order reflects the Government’s use of essential commodities regulations as a temporary response to supply distortions arising from pricing differentials across diesel distribution channels. While the pricing structure appears intended to protect retail consumers, it also created scope for diversion and misuse of retail supply channels by bulk consumers. The limited 90-day validity indicates that this is intended as an interim corrective measure rather than a permanent policy shift.

Read more

Contributors to this newsletter

Prashanth Sabeshan, Partner
Swati Rawat, Principal Associate
Khushi Yadav, Senior Associate
Soundarya Ganesan, Associate
Sonali Tiwari, Associate