Legal Challenges In Renewable Energy Contracts In India
- IJLLR Journal
- Jun 11
- 2 min read
Yogita Thakur, B.A. LL.B. (Hons.), Amity University Rajasthan, Jaipur
ABSTRACT
The renewable energy industry in India has rapidly grown as one of the most important foundations of the nation’s environmental and economic policy. As the number and amount of investments in solar, wind, hybrid and storage- based energy projects have increased, so has the need for assured performance in the power sector through written agreements. In order for renewable energy projects to be developed successfully, the following agreements must be executed: Power Purchase Agreements (PPAs), Engineering Procurement and Construction (EPC) contracts, land-lease contracts, financing agreements, and transmission contracts. However, despite the government setting ambitious national policy objectives, renewable energy developers continue to experience a lot of legal and regulatory issues, including tariff renegotiation, force majeure disputes, change-in-law claims, late payments by Distribution companies (DISCOMs), land acquisition disputes, interruptions to renewable energy, and uncertainty surrounding the development of new technologies such as green hydrogen and battery storage systems. This article will analyze India’s legal framework concerning renewable energy agreements as placed under applicable laws, also including the Electricity Act 2003, the Indian Contract Act of 1872, and the regulatory frameworks set by the Centre for Electricity Regulatory Commission (CERC), and by each State Electricity Regulatory Commission (SERC). This article will also examine important judicial precedents issued by the Supreme Court of India, and APTEL, with respect to interpretation and enforcement of agreements. The author of this paper contends that there are still several barriers to confidence in India's renewable energy market even though contract law and protection for investors are predominant themes in Indian law. The author then recommends simplification of power purchase agreements (PPAs), developing more robust payment protections, implementing better methods for resolving disputes, and establishing a comprehensive set of regulations to promote the long-term viability of renewable energy investments within the Indian economy.
Keywords: Renewable Energy, Power Purchase Agreement, Force Majeure, Change in Law, CERC, APTEL, Electricity Act 2003, DISCOMs, Curtailment.
