Stricter regulations and project oversight can discourage speculative developers, but they may also inadvertently affect genuine developers facing legitimate execution challenges that delay project timelines.

According to Shri Venkatesh, Founding Partner at SKV Law Offices, India’s electricity regulations must strike a balance between stronger oversight and adequate  flexibility for private developers

During an interview on the sidelines of the Mercom India Renewables Summit 2026, held in New Delhi on July 1 and 2, Venkatesh discusses central and state electricity policies, amendments to the General Network Access regulations, transmission infrastructure delays, and reforms needed to improve policy implementation.

The following are edited excerpts from the interview.

The industry often points to a mismatch between central and state electricity policies. Central policies are generally considered as guidance rather than as binding requirements for states. How would you explain this from a legal perspective?

Electricity is a concurrent subject, which allows both the central and state governments to frame laws. Before the Electricity Act, 2003, several state governments had their own electricity laws in addition to the central legislation that existed at the time.

As India has a federal structure and electricity is a concurrent subject, central government policies serve as guidance for state electricity regulatory commissions but are not binding on them. A state commission therefore has the flexibility to take a different approach to implementing a policy.

For example, General Network Access at the central level combines connectivity and access. However, this approach has not been adopted uniformly across states, where developers may still have to apply separately for connectivity and access.

States have the autonomy to make their own decisions. While they generally align with central policies, they are not legally bound by the directions or mandate of the Central Electricity Regulatory Commission.

As new regulations are introduced, where must regulators strike a balance between strengthening oversight and avoiding excessive restrictions?

The recent amendments to the General Network Access regulations have addressed oversight in project implementation in detail. The objective is to prevent speculative entities from blocking connectivity and ensure genuine developers receive timely access. That is a valid objective.

However, the regulations now examine almost every stage of project execution, which was not the case earlier. Regulators must give private power generating companies sufficient flexibility to implement projects according to their own schedules and commercial considerations.

For example, under the General Network Access framework, developers must submit project finance documents within six months. The nature of project financing, whether through equity, a letter of credit, or foreign debt, falls within the commercial domain of the private developer.  It should not be regulated minutely by the regulations.

A balance is required between preventing speculative developers and allowing genuine developers sufficient flexibility to execute projects.

Renewable energy projects in Rajasthan and Gujarat have faced curtailment and evacuation constraints. What legal remedies are available when such delays reduce a project’s internal rate of return?

Several of these matters are currently sub judice, and I represent developers in some of them. It would therefore be inappropriate to comment on the specific cases. However, there is a broader gap in the existing legal framework.

The law has traditionally focused on ensuring that power generating projects are completed by the time transmission infrastructure becomes available. Earlier, the common problem was that the transmission lines would be ready, but power generation would be delayed.

Today, the situation has reversed. Renewable energy projects have shorter construction timelines and may be ready before the associated transmission infrastructure. Transmission licensees can face delays because of right-of-way and execution issues.

The law has not fully evolved to address this situation. It provides for compensation to a transmission licensee when a generator is delayed, but it does not clearly address compensation for a generator when the transmission licensee is delayed.

Developers can approach the Central Electricity Regulatory Commission and establish that they invested on the understanding that their projects would begin operations on a particular date. If the project is ready but evacuation infrastructure is unavailable, the developer can seek compensation for the resulting underutilization of the investment and the reduction in the project’s internal rate of return.

Which electricity sector policy reform should receive the highest priority?

The appellate tribunal must be strengthened, and the legal framework must address infrastructure delays more effectively.

A broader reform would be to move electricity from the Concurrent List to the Union List. India’s electricity sector increasingly operates on a national basis. The grid is national, generation is centrally coordinated, and major policies are framed at the central level.

Bringing electricity under the Union List could improve policy implementation and help resolve issues affecting projects across states more quickly.