Introduction
India's energy and infrastructure sectors are undergoing major transformation, driven by strong economic growth, massive government investments and ambitious clean energy targets. India's renewable energy sector is experiencing a significant surge in Initial Public Offerings, which is expected to inject nearly INR 25,000 crore in the sector. Against this backdrop, this edition of our Energy, Infrastructure and Natural Resources Newsletter presents key legal and policy developments from August 2025.
Highlights include revisions to the capital expenditure threshold for concurrence of CEA on hydro projects, the publication of the Draft Energy Conservation (Compliance Enforcement) Rules, 2025 aimed at strengthening compliance under the Energy Conservation Act, clarifications on renewable generation obligations, and proposals to revise renewable consumption requirements to provide greater flexibility in meeting clean energy targets.
Notable progress was also made in emerging technologies, with updated guidelines issued for pilot projects on green hydrogen, supporting innovative production pathways and end-use applications. In the natural resources sector, the Mines and Minerals (Development and Regulation) Amendment Act, 2025 introduced new provisions for mineral exchanges, extended leasing options, and expanded avenues for commercialisation.
This edition brings together these and other important updates shaping India's energy, infrastructure, natural resources and environment landscape — we invite you to explore these key developments in the pages that follow.
Ministry of Power (MoP)
Revised Capital Expenditure Threshold for CEA Concurrence on Hydro Projects
Section 8(1) of the Electricity Act, 2003 (Electricity Act) requires any generating company intending to establish a hydro-generating station to obtain the concurrence of the Central Electricity Authority (CEA) for schemes involving capital expenditure above the threshold notified by the Central Government.
Originally, such concurrence was required where the capital cost exceeded INR 2,000 crores , provided the scheme was included in the National Electricity Plan, as notified by the CEA under Section 3(4) of the Electricity Act and conformed to the capacity and type (run-ofriver/storage) specified therein, and the project site had been allocated through a transparent bidding process in accordance with guidelines issued under Section 63 of the Electricity Act. For any other scheme not meeting these conditions, the concurrence threshold was INR 500 crores.1
The MoP has now revised this framework through a notification dated August 01, 2025. Under the revised position, schemes for setting up hydro-generating stations with an estimated capital expenditure exceeding INR 3,000 crores will require the concurrence of the CEA. Off-stream closed-loop pumped storage schemes, irrespective of the level of capital expenditure, are expressly exempted from this requirement, although developers may still seek technical guidance from the CEA. Further, developers are required to ensure compliance with the provisions of the National Dam Safety Act, 2021.2
Additionally, the MoP has clarified that the appraisal of Detailed Project Reports (DPRs) of hydro projects, including storage projects, submitted to the CEA before August 01, 2025, and falling under the exempted category, may be carried out by the CEA upon a specific request from the Developer. Further, the CEA may also appraise DPRs of exempted projects submitted on or after August 01, 2025, if so requested by the Developer.3
Draft Energy Conservation (Compliance Enforcement) Rules, 2025
The Energy Conservation Act, 2001 (Energy Conservation Act) has been enacted to promote efficient use of energy and its conservation across all sectors of the economy. Section 26 of the Energy Conservation Act prescribes penalties for noncompliances. To avoid difficulties in imposition of penalties prescribed under Section 26 of the Energy Conservation Act, the MoP, in consultation with the Bureau of Energy Efficiency (Bureau), has published the Draft Energy Conservation (Compliance Enforcement) Rules, 2025 (Draft Enforcement Rules).
The Draft Enforcement Rules seek to empower the Bureau to detect, verify, and assess cases of noncompliance with the Energy Conservation Act, and to represent such cases before the adjudicating officer appointed by the relevant state electricity regulatory commission.
Clarification on Renewable Generation Obligation
The MoP by its resolution dated 27th February, 2023 (Original RGO Notification), has mandated that any generating company establishing a coal/lignite based thermal generating station and having the commercial operation date (COD) of such coal/lignite based thermal generating station on or after April 01, 2023, will be required to: (i) establish renewable energy generating capacity of a minimum of 40% of the capacity of such coal/lignite-based thermal generating station i.e., renewable generation obligation (RGO), or (ii) procure and supply renewable energy equivalent to such capacity.4
The MoP on August 06, 2025, has clarified that renewable energy generated, procured, and supplied by a (i) wholly owned subsidiary of a generating company, or (ii) wholly owned subsidiary of any company forming part of a joint venture (JV) company, will be counted towards RGO compliance for the generating company or the JV company establishing a coal or lignite-based thermal generating station.
The MoP had in 2023 specified: (i) the minimum share of consumption of non-fossil sources (renewable energy) by designated consumers, and (ii) different share of consumption for different types of non-fossil sources for different designated consumers in respect of: (a) electricity distribution licensee, and (b) other designated consumers who are open access consumers or captive users to the extent of consumption of electricity from sources other than distribution licensee, as a percentage of their total share of energy consumption (RCO Compliance Requirements). The RCO Compliance Requirements were expressed as a percentage of total electrical energy consumption and was specified for the years 2024–25 to 2029–30, with separate components for wind energy, hydro energy, distributed renewable energy, and other renewable energy.5
The MoP, on August 05, 2025, published a draft notification revising the RCO Compliance Requirements. Key changes proposed, include: (i) consumption obligations under wind, hydro, and other renewable energy components have been made fungible, such that surplus consumption under one or more of these components may be set off against deficits in the others; and (ii) consumption obligations for distributed renewable energy have been designated as nonfungible, meaning that deficits under this component cannot be offset by surplus from any other component, although any surplus of distributed renewable energy may be used to set off deficits in the other components; and (ii) consumption from nuclear power sources to be excluded while determining compliance with the consumption obligations. Under the revised framework, designated consumers may fulfil their RCO Compliance Requirements through the purchase of renewable energy certificates—including those obtained under virtual power purchase agreements —in addition to direct consumption of renewable electricity or payment of a buyout price specified by the Central Electricity Regulatory Commission.
Ministry of New and Renewable Energy (MNRE)
The MNRE has on August 04, 2025 , notified the Revised Scheme Guidelines for implementation of pilot projects for production and use of Green Hydrogen using innovative methods and pathways in residential, commercial, localized communities, and decentralized/ non-conventional applications, including any new sector or technology not covered in previous National Green Hydrogen Mission schemes.
The objectives of the Revised Scheme Guidelines are to support innovative models, technologies and pathways for Green Hydrogen production; to validate technical feasibility and performance of Green Hydrogen in residential, household and community appliances including city gas; and to demonstrate safe and secure use of Green Hydrogen in new sectors.
The Revised Scheme Guidelines will be implemented by designated Scheme Implementing Agencies (SIAs) with transparent calls for proposals. Financial support will be granted for equipment/retrofitting for Green Hydrogen production and utilization, with up to 80% support for private entities and 100% for government organizations, subject to certain maximum thresholds.
Implementation methodology includes project selection by SIAs, evaluation by a screening committee and project appraisal committee, and final approval by the advisory group under the National Green Hydrogen Mission.
Ministry of Environment, Forest and Climate Change (MoEF&CC)
Constitution of National Designated Authority for Implementation of Article 6 of the Paris Agreement
The third meeting of the Conference of the Parties (COP), serving as the meeting of the Parties to the Paris Agreement, adopted both market and non-market mechanisms, under Article 6 of the Paris Agreement. These mechanisms are intended to promote integrated, holistic, and balanced approaches to support countries in implementing their respective Nationally Determined Contributions through voluntary international cooperation.
In subsequent meetings of the COP, Parties were required to establish a National Designated Authority and communicate the designation to the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC).6
Pursuant to this mandate, the Central Government, through the MoEF&CC has notified the constitution of the National Designated Authority for the Implementation of Article 6 of the Paris Agreement (Authority), in suppression of its previous notification on the same subject dated August 22, 2025.7
The Authority has been empowered, inter-alia, (i) to issue directions on matters relating to Article 6 based on decisions of the COP serving as the meeting of the Parties to the Paris Agreement; (ii) recommend to the Central Government a list of activities eligible for trading of emission reduction units under Articles 6.2 and 6.4 of the Paris Agreement; (iii) receive projects or activities for evaluation, approval, and authorization at various stages of the project cycle under Articles 6.2 and 6.4; and (iv) authorise the use of emission reduction units from projects towards the achievement of India's Nationally Determined Contributions and other international mitigation purposes, applying corresponding adjustments and providing relevant information to the appropriate UNFCCC bodies.
The Authority has also been vested with the mandate to: (i) recommend to the Central Government the guidance documents developed under the Article 6.2 and Article 6.4 mechanisms, (ii) to consider matters relating to Non-Market Approaches under Article 6.8, and (iii) undertake any other functions assigned by the Central Government.
Ministry of Mines (MoM)
Amendment to the Mines and Minerals (Development and Regulation) Act, 1957
The Mines and Minerals (Development and Regulation) Amendment Act, 2025 (Mines Amendment Act) has introduced significant revisions to Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act).
A new definition of "mineral exchange" has been inserted in Section 3 of the MMDR Act, providing for an electronic platform for mineral trading, including derivatives. A new Section 6A permits holders of mining leases and composite licences for deep-seated minerals to seek a one-time extension of the leased area to include contiguous areas, subject to limits of 10% and 30% respectively. The Mines Amendment Act removes the earlier limit allowing lessees using minerals for captive purposes to sell only up to 50% of annual production, with states now authorised to permit sale of mineral dumps on payment of an additional amount.
Other notable changes include the omission of the requirement to obtain prior approval of the Central Government for granting a composite licence for notified minerals in areas with inadequate evidence of mineral contents, as the State Governments may now grant such licences directly under Section 11 of the MMDR Act; the insertion of a new Section 15B to the MMDR Act allowing inclusion of additional minerals in existing leases with payments specified in the newly introduced Eighth Schedule; and the insertion of new Section 18B of the MMDR Act, directing the Central Government to promote and regulate mineral exchanges as part of a structured mineral market.
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Footnotes
1. S.O. 550 (E) dated April 18, 2006, Ministry of Power, Government of India. Available at: https://powermin.gov.in/sites/default/files/uploads/ Hydro_limits.pdf
2. S.O. 3561(E) dated August 01, 2025, Ministry of Power, Government of India. Available at: https://powermin.gov.in/sites/default/files/webform/ notices/Revision_of_Limit_of_Capital_Expenditure_of_Hydro_Generating_Stations_for_concurrence_by_CEA.pdf
3. F. No. 15-23/3/2021-Hydel-II dated August 29, 2025, Ministry of Power, Government of India. Available at: https://powermin.gov.in/sites/default/ files/webform/notices/Clarification_on_appraisal_of_DPRs_of_Projects_Exempted_from_CEA_Concurrence.pdf
4. F. No. 09/02/2022-RCM.–1.0, Ministry of Power, Government of India. Available at: https://samarth.powermin.gov.in/content/policies/e6f3965b4883-418d-bf66-e387aa478258.pd
5. S.O. 4617(E) dated October 20, 2023, Ministry of Power, Government of India. Available at: https://beeindia.gov.in/sites/default/files/Gazette%20 notification%20dt%2020th%20Oct%202023%20on%20Non%20fossil%20obligation.pdf
6. Report of the COP serving as the meeting of the Parties to the Paris Agreement on its third session, held in Glasgow from 31 October to 13 November, 2021. Addendum. Part two: Action taken by the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement at its third session. Available at: https://unfccc.int/documents/460950
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