Projects, Energy & Infrastructure Monthly Newsletter | September 2025

Delhi Electricity Regulatory Commission has notified the Delhi Electricity Regulatory Commission Supply Code and Performance Standards Seventh Amendment Regulations, 2025 ("Seventh Amendment")

• The Delhi Electricity Regulatory Commission (DERC) has notified the Delhi Electricity Regulatory Commission Supply Code and Performance Standards Seventh Amendment Regulations, 2025 ("Seventh Amendment") on August 7, 2025. These regulations amend the Principal Regulations, 2017, and provide a comprehensive procedural and financial framework to govern works undertaken by Distribution Licensees on behalf of the Government of the National Capital Territory of Delhi (GNCTD) relating to "shifting of HT/LT lines," "electrification of bus depots," and other infrastructure-related activities.
• The Seventh Amendment introduces the concept of "Work Scheme," which must be submitted and approved prior to commencing such works, ensuring planning transparency and compliance with the "Cost Data Book," applicable on the date of submission.
• It introduces a milestone-based payment structure dividing payments into three stages:
  1. Design and Procurement,
  2. Execution and Installation, and
  3. Testing, Commissioning, and Handover, facilitating phased disbursal and work accountability.
• An advance payment of 30% of the estimated project cost is payable upon submission of a proforma invoice, performance guarantee, and an undertaking to comply with the regulations; the balance of 70% is payable only upon satisfactory completion of milestones, backed by certified completion reports and utilization certificates.
• The Amendment mandates that interest calculated at State Bank of India's Marginal Cost of Funds-based Lending Rate ("MCLR") plus 350 basis points during execution be considered part of the total project cost, reimbursable to the Distribution Licensee to cover the working capital requirements.
• Distribution Licensees are exempted from furnishing bank guarantees against advances received from GNCTD departments, provided an unconditional undertaking is submitted, allowing recovery of any unutilized funds through adjustments in the Annual Revenue Requirement of Delhi Transco Limited.
• The Amendment stipulates that any delayed payment of balance amounts beyond 45 days from the date of final invoice submission shall attract an interest penalty calculated at MCLR plus 350 basis points, payable by the concerned GNCTD department to the Distribution Licensee.
• The Amendment harmonizes the processes with the General Financial Rules 2017, ensuring consistency in financial compliance applicable to governmental works.
• Overall, these Regulations provide a robust legal and procedural scaffold to coordinate execution, financial flows, compliance, and reporting for infrastructural works undertaken by Distribution Licensees on behalf of GNCTD, promoting efficiency, fiscal discipline, and consumer protection.

The Central Electricity Regulatory Commission (CERC) notified the Central Electricity Regulatory Commission (Connectivity and General Network Access to the Inter -State Transmission System) Third Amendment Regulations, 2025 ("Third Amendment")

• The Central Electricity Regulatory Commission (CERC) has notified the Central Electricity Regulatory Commission (Connectivity and General Network Access to the inter -State Transmission System) Third Amendment Regulations, 2025 ("Third Amendment") on August 31, 2025. These regulations introduce significant amendments to the framework governing connectivity, access, and operational flexibility for generating companies and transmission customers seeking or utilizing access to the inter -State Transmission System (ISTS), in furtherance of grid modernization and the integration of renewable energy.
• Several new definitions have been inserted, including "Cluster of ISTS substations," "Connectivity Grantee," "Solar hours," and "Solar hour access," clarifying eligibility and scheduling entitlements for market participants.
• The Third Amendment codifies a detailed procedure for withdrawal of connectivity or GNA applications, clearly specifying the stages at which fees or bank guarantees may be forfeited or returned, and establishes binding timelines for processing such withdrawals.
• A new legal regime for differentiated injection and scheduling rights during solar and non -solar hours has been introduced, enhancing the operational versatility of renewable energy generators and storage entities.
• Applicants are expressly permitted to add additional generating or storage capacity within the quantum of granted connectivity, subject to firm caps on net output and compliance with designated regulatory processes.
• The regulations empower applicants to amend land parcels identified for project implementation, prescribe steps for document submission and rectification, and safeguard against any alteration in the point of connectivity or start date on account of such changes.
• Provision is made for phased connectivity by renewable power park developers above specified thresholds, and for sharing of terminal bays and switchyards through legally binding inter -entity agreements.
• Strict compliance requirements are imposed for the submission of project documents: such as promoter disclosures, shareholding structures, and anticipated generation/drawl profiles, to reinforce transparency and regulatory diligence.
• The rules for submission, encashment, and release of connectivity bank guarantees have been revised to provide legal certainty, including for closure of applications or non -approval of upstream augmentation proposals.
• Detailed provisions require applicants and the central nodal agency (CTU) to disclose the start date and coordinates of connectivity, with obligations for timely notification and project status reporting by all stakeholders.
• Collectively, these amendments fortify the statutory scheme for grid access and developer obligations, supporting greater flexibility, robust consumer safeguards, and the efficient operationalization of renewable and storage capacity on the national grid.

Andhra Pradesh Electricity Regulatory Commission notified the Andhra Pradesh Electricity Regulatory Commission [Planning, Procurement, Deployment, and Utilisation of Battery Energy Storage Systems (BESS)] Regulations, 2025

• The Andhra Pradesh Electricity Regulatory Commission (APERC) has notified the Andhra Pradesh Electricity Regulatory Commission [Planning, Procurement, Deployment, and Utilisation of Battery Energy Storage Systems (BESS)] Regulations, 2025 (BESS Regulations) on September 11, 2025. These Regulations establish a comprehensive regulatory framework to facilitate the planning, procurement, deployment, and utilization of Battery Energy Storage Systems (BESS) in the State, supporting Andhra Pradesh's clean energy transition and grid modernization efforts.
• The Regulations apply broadly to distribution and transmission licensees, generating companies, renewable energy developers, independent power producers (IPPs), aggregators, energy storage service providers, and third -party investors engaged in BESS projects or services.
• The regulatory framework allows flexible ownership and deployment models. BESS can be owned or operated by licensees, generators, IPPs, renewable developers, aggregators, or independent service providers. Deployment options include co -location with renewable or conventional generation assets, standalone grid -connected systems, embedded storage in transmission and distribution networks, and behind -the -meter consumer -level systems.
• The Regulations encourage innovative integrations such as BESS with electric vehicle charging and battery swapping stations, as well as vehicle -to -grid (V2G) and grid -to -vehicle (G2V) services, to enhance e -mobility and grid interaction.
• BESS assets are designed to provide crucial ancillary services, including frequency regulation at primary, secondary, and tertiary levels, spinning and non -spinning reserves, voltage support, black start capability, and demand response services, thereby enhancing grid stability and reliability.
• Procurement of BESS capacity by licensees shall be conducted through tariff - based competitive bidding with prior approval from APERC. For licensee -owned BESS assets, cost recovery will be regulated based on prudent investment norms. Market -linked services provided by BESS will be compensated at market - clearing rates in ancillary service markets.
• The regulations impose responsibilities on DISCOMs to identify suitable locations for BESS installation, especially in substations where rooftop solar penetration is high, and integrate BESS in resource planning and regulatory filings. DISCOMs' expenditures on BESS are recoverable through appropriate regulatory mechanisms.
• Generators, IPPs, captive power producers (CPPs), and BESS developers are encouraged to incorporate storage solutions to improve energy reliability, optimize renewable utilization, and participate actively in ancillary and energy markets, either directly or through aggregators.
• Consumers and prosumers may install behind -the -meter BESS for self - consumption and market participation, subject to technical standards and registration with DISCOMs. Charging BESS with renewable power preserves associated green attributes.

Ministry of New and Renewable Energy (MNRE) has notified the National Policy on Geothermal Energy

• Ministry of New and Renewable Energy (MNRE) has notified the National Policy on Geothermal Energy on September 15, 2025. This Policy aims to facilitate the exploration, development, and deployment of geothermal energy resources in India to significantly contribute to the country's renewable energy portfolio and its net -zero emissions target by 2070.
• The Policy applies to all stakeholders, including central and state governments, public and private companies, project developers, research bodies, Agencies, Academics, Entrepreneurs, Startups, etc., engaged in geothermal energy projects.
• Key definitions and systems covered include geothermal resource assessment, drilling, power production technologies (dry steam, flash steam, binary cycle, ORC), direct-use applications, enhanced geothermal systems (EGS), geothermal heat pumps (GSHP), and mineral by-products extraction associated with geothermal operations.
• The Policy identifies 10 major geothermal provinces across India, with numerous sites offering medium to low enthalpy resources suitable for power generation and direct-use applications. Exploration and resource data will be centralized in a national geothermal resource data repository facilitated by MNRE in collaboration with agencies like the Geological Survey of India.
• Developmental models emphasize phased project implementation from exploration to operation, promotion of indigenous technology, exploration risk mitigation, and repurposing of abandoned oil and gas wells for geothermal use through joint ventures and technology sharing with the oil and gas sector.
• The Policy encourages financial and fiscal incentives, including support for research and pilot projects, facilitation of foreign direct investment, concessional loans, tax holidays, import duty exemptions, and inclusion under renewable energy regulations such as must-run status and renewable purchase obligations.
• States are directed to designate nodal agencies for streamlined single-window clearance of geothermal projects, land allocation, environmental and social impact clearances, and community engagement, particularly in tribal and remote areas. Permits and land leases are granted for exploration and development with provisions for extensions and concessions in difficult terrains.
• Implementation mechanisms include international cooperation for technology transfer, partnerships with multilateral finance institutions, establishment of Centres of Excellence for capacity building, regular progress reporting, and issuance of detailed operational guidelines.

Chamundeshwari Electricity Supply Company Ltd. (CESC) Vs. Saisudhir Energy (Chitradurga) Pvt. Ltd. & Anr.

Supreme Court Judgment dated August 25, 2025, in Civil Appeal No. 6888 of 2018

Background facts

• The said Appeal was filed by Chamundeshwari Electricity Supply Company Ltd. (CESC) before the Supreme Court of India challenging the judgment of the Appellate Tribunal for Electricity (APTEL) affirming the Karnataka Electricity Regulatory Commission's (KERC) order directing CESC to restore the encashed performance bank guarantee, extend contractual timelines, and renegotiate the tariff in respect of a 10 MW solar power project.
• The Appellant, CESC, is a state-owned distribution licensee; Respondent No.1 is the solar power developer, and Respondent No.2 is the state transmission utility (KPTCL), both state instrumentalities responsible for grid infrastructure.
• The solar project was subject to a Power Purchase Agreement (PPA) with an agreed tariff and timelines, including Conditions Precedent (CPs) and Commercial Operation Date (COD). Delays in commissioning the evacuation system by KPTCL prevented timely project commissioning.
• Due to KPTCL's delay in commissioning evacuation transmission lines, the Developer sought an extension of COD. CESC offered extension on condition of tariff reduction to Rs. 2.39/kWh, which Developer contested before KERC, seeking restoration of encashed bank guarantee, extension of timelines, and tariff renegotiation.
• For the abovementioned reasons, the Petitioner sought restoration of encashed bank guarantee, extension of contractual timelines due to delay in evacuation system deemed Force Majeure, and direction for tariff renegotiation to retain original tariff.

Issues at Hand

• Whether the delay of KPTCL in commissioning the system affects the timelines for fulfilment of CPs and achievement of COD under the PPA.
• Whether the Appellant is entitled to invoke and encash the performance bank guarantee in the present case.
• Whether the finding of Force Majeure recorded by the State Commission is sustainable in the absence of contractual notice under Article 14.5 of the PPA.
• Whether the PPA is in the nature of a contingent contract.
• Whether the State Commission and APTEL are competent to direct restoration of the bank guarantee, extension of timelines, and renegotiation of tariff.

Decision of the Court/Tribunal

• The Supreme Court allowed the Appeal filed by CESC, setting aside the concurrent orders of the Appellate Tribunal for Electricity (APTEL) and Karnataka Electricity Regulatory Commission (KERC).
• The Court held that the invocation and encashment of the performance bank guarantee by CESC was lawful, as the Developer failed to fulfil key Conditions Precedent within the stipulated timelines and failed to achieve the Commercial Operation Date as per the PPA.
• It was held that the delay in commissioning the evacuation system by KPTCL did not amount to a Force Majeure event entitling the Developer to extension of timelines, as no formal notice was served invoking Force Majeure as required under the contract.
• The Supreme Court emphasized the sanctity of contract, ruling that regulatory authorities do not possess jurisdiction to modify commercial contractual terms, including tariff or timeline extensions, under the guise of regulatory powers.
• The Court concluded that the Developer waived the contractual remedies by failing to adhere to the terms and that tariff renegotiation or restoration of encashed bank guarantees could not be directed by regulatory bodies in the absence of contractual compliance.
• Accordingly, all reliefs granted by KERC and upheld by APTEL in favour of the Developer were reversed, reinstating CESC's rights under the PPA and repudiating the claims of the Developer for extension and tariff revision.

To view the full article, click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.