Energy Law: Complete Notes

About this subject

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Energy Law runs from why energy needs law at all to how the law is guiding India from coal and oil towards clean energy. Switching on a fan, charging a phone, riding a bus or cooking on a gas stove puts a person at the end of a long chain made of laws, licences and regulators; connecting each rule to everyday life makes it easy to remember. For every important case, learn the facts, the question, the decision and, above all, the principle, which is what is applied in examination answers.

Why Energy Needs Law

Modern life (grid-charged phones, electric water pumps, gas stoves, diesel or CNG buses, farm pumps, hospital machines, factories) cannot be imagined without energy. Yet energy is not ready-made: coal is mined, carried by train to a power plant and burnt to heat water; steam turns a turbine that produces electricity, which travels over transmission lines to a substation and through local wires to the home, where a meter is read and a bill sent. This one journey raises many legal questions:

• Who owns the coal underground (landowner, State or Union)? Who may mine it, on what terms, and how are miners protected from accidents?
• Who may build the plant, and who fixes its selling price? Who may lay wires across private land?
• Can the discom refuse to connect a poor household? What if the bill is wrong?
• Who pays for the smoke the plant releases? (Harder still for a nuclear reactor or a large dam.)

What Energy Law Covers

The food, energy and water nexus

Farms need energy for pumps and fertilisers, power plants need huge amounts of water, and dams both produce electricity and store irrigation water. So food, energy and water are studied together as the food, energy and water nexus: a decision in one affects the other two.

Classification of energy

Kind	Meaning and examples
Primary	Found in nature: coal, crude oil, natural gas, uranium, sunlight, wind.
Secondary	Made from primary energy; electricity is the best example.
Non-renewable	Coal, oil and gas: formed over millions of years and will run out one day.
Renewable	Solar, wind and water: replaced by nature.

Many Indian villages still use traditional fuels such as firewood and cow dung for cooking, so the law of clean cooking is very much a part of Energy Law.

Six sources of Energy Law

1. The Constitution, which divides the power to make energy laws between the Union and the States.
2. Statutes of Parliament and State legislatures, such as the Electricity Act, 2003 and the Petroleum Act, 1934.
3. Delegated legislation: rules made by the Government and regulations made by regulators under those statutes.
4. Policies, such as the National Electricity Policy and the National Action Plan on Climate Change. They do not bind like statutes, but many statutes require regulators to follow them.
5. Orders of regulators and judgments of courts.
6. International law, such as the Paris Agreement on climate change.

The Constitution and Energy

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The Seventh Schedule has three lists: List I (Union List), where only Parliament legislates; List II (State List), where the States legislate; and List III (Concurrent List), where both can legislate, but a law of Parliament prevails in case of conflict.

Subject	Entry	Position and consequence
Electricity	Entry 38, List III	Concurrent. Parliament made the Electricity Act, 2003 and States also make electricity laws; this explains why there is a Central Commission and State Commissions.
Oil and gas	Entry 53, List I	Union. Covers regulation and development of oilfields and mineral oil resources, and petroleum and petroleum products; hence the Petroleum Act and the Petroleum and Natural Gas Regulatory Board Act are central laws.
Mines and minerals	Entry 54, List I; Entry 23, List II	Shared under Union control (see below).
Atomic energy and the mineral resources needed to produce it	Entry 6, List I	Entirely a Union subject.

Mines and minerals

Entry 54, List I empowers Parliament to regulate mines and mineral development to the extent that Parliament declares by law that Union control is expedient in the public interest. Entry 23, List II gives the States power over mines and mineral development, but subject to List I. When Parliament makes such a declaration, as it has in the Mines and Minerals Development and Regulation Act, 1957, the State power shrinks to that extent.

Article 297

All lands, minerals and other things of value under the ocean within the territorial waters, the continental shelf or the exclusive economic zone of India vest in the Union. So the oil and gas under the seas belong to the Union of India, not to any State or company. This Article played a central role in a famous dispute between the companies of two brothers.

Energy Policy

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A policy is a plan of the Government that sets goals and chooses the means to reach them. Energy policy asks which sources to develop, how to price energy, how to ensure every citizen gets it, and how to protect the environment while doing so.

Integrated Energy Policy (2006)

In August 2006, an Expert Committee of the Planning Commission chaired by the economist Kirit Parikh submitted its report on an Integrated Energy Policy.

Draft National Energy Policy (2017)

Released by NITI Aayog in June 2017, it named four objectives: access to energy at affordable prices; improved security and independence; greater sustainability; and economic growth.

Electricity policies have a legal base

• Section 3, Electricity Act, 2003 requires the Central Government to prepare a National Electricity Policy and a tariff policy.
• The National Electricity Policy was issued in February 2005. The Tariff Policy was first notified in January 2006 and revised in January 2016.
• In 2026, a new draft National Electricity Policy has been prepared, but it has not yet been adopted.

Are they binding? Ordinary policies are not laws. But Section 61(i) requires the commissions to be guided by these two policies when they make tariff regulations.

Tariffs and Subsidies

A tariff is the price charged for energy together with the method of calculating it. In a perfect market price reflects cost, but energy is a basic need that many cannot afford, so governments reduce the price for some people. This reduction is a subsidy.

Cross-subsidy	Direct subsidy
One group of consumers pays more than the cost so that another can pay less. Industries and shops often pay a higher electricity tariff, and the extra money keeps tariffs low for farmers and poor households.	The Government itself pays from its budget.

Legal limits

• The Electricity Act says tariffs should progressively reflect the cost of supply and cross-subsidies should be reduced.
• The Tariff Policy, 2016 asks commissions to bring tariffs within plus or minus 20 per cent of the average cost of supply. It allows special support for below-poverty-line consumers who use very little electricity, but even their tariff should be at least half of the average cost of supply.
• Section 65: a State Government that wants to subsidise any class of consumers must pay the discom in advance.

Oil and gas subsidies

• Petrol prices were freed from Government control in June 2010, diesel prices in October 2014.
• Since 1 January 2015, under the PAHAL scheme, consumers buy cooking gas cylinders at market price and the subsidy is paid directly into their bank accounts (direct benefit transfer). This reduces leakage because the subsidy reaches the real consumer.
• The Pradhan Mantri Ujjwala Yojana, launched on 1 May 2016 at Ballia in Uttar Pradesh, gives free cooking gas connections to women from poor households.

Subsidies create a constant tension: tariffs too low and discoms lose money and cannot maintain supply; tariffs too high and the poor lose access. The law tries to keep subsidies targeted, transparent and paid for.

Taxes on Energy and Mineral Royalty

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Electricity

• Taxed by the States under Entry 53, List II (taxes on consumption or sale of electricity), usually called electricity duty on the bill. Electricity is not under GST.
• Article 287: unless Parliament by law provides otherwise, a State cannot tax electricity consumed by or sold to the Government of India, or electricity used in running a railway.
• Article 288 similarly protects water and electricity handled by an authority created by Parliament to manage an inter-State river.

Petroleum

• When GST came in 2017, five products were kept outside it for the time being: crude oil, high speed diesel, petrol, natural gas and aviation turbine fuel. Under Article 279A(5), the GST Council will recommend the date from which they come under GST.
• Until then, the Centre levies excise duty (Entry 84, List I) and the States levy sales tax or VAT (Entry 54, List II). That is why petrol prices differ from State to State.
• A special windfall tax on domestic crude oil was imposed in July 2022, when global oil prices rose sharply, and abolished in December 2024.

Coal: tax serving environmental goals

• July 2010: Clean Energy Cess of ₹50 per tonne, later raised to ₹400 per tonne, meant for clean energy projects.
• July 2017: replaced under GST by a compensation cess of the same amount.
• September 2025: compensation cess on coal removed and GST on coal raised from 5 to 18 per cent; in the same reform, GST on solar panels, wind turbines and similar renewable energy devices cut from 12 to 5 per cent.

Royalty

A company extracting a mineral such as coal pays royalty to the State that owns it. For decades, whether royalty is a tax was disputed.

Energy Jurisprudence in the World

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Energy jurisprudence means the basic legal ideas and principles that govern energy. International law shows four of them.

1. Permanent sovereignty over natural resources. On 14 December 1962 the UN General Assembly adopted Resolution 1803, recognising the right of peoples and nations to control their natural wealth, such as oil and minerals, for national development. Newly independent countries used it to take control of oil and mines run by foreign companies.
2. Energy security through cooperation. After the oil price rise of the 1970s, consumer countries formed the International Energy Agency (1974) to coordinate responses to supply shocks. Oil exporters had earlier formed OPEC, the Organization of the Petroleum Exporting Countries (1960).
3. Protection of energy investment. The Energy Charter Treaty (signed at Lisbon, December 1994; in force April 1998) protects foreign energy investors and lets them bring claims directly against host States before international arbitration. Many countries felt it protects fossil fuel investments too strongly and makes climate action costly, so the European Union withdrew with effect from June 2025.
4. Energy as a human right. No treaty states a right to energy in plain words, but Article 25 of the Universal Declaration of Human Rights and Article 11 of the International Covenant on Economic, Social and Cultural Rights recognise the right to an adequate standard of living, impossible without the light, clean cooking and health care that energy brings. Article 14(2)(h) of the Convention on the Elimination of All Forms of Discrimination against Women mentions electricity directly: States must ensure rural women adequate living conditions, including housing, sanitation, electricity and water supply, transport and communications. India is a party.

The Right to Electricity in India

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The Constitution does not list energy or electricity among the fundamental rights. Courts protect access through Article 21 (no person shall be deprived of life or personal liberty except according to procedure established by law), reading "life" as a life with human dignity, including the basic necessities that make it possible.

The statutory right: Section 43

Under Section 43 of the Electricity Act, a discom must supply electricity to the owner or occupier of any premises on application.

Sustainable Development Goal 7

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In September 2015 the United Nations adopted the 2030 Agenda for Sustainable Development with 17 goals. Goal 7: "Ensure access to affordable, reliable, sustainable and modern energy for all." Affordable means people can pay for it; reliable, it does not fail; sustainable, it does not destroy the environment; modern, clean electricity and clean cooking fuels rather than smoky firewood.

Target (by 2030)	Content
7.1	Universal access to affordable, reliable and modern energy services.
7.2	Substantial increase in the share of renewable energy in the global energy mix.
7.3	Double the global rate of improvement in energy efficiency.
7.a	International cooperation to share clean energy research and technology and promote clean energy investment.
7.b	Expand infrastructure and upgrade technology for modern, sustainable energy in developing countries, including least developed countries, small island States and landlocked countries.

Global position: the Tracking SDG 7 report of 2025 found about 666 million people without electricity, mostly in Africa south of the Sahara, and about 2.1 billion without clean cooking. This is energy poverty: it keeps children from studying after dark and fills homes with smoke that harms health, above all women's.

India's progress

• Village electrification: on 28 April 2018 every inhabited village in the Government's list was declared electrified, the last being Leisang in Manipur. But a village counts as electrified even if many homes are still dark.
• Saubhagya (2017) connected households: about 2 crore 86 lakh homes by March 2022.
• Ujjwala: gas connections to poor families for clean cooking.
• UJALA (January 2015): energy efficiency; more than 36 crore LED bulbs distributed.
• Renewables (target 7.2): one of the largest solar programmes in the world.

Energy Security and Sustainable Development

Energy security has a short-term side (surviving a sudden supply shock) and a long-term side (steady investment in supply). India is especially exposed to the short-term risk, because it imports close to nine-tenths of the crude oil it uses.

The two ideas pull in different directions. Coal gives India cheap, secure electricity from its own mines, helping energy security and development; but it pollutes the air and warms the planet, threatening sustainable development.

The Power Sector: How Electricity Reaches the Consumer

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Electricity reaches almost every home, shop, farm and factory, so the power sector has the largest body of energy law.

Stage	What happens
Generation	A plant burns coal or gas, or uses falling water, wind, sunlight or nuclear fuel, to run a machine that produces electricity.
Transmission	Electricity travels long distances over high voltage lines (tall steel towers along highways); high voltage means less energy is lost.
Distribution	Voltage is stepped down at substations near towns and villages, and local wires carry electricity to each building.

Grid balance and load despatch

Electricity cannot easily be stored in large quantities, so at every moment the electricity put into the grid must match the electricity taken out; if the balance fails badly, the grid collapses. In July 2012 the grid failed on two days and a very large part of northern, eastern and north-eastern India lost power. The Act therefore creates a National Load Despatch Centre, Regional Load Despatch Centres and State Load Despatch Centres, which watch the grid, schedule and despatch electricity; every generator and licensee must follow their directions.

Each stage raises legal questions: who may build plants, own lines or sell to a house and at what price; what follows a wrong bill, a cut without notice or theft by hooking a wire onto the line; and who keeps the wires safe.

The Early Electricity Laws

Indian Electricity Act, 1910

Made when a few private companies supplied electricity in big cities. Its main idea was licensing: a supplier needed a Government licence fixing its area and duties. It also dealt with safety, such as how lines must be laid and protected. Under its Section 37, the Government made the Indian Electricity Rules, 1956, with detailed safety standards for wiring, earthing, overhead lines and electrical installations, which governed electrical safety for more than 50 years.

Electricity Supply Act, 1948

After independence, electricity was needed on a massive scale for irrigation, industry and villages, beyond what private companies could provide. The 1948 Act created State Electricity Boards, State-owned bodies doing generation, transmission and distribution within the State, and provided for the Central Electricity Authority, a technical body planning the national power system.

Decline of the Boards

For about four decades the Boards built a large network and electrified many villages. But tariffs were often fixed with an eye on votes rather than costs; farmers frequently got free or very cheap power that the State did not always pay for; and much electricity was lost through weak wires and theft. The Boards ran heavy losses and could neither pay suppliers nor invest in new plants. In 1991, as part of economic liberalisation, the Electricity Laws Amendment Act allowed private companies to build generating stations and sell power to the Boards, but investors hesitated because their only buyers, the Boards, were financially weak.

Reform and the Electricity Regulatory Commissions Act, 1998

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The reform idea: take tariff fixing out of the hands of politicians and give it to an independent expert body, a regulatory commission.

Odisha (then Orissa) led the way: the Orissa Electricity Reform Act, 1995 split its State Electricity Board into separate companies, and in 1996 the State set up India's first State Electricity Regulatory Commission.

The Electricity Regulatory Commissions Act, 1998 did two main things:

1. It created the Central Electricity Regulatory Commission (CERC), mainly to regulate the tariff of generating companies owned or controlled by the Central Government, and also of other generating companies selling electricity in more than one State, and to regulate inter-State transmission.
2. It allowed each State to set up a State Electricity Regulatory Commission (SERC) to fix tariffs within the State. A State Commission was optional.

The CERC was constituted in July 1998 and in 1999 framed conduct of business regulations (how petitions are filed, heard and decided), beginning a culture of fixing tariffs in open hearings, after hearing the public, by reasoned orders. But the reform was incomplete: three laws (1910, 1948, 1998) stayed in force, often pulling in different directions, so one complete modern law was needed.

The Electricity Act, 2003

In force from 10 June 2003.

• Section 185 repealed the Indian Electricity Act, 1910, the Electricity Supply Act, 1948 and the Electricity Regulatory Commissions Act, 1998, but saved what had been done under them.
• Section 76: the Central Commission set up under the 1998 Act continues as the Central Commission. Section 82: existing State Commissions continue, and every State must now have one; it is no longer optional.

Aims (preamble): to develop the electricity industry, promote competition, protect consumers' interests, supply electricity to all areas, rationalise tariffs, keep subsidy policies transparent, and promote efficient and environmentally benign policies. It also provides for the CEA, the regulatory commissions and an Appellate Tribunal. Courts read the whole Act in the light of these aims.

Eight big ideas

1. Generation is free from licensing for anyone meeting the technical standards.
2. Transmission, distribution and trading need a licence.
3. State Electricity Boards were to be reorganised; most States split them into separate generation, transmission and distribution companies.
4. Open access: a buyer can use others' wires to receive electricity from a seller of his choice.
5. Tariffs fixed by independent commissions or discovered through competitive bidding.
6. Statutory consumer rights: right to a connection, standards of performance, grievance forums.
7. Strong provisions against theft of electricity.
8. A specialised appellate tribunal.

The 2007 amendment

• Softened the language on cross-subsidies.
• Made open access available on payment of a surcharge.
• Raised the rate of assessment for unauthorised use of electricity.
• Made theft a cognizable and non-bailable offence.

The Regulators and Their Roles

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Ministry of Power and the Central Electricity Authority

• Ministry of Power makes policy, not tariffs. Under Section 3 the Central Government prepares the National Electricity Policy and tariff policy in consultation with the States and the CEA; under Section 107 it can give policy directions to the Central Commission in matters of public interest (a State Government can do the same for its Commission under Section 108); it also makes rules under the Act.
• Central Electricity Authority (CEA), the technical expert or "engineer of the system". Under Section 73 it advises the Government and lays down technical standards for plants and lines, safety requirements, grid standards and rules for installing meters; under Section 3(4) it prepares the National Electricity Plan once in five years. It does not fix tariffs.

Central and State Commissions

Function	Central Commission (Section 79)	State Commission (Section 86)
Tariff	Generating companies owned or controlled by the Central Government; other generating companies with a composite scheme for generating and selling in more than one State; inter-State transmission	Generation, supply, transmission and wheeling within the State; also regulates discoms' power purchase, including the price under their agreements
Licences	Inter-State transmission and inter-State trading	Licences within the State
Disputes	Involving generating companies or transmission licensees on these matters; may refer to arbitration	Between licensees and generating companies, or refer to arbitration (Section 86(1)(f))
Other	Specifies the Grid Code and standards of service	Must promote co-generation and renewable electricity, and may require every discom to buy a fixed percentage from such sources (Section 86(1)(e))

Wheeling means carrying electricity over a licensee's wires for someone else.

Appellate Tribunal for Electricity and other bodies

• Set up under Section 110. Under Section 111, any person aggrieved by an order of a commission or an adjudicating officer may appeal within 45 days.
• Section 125: appeal from the Tribunal to the Supreme Court within 60 days, only on the grounds in Section 100 of the Code of Civil Procedure, i.e. a substantial question of law.
• Forum of Regulators (Section 166), constituted by the Central Government, where heads of the Central and State Commissions meet to bring some uniformity.
• Grievance forums and the electricity ombudsman sit at the bottom of the ladder, close to the consumer.

Regulation (Section 178)	Order (Section 79)
Subordinate legislation; a general rule for everyone; can override terms of existing contracts	Decides a particular dispute
Validity challengeable only by judicial review (writ) in a High Court or the Supreme Court	Appealable to the Appellate Tribunal

Generation without a Licence

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Section 7: any generating company may establish, operate and maintain a generating station without a licence if it complies with the technical standards for grid connection. Before 2003 a power plant needed many permissions; this was a revolution. Exception, Section 8: a large hydroelectric station needs the concurrence of the CEA, because dams raise questions of safety, river use and water sharing.

Captive generation

Under Section 9, any person may build and operate a captive plant and dedicated transmission lines; for example, a cement factory may build its own power plant beside the factory. To check that a plant is really captive and not a disguised commercial plant, Rule 3 of the Electricity Rules, 2005 sets two tests:

1. Captive users hold at least 26 per cent of the ownership.
2. They consume at least 51 per cent of the electricity generated in a year.

A plant failing these tests is treated as an ordinary generating station, and its users lose captive benefits such as freedom from the cross-subsidy surcharge.

Licences for Transmission, Distribution and Trading

Section 12: no person shall transmit, distribute or trade in electricity unless he holds a licence under Section 14 or is exempted under Section 13. Generation is free; these three are licensed.

Under Section 14, the Appropriate Commission (Central Commission for inter-State matters, State Commission within a State) grants licences. Its provisos create deemed licensees who need not apply:

• The Central Transmission Utility and State Transmission Utilities (deemed transmission licensees).
• A Government that itself transmits or distributes electricity.
• A distribution licensee needs no separate licence for trading.

Parallel licences: a proviso allows a distribution licence to two or more persons in the same area, each using its own distribution system, to bring competition into distribution. Very few have been granted because a second network of wires is costly. In 2025 the Central Government proposed an Electricity Amendment Bill which, among other things, would let a discom use another licensee's network so that consumers could choose their supplier. But these proposals have not yet become law.

Exemption (Section 13): on the Government's recommendation, the Commission may exempt local bodies, panchayats, users associations, cooperative societies, non-governmental organisations and franchisees.

Franchisee (proviso to Section 14): a discom may give part of its area to another person to distribute on its behalf without a separate licence, but the discom remains responsible to consumers. This is how a private company can run distribution in a town while the licence stays with the State discom.

Open Access

The local discom, however, loses a big paying customer whose higher tariff helped keep tariffs low for farmers and poor households (cross-subsidy). So:

Charge	Provision	Purpose
Cross-subsidy surcharge	Section 42(2)	Compensates the discom for the lost cross-subsidy.
Additional surcharge	Section 42(4)	Covers fixed costs the discom has already incurred to serve the consumer.

Open access gives freedom, but at a price. To promote clean energy, the Green Energy Open Access Rules, 2022 allow consumers with a contracted demand or sanctioned load of 100 kilowatt or more to buy green power through open access, a much lower threshold than for ordinary open access.

How Electricity Tariffs Are Fixed

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A tariff is the price of electricity and the method of calculating it. It decides what a generator gets for the electricity it sells, what a transmission company gets for carrying it, and what a household pays.

A household bill usually has two parts: a fixed charge, which depends on the sanctioned load, and an energy charge, which depends on the units consumed.

The Electricity Act, 2003 gives two routes for fixing tariffs: determination by the commission (Section 62) and competitive bidding (Section 63).

Route 1: Determination by the Commission (Section 62)

The commission examines the costs of the generator or licensee (fuel, interest, depreciation and a reasonable return on equity) and then fixes the tariff. This is often called the cost-plus method. Section 62 covers four kinds of tariff:

1. supply by a generating company to a discom;
2. transmission;
3. wheeling;
4. retail sale to consumers.

No undue preference: Section 62(3)

The commission must not show undue preference to any consumer, but it may differentiate according to the load factor, power factor, voltage, total consumption, time of supply, geographical position of an area, nature of supply and purpose of supply. That is why a factory, a shop, a farm and a home pay different tariffs. The differences must rest on these grounds and cannot be arbitrary.

Guiding principles: Section 61

When making tariff regulations, the commission must keep in mind, among other things:

• commercial principles;
• competition and efficiency;
• safeguarding consumer interest while allowing reasonable recovery of costs;
• multi-year tariff principles;
• promotion of co-generation and renewable energy.

After the 2007 amendment, clause (g) says the tariff should progressively reflect the cost of supply and should also reduce cross-subsidies in the manner specified by the commission.

Procedure: Section 64

The applicant must publish its tariff petition, the public may file objections, and the commission must issue its tariff order within 120 days. Tariff fixing is thus a public process.

Route 2: Competitive Bidding (Section 63)

Notwithstanding Section 62, the commission shall adopt a tariff determined through a transparent process of bidding held under guidelines issued by the Central Government. The discom invites bids and the company offering the lowest tariff wins.

Point	Section 62: Determination	Section 63: Competitive bidding
How the tariff is reached	Commission fixes it after examining costs (cost-plus)	Commission adopts the tariff discovered in transparent bidding
Role of the commission	Examines fuel, interest, depreciation and return on equity	Does not examine costs again; only checks that bidding was transparent and followed the guidelines
Scope and use	Covers supply by a generator to a discom, transmission, wheeling and retail sale	Most new solar and wind projects today are awarded this way

Subsidy: Section 65

If a State Government wants a class of consumers, such as farmers, to pay less than the commission's tariff, it must pay the subsidy in advance. If it does not, its direction does not operate and the commission's tariff applies. This protects discoms from unfunded political promises.

Power Purchase Agreements and Disputes

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Once the price is fixed, buyer and seller sign a power purchase agreement (PPA), usually for 25 years. It fixes the tariff, quantity, payment terms and risks. Two clauses produce most of the litigation:

• Force Majeure clause: excuses a party when an event beyond its control, such as a flood or a war, prevents performance. "Force Majeure" is French for "superior force".
• Change in law clause: allows the tariff to be adjusted when a new law or tax raises or lowers the cost.

Forum for Disputes between Discoms and Generators

Fuel Price Risk, Force Majeure and Change in Law

Termination for Delay in a Solar Contract

Consumer Rights under the Electricity Act

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Who Is a Consumer: Section 2(15)

A consumer is any person supplied with electricity for his own use by a licensee, the Government or any other person supplying electricity to the public, and includes any person whose premises are for the time being connected to receive electricity.

Duty to Supply on Request: Section 43

Every distribution licensee shall, on an application by the owner or occupier of any premises, supply electricity to those premises within one month of receiving the application.

• A tenant is an occupier; the law does not limit supply to owners.
• If new mains or a new substation are needed, supply must follow as soon as that work is done, or within the period fixed by the Commission.
• For a village or hamlet with no supply arrangement at all, the Commission may extend the period.
• After the 2007 amendment, an Explanation requires the application to be complete in all respects, with the required documents and payment of necessary charges.
• Under sub-section (3), a discom that fails to supply in time is liable to a penalty of up to ₹1,000 for each day of default.

Universal Service Obligation and Section 44

This duty is called the universal service obligation: a discom cannot pick and choose its customers. Like a railway that must carry every passenger with a ticket, it must connect every applicant who fulfils the conditions. Section 44 gives the only excuse: the discom is not bound to supply if it is prevented by cyclone, floods, storms or other occurrences beyond its control.

Rights and Tools of the Discom

• Sections 45 to 47: recover the tariff and other charges, recover the expense of giving the connection, and ask for reasonable security.
• Section 50: the State Commission makes an Electricity Supply Code covering recovery of charges, billing intervals, disconnection for non-payment, restoration of supply, prevention of tampering and entry of the discom's staff into premises.
• Section 55: electricity must be supplied only through a correct meter installed under the CEA's regulations.

Protection against Disconnection: Section 56(1)

If a consumer neglects to pay a charge, the licensee may cut off supply only after not less than 15 clear days' notice in writing. Under the proviso, supply shall not be cut if the consumer deposits under protest, while the dispute is pending, either the amount claimed or the average monthly charge of the preceding six months, whichever is less. A consumer with a genuine billing dispute can thus keep the lights on.

Two-Year Limitation: Section 56(2)

No sum due from a consumer is recoverable after two years from the date it first became due, unless it has been shown continuously as arrears in the bills; and in such a case the licensee shall not cut off supply.

Standards of Performance and Grievance Redressal

• Section 57: the Commission fixes standards of performance (for example, how quickly a fault must be repaired or a new meter installed). A licensee that fails them must pay compensation to the affected person, as the Commission decides, within 90 days.
• Section 42(5) and (6): every discom must set up a forum for redressal of consumer grievances; a dissatisfied consumer may go to the electricity ombudsman appointed by the State Commission.

Consumer Protection Law Saved: Section 173

Nothing in the Electricity Act has effect so far as it is inconsistent with the Consumer Protection Act, the Atomic Energy Act or the Railways Act. The Act names the Consumer Protection Act of 1986, now replaced by the Consumer Protection Act, 2019. A consumer facing a deficiency in electricity service, such as a wrong bill or a careless disconnection, can therefore also approach a consumer commission.

Electricity (Rights of Consumers) Rules, 2020

Made by the Central Government in December 2020, these rules turn the duties of discoms into clear, enforceable timelines. After a 2024 amendment, a new connection must generally be given within:

Area	Time limit for a new connection
Metropolitan areas	3 days
Other municipal areas	7 days
Rural areas	15 days
Hilly rural areas	30 days

The rules also cover metering, billing, disconnection, reliability of supply, standards of performance, compensation and call centres.

Leading Cases on Consumer Rights and Duties

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Must a New Owner Pay the Old Owner's Dues?

Strict Liability for Live Wires

Limits of a Special Statutory Forum

Point	Punjab SEB v. Guru Nanak Cold Storage	Gujarat Urja Vikas Nigam v. Essar Power
Law	Old electricity Acts	Electricity Act, 2003
Dispute	Consumer's claim for damages for disconnection	Dispute between a discom and a generator
Outcome	Outside the special statutory arbitration; ordinary civil claim	The Act itself sends the dispute to the Commission

Unauthorised Use and Theft of Electricity

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The Act draws a sharp line between two kinds of misuse: unauthorised use, a civil matter, and theft, a crime.

Unauthorised Use: Section 126

The Explanation lists five forms. Electricity is used:

1. by artificial means;
2. by a means not authorised by the licensee;
3. through a tampered meter;
4. for a purpose other than the authorised one;
5. for premises other than the authorised premises.

Procedure

1. An assessing officer inspects the premises.
2. If he concludes that unauthorised use is taking place, he makes a provisional assessment and serves it on the occupier.
3. The occupier may file objections, after which a final assessment is made.

• The assessment covers the whole period of unauthorised use; if that period cannot be found, the 12 months before the inspection.
• Charges are calculated at twice the normal tariff.
• Section 127: appeal to an appellate authority within 30 days, only after depositing half the assessed amount.
• Section 145: civil courts cannot entertain suits on matters the assessing officer or appellate authority is empowered to decide.

Theft: Section 135

The key word is dishonestly. Whoever dishonestly taps a licensee's lines, tampers with a meter, uses a tampered meter, damages a meter so as to interfere with accurate metering, or uses electricity for an unauthorised purpose, commits theft.

• Punishment: imprisonment up to three years, or fine, or both.
• First conviction: fine not less than three times the financial gain from the theft.
• Second conviction: fine not less than six times the gain.
• Where the load stolen exceeds 10 kW, a second conviction also carries imprisonment of at least six months, extendable to five years.

Procedural provisions

• Section 151B (2007 amendment): offences under Sections 135 to 140 and Section 150 are cognizable and non-bailable.
• Section 153: States may set up Special Courts for speedy trial.
• Section 152: some cases may be compounded, i.e., settled by paying a fixed sum instead of facing trial.

Unauthorised Use and Theft Compared

Point	Unauthorised use (Section 126)	Theft (Section 135)
Nature	Civil matter	Crime
Intention	No dishonest intention needed	Dishonesty needed
Consequence	Civil assessment at twice the tariff	Criminal punishment
Decided by	Assessing officer and appellate authority	Criminal court, usually a Special Court

Consumer Commission Has No Jurisdiction

The Electricity Rules and Other Rules

▶ Watch this part of the lecture (1:20:34)

The Act gives the framework; much of the detail lives in rules. Under Section 176, the Central Government makes rules to carry out the Electricity Act. The most important set is the Electricity Rules, 2005, notified on 8 June 2005.

• Rule 3 (captive generating plant): tests of 26% ownership and 51% consumption, and how they apply to a cooperative society, an association of persons and a special purpose company owning a power station. If captive users fail the consumption test in any year, all the plant's electricity that year is treated as supply by an ordinary generating company.
• Rule 7: the grievance forum under Section 42(5) shall consist of officers of the discom itself. That is why the ombudsman under Section 42(6), appointed or designated by the State Commission, is such an important second level.
• Rule 8: where the Central Commission has fixed a generating company's tariff, a State Commission cannot determine it again.
• Rule 9: an inter-State trading licensee may also buy from a seller in a State and resell to a buyer in the same State without a separate State licence.
• Other rules: directions of load despatch centres, the surcharge for inter-State open access, and the working of police and courts in theft cases until Special Courts are set up.

Recent Amendments

• Electricity Amendment Rules, December 2022: automatic monthly pass-through of changes in fuel and power purchase costs. Earlier, when coal became costlier, a discom waited months for the Commission to allow a higher tariff while its losses grew. Now the change is passed on monthly through a formula fixed by the State Commission, and the account is corrected once a year.
• 2025 amendment: allowed consumers to own, lease or operate energy storage systems, such as large batteries.

Other Sets of Rules

• Electricity Late Payment Surcharge and Related Matters Rules, 2022: made because discoms were not paying generators on time. They fix a surcharge on delayed payments, allow old dues to be cleared in instalments, and allow supply to a defaulting discom to be regulated.
• Green Energy Open Access Rules, 2022: promote the purchase of clean power.
• Electricity (Rights of Consumers) Rules, 2020: enforceable timelines for ordinary consumers.

Safety: From the 1956 Rules to CEA Regulations

Section 185 of the Act of 2003 kept the old Indian Electricity Rules, 1956 alive until the CEA made safety regulations under Section 53. The CEA did so in 2010 (regulations on measures relating to safety and electric supply) and replaced them with new safety regulations in 2023. Electrical safety today is governed mainly by CEA regulations.

The Energy Conservation Act, 2001

Every unit of energy saved need not be produced and causes no pollution, so saving energy is often the cheapest and cleanest source of energy. This idea lies behind the Act, which received assent on 29 September 2001; its main provisions came into force on 1 March 2002. It does not ban energy use: it sets standards, requires information and audits, and penalises those who ignore their duties.

1. Bureau of Energy Efficiency (Sections 3 and 13)

Section 3 creates the Bureau of Energy Efficiency, the Central Government's expert body on energy efficiency, managed by a Governing Council. Under Section 13 it recommends standards for appliances and buildings, prepares codes, arranges training, certifies energy managers and accredits energy auditors.

2. Appliances (Section 14)

The Central Government can fix energy consumption standards for notified equipment and appliances and require them to carry labels: the familiar star label on an air conditioner or refrigerator. More stars mean less electricity for the same work, helping buyers choose efficiently.

3. Designated Consumers

The Central Government can declare an energy-intensive user a designated consumer. The Schedule lists such industries, including power stations, fertilisers, cement, iron and steel, aluminium, pulp and paper, textiles and railways. A designated consumer must appoint a certified energy manager, get an energy audit by an accredited energy auditor, report its energy use, and follow the energy consumption norms fixed for it.

Energy savings certificates and Perform, Achieve and Trade

A 2010 amendment added energy savings certificates under Section 14A, on which the Government based the market scheme Perform, Achieve and Trade. Each designated consumer gets a target to reduce its energy use per unit of product. Beating the target earns certificates; falling short means buying certificates from others or facing a penalty.

4. Buildings (Section 15)

The Central Government prescribes an energy conservation code for buildings, which States can modify to suit local climate. Section 15 empowers State Governments to enforce the code, designate a State agency for energy conservation and direct energy audits.

5. Penalties (Section 26)

Failure to comply with the main directions (appointing an energy manager, getting an energy audit, following the norms) may attract a penalty of up to ₹10 lakh, and up to ₹10,000 for every day of continuing failure. Since the 2022 amendment, Section 26 also adds further penalties: where energy consumption norms are breached by an industrial unit or vessel, up to twice the price of every metric ton of oil equivalent consumed in excess of the norms; for vehicle manufacturers, a penalty for each non-compliant vehicle sold; and for non-conforming appliances, a penalty for each appliance. Penalties are imposed by an adjudicating officer after an inquiry. Since the 2010 amendment, the Appellate Tribunal for Electricity hears appeals under this Act too.

The Energy Conservation Amendment Act, 2022

Assented to on 19 December 2022, it made four major changes:

1. the Central Government may specify a carbon credit trading scheme;
2. designated consumers may be required to meet a minimum share of energy needs from non-fossil sources, such as green hydrogen or renewable electricity;
3. the building code became the Energy Conservation and Sustainable Building Code, which also applies to large residential buildings;
4. vehicles and vessels were brought within energy consumption norms.

It also enlarged the Bureau's Governing Council.

Carbon Credit Trading Scheme, 2023

Notified on 28 June 2023, the scheme creates an Indian carbon market. One carbon credit certificate = one tonne of carbon dioxide equivalent reduced or removed. Heavy industries get targets to reduce the greenhouse gas emission intensity of their products (emissions per tonne of product); in 2025 and early 2026, targets were notified for aluminium, cement, chlor-alkali, pulp and paper, petroleum refining, petrochemicals and textiles. Beating the target earns credits; failing means buying them. The Act, which began as a law on saving energy, is now the base of India's carbon market.

Public-Private Partnership in the Power Sector

▶ Watch this part of the lecture (1:29:43)

Why was it needed? Power plants and networks cost thousands of crores of rupees. After the State Electricity Boards fell into losses, the public sector alone could not meet demand, so India opened the sector in stages, each creating a new form of partnership.

Forms of Partnership

1. Private generation: from 1991, private companies could build generating stations and sell power to the State Boards.
2. Competitive bidding under Section 63: Central Government guidelines of 19 January 2005 for procuring power through tariff-based bidding; the lowest tariff wins.
3. Ultra Mega Power Projects: launched by the Ministry of Power around 2006; very large coal-based plants of about 4,000 MW each. The Government does the difficult groundwork first: special companies set up by the Power Finance Corporation first acquire land, obtain clearances and arrange fuel and water, and are then handed over to the private bidder quoting the lowest tariff. Sasan (Madhya Pradesh) and Krishnapatnam (Andhra Pradesh) went to Reliance Power; Mundra (Gujarat) went to Tata Power. The Mundra imported-coal dispute in the tariff cases shows how risk allocation in such partnerships finally reaches the courts.
4. Private transmission: inter-State transmission projects are awarded through tariff-based competitive bidding under guidelines first issued in 2006; the winner builds the line and earns a fixed transmission charge for many years.
5. Private distribution: under the Delhi Electricity Reform Act, 2000, the Delhi Vidyut Board was split up, and in 2002 its distribution business went to BSES Rajdhani, BSES Yamuna and North Delhi Power Limited (now Tata Power Delhi Distribution). In each, the private partner holds 51% and the Delhi Government 49%.
6. Distribution franchise: the discom keeps its licence, but a private company runs distribution in a particular area. The first in India was Torrent Power for the Bhiwandi circle in Maharashtra (agreement signed in December 2006).

Most solar and wind power in India today also comes from private developers selected through auctions by public agencies such as the Solar Energy Corporation of India.

Legal Lessons

1. The contract must allocate risks clearly, especially fuel risk, change in law and delay in land or clearances.
2. The buyer must pay on time, which is why the late payment surcharge rules were made.
3. Sanctity of contracts matters: if a Government reopens tariffs after a private company has invested, investors lose confidence.
4. The regulator must protect consumers, so that private profit does not become public loss.

Oil, Petroleum and Natural Gas: The Oil and Gas Chain

▶ Watch this part of the lecture (1:33:52)

Electricity is only one part of the energy story. Cars, trucks, tractors, ships and aeroplanes run on oil; many homes cook on gas; factories use gas to make fertilisers and steel. India also imports most of its crude oil. Energy Law therefore cannot be understood through electricity alone: the law governs oil and gas from the well to the petrol pump and the gas pipeline in the kitchen.

Basic terms

• Crude oil: the thick liquid that comes out of the ground. It is not used directly.
• Refinery: breaks crude oil into useful products such as petrol, diesel, kerosene, aviation fuel and liquefied petroleum gas (LPG, the cooking gas in cylinders).
• Natural gas: found underground, often along with oil.
• Liquefied natural gas (LNG): natural gas cooled until it becomes a liquid; it can be carried by ships.
• Compressed natural gas (CNG): natural gas compressed and filled in vehicles.
• Piped natural gas (PNG): natural gas supplied to homes through pipes.
• Hydrocarbons: a general word for oil and gas, because they are made of hydrogen and carbon.

The three stages of the industry

Stage	What it covers
Upstream	Exploration and production: searching for oil and gas under land or sea and taking it out.
Midstream	Transport and storage: pipelines, tankers and storage tanks.
Downstream	Refining, marketing and distribution: petrol pumps, gas agencies and city gas networks.

Evolution and Historical Background of Oil and Gas

• 1889: oil was struck at Digboi in Assam, where the story of oil in India began.
• 1901: a refinery started working at Digboi. For the next half century oil was produced on a small scale by private and foreign companies.
• After independence: the Government decided that the search for oil should be led by the public sector.
• August 1956: the Oil and Natural Gas Commission was formed; it became a statutory body in 1959. Oil India Limited also traces its origin to 1959.
• February 1974: the Commission discovered the huge offshore field of Bombay High, which began production in May 1976. In the same decade the Government took over the Indian businesses of foreign oil marketing companies.
• Administered pricing mechanism: for many years the Government controlled the prices of petroleum products. This mechanism was dismantled on 1 April 2002, except for kerosene sold through ration shops and domestic cooking gas.
• Opening up (late 1990s): private and foreign companies were invited to explore for oil and gas under the New Exploration Licensing Policy.
• 2006: Parliament created an independent regulator for the midstream and downstream sectors.
• 2016: the Government adopted a new licensing policy.
• 2025: Parliament modernised the old oilfields law.

Who Regulates Oil and Gas

Oil and gas fall under Entry 53 of the Union List, and under Article 297 all minerals under the seas vest in the Union. The Union therefore dominates this sector. Several bodies share the work:

• Ministry of Petroleum and Natural Gas: makes policy and signs contracts for exploration.
• Directorate General of Hydrocarbons (set up in 1993): the technical arm of the Ministry for the upstream sector; manages exploration contracts and data.
• Petroleum and Natural Gas Regulatory Board (PNGRB): regulates the midstream and downstream sectors, but not production.
• Petroleum and Explosives Safety Organisation (PESO): based in Nagpur and headed by the Chief Controller of Explosives; grants safety licences under the Petroleum Act, the Explosives Act and the gas cylinder rules.
• Oil Industry Safety Directorate (set up in 1986): lays down safety standards for oil and gas installations.

The Petroleum Act, 1934

▶ Watch this part of the lecture (1:38:49)

Petrol and diesel catch fire easily, and a single careless act at a fuel depot can kill many people. The Petroleum Act, 1934 therefore regulates the import, transport, storage, production, refining and blending of petroleum, mainly for safety.

Definition and classes of petroleum: Section 2

Section 2 defines petroleum as any liquid hydrocarbon or mixture of hydrocarbons, and any inflammable mixture containing liquid hydrocarbons.

Class	Flash point	Example
Petroleum Class A	Below 23°C	Petrol
Petroleum Class B	23°C or more but below 65°C	Kerosene and diesel
Petroleum Class C	65°C or more but below 93°C	Furnace oil

The stricter rules apply to the more dangerous classes.

The core rule and rule-making power

• Section 3: no one shall import, transport or store petroleum except in accordance with the rules made under Section 4 and, where the rules require a licence, under a licence.
• Section 4: the Central Government may make rules on matters such as the places of import, the conditions of licences, the authorities who grant them, and the design of containers.
• Penalties: small fines and short imprisonment, because the Act is a safety law rather than a criminal law.

The Petroleum Rules, 2002

The detailed law is in the Petroleum Rules, 2002, notified on 13 March 2002, which replaced the Petroleum Rules of 1976. They lay down conditions for storage tanks, tankers, petrol pumps, safety distances and fire protection. The licensing authority is the Chief Controller of Explosives.

The Explosives Laws and Gas Cylinders

Two other statutes are often confused with the Petroleum Act.

The Explosives Act, 1884: a regulatory law

• Section 5: the Central Government may make rules for regulating, by licence, the manufacture, possession, use, sale, transport, import and export of explosives.
• Section 7: the Central Government may make rules for the entry, inspection, search and seizure of explosives.

Under these two sections the Government has made rules for gas cylinders. The first Gas Cylinders Rules were made in 1981; they were replaced in 2004; today the Gas Cylinders Rules, 2016 apply. They govern the design, filling, testing, storage and transport of cylinders containing compressed gases, including the domestic cooking gas cylinder and the CNG cylinder in a car. When a cooking gas cylinder is filled, stored in a godown and delivered to a house, every step is governed by rules made under the Explosives Act.

The Explosive Substances Act, 1908: a criminal law

This Act is completely different. It is aimed at the malicious use of explosives, such as bomb attacks.

• Section 3: punishes causing an explosion likely to endanger life or property.
• Section 4: punishes attempting to cause such an explosion, or making or keeping explosives with that intent.
• Section 5: punishes possessing explosive substances in suspicious circumstances, and puts on the accused the burden of showing a lawful object.
• 2001 amendment: certain powerful explosives, such as RDX, are treated as a special category; causing an explosion with them can be punished with death or rigorous imprisonment for life.
• Section 7: a prosecution needs the consent of the District Magistrate.

Comparison

Point	Explosives Act, 1884	Explosive Substances Act, 1908
Purpose	To prevent accidents	To punish crime
Method	Licences and rules	Heavy criminal punishment
Typical violator	A gas agency storing cylinders without a licence	A person who keeps a bomb

The Oilfields (Regulation and Development) Act, 1948

▶ Watch this part of the lecture (1:43:37)

Moving upstream to the search for oil and gas, this Act regulates oilfields and the development of mineral oil resources.

• Section 3: defines mineral oils to include natural gas and petroleum.
• Sections 5 and 6: the Central Government makes rules for the grant of leases and for the conservation and development of mineral oils.
• Section 6A (inserted in 1969): the holder of a lease must pay royalty on the oil and gas produced, at the rates in the Schedule.

For decades this short Act worked mainly through its rules. But the industry changed: new kinds of hydrocarbons, like shale gas and coal bed methane, became important, and investors wanted stable and modern law.

The Oilfields (Regulation and Development) Amendment Act, 2025

The Amendment Act received assent on 28 March 2025. Its main changes:

1. Wider definition of mineral oils: any naturally occurring hydrocarbon, including coal bed methane, shale gas and shale oil, tight gas and gas hydrates. Coal, lignite and helium are excluded.
2. Petroleum lease: the old mining lease is replaced by a petroleum lease, covering the whole range of activities from exploration to production.
3. New Section 4A: no one shall carry on these operations, on land or at sea, except under a petroleum lease.
4. Stability for investors: the terms of a lease cannot be changed later to the disadvantage of the lessee.
5. Wider rule-making power: sharing of data and infrastructure, safety, decommissioning of old fields, reducing carbon emissions and setting up renewable energy projects in oilfields.
6. Decriminalisation: most violations are no longer prosecuted. An adjudicating authority of the rank of Joint Secretary or above can impose a penalty of up to ₹25 lakh, plus up to ₹10 lakh for every day the violation continues. Appeals go to the Appellate Tribunal for Electricity, which also serves as the appellate tribunal for the petroleum regulator.

Existing leases and licences are saved.

The Petroleum and Natural Gas Rules, 1959 and the Petroleum Exploration Licence

Made under the Oilfields Act, these Rules created the two classic concessions of the oil world.

• Rule 4: no one shall prospect for petroleum without a petroleum exploration licence, and no one shall mine petroleum without a petroleum mining lease.
• A petroleum exploration licence permits searching for oil and gas in an area.
• A petroleum mining lease permits producing them commercially after a discovery.

Who grants them: Rule 5

Rule 5 follows Article 297:

Area	Grantor	Royalty goes to
Offshore (vests in the Union)	Central Government	Central Government
Onshore (petroleum vests in the State)	State Government, only with the prior approval of the Central Government	State Government

• An exploration licence is granted for 4 years, with extensions of one year at a time until the exploration period ends.
• A mining lease is ordinarily granted for 20 years over an area of about 250 square kilometres.
• The lessee pays royalty to the Government that owns the petroleum.

In 2025, after the amendment of the Oilfields Act, the Government moved to replace the 1959 Rules with new rules built around a single petroleum lease.

The Hydrocarbon Licensing Regime

The rules say what kind of licence is needed; the licensing policy and the contract signed with the Government decide which company gets the licence and on what economic terms.

The nomination regime

In the early years the Government simply nominated its own companies, the Oil and Natural Gas Commission and Oil India, to explore particular areas. In the 1980s and 1990s some blocks were offered to private companies in limited rounds.

The New Exploration Licensing Policy (NELP)

• Approved in 1997; first round of bidding in 1999.
• Private and foreign companies could compete with public companies on equal terms.
• Nine rounds were held between 1999 and 2012.
• The contract used was the production sharing contract: the company first recovers its costs from the oil and gas produced; the remaining production, called profit petroleum, is shared between the company and the Government.
• The problem: the Government had to check every cost claimed, which led to long disputes. A company had little reason to keep costs low, because higher costs meant a larger recovery before sharing.

The Hydrocarbon Exploration and Licensing Policy (HELP), March 2016

HELP replaced NELP and made four major changes:

1. Revenue sharing contract: the Government gets a share of the gross revenue from the very beginning, so there is no need to check costs.
2. Uniform licence: one licence covers all kinds of hydrocarbons, conventional and unconventional. Earlier, a company that found shale gas in its oil block needed a separate licence.
3. Open acreage licensing: a company can choose an area and express interest at any time, instead of waiting for the Government to offer blocks. Open acreage bidding started in 2017, supported by a National Data Repository of geological data.
4. Marketing and pricing freedom: companies may market their gas and fix its price, subject to some conditions.

Point	Production sharing contract (NELP)	Revenue sharing contract (HELP)
What the Government shares	Profit, after costs are recovered	Revenue, from day one
Administration	Needs heavy monitoring of costs	Simpler to administer

Reliance Natural Resources Limited v. Reliance Industries Limited

▶ Watch this part of the lecture (1:51:06)

This is the most important case in Indian oil and gas law. It arose from a family dispute but decided who really controls the natural gas under India's seas.

The Oil Industry (Development) Act, 1974

This Act answers how the Government finances the development of the oil industry.

• It created the Oil Industry Development Board.
• Section 15: a cess (a tax for a specific purpose) is levied on crude oil and natural gas produced in India.
• The money first goes to the Consolidated Fund of India; Parliament may then make it available to the Board.
• The Board uses the funds to give financial and other assistance for activities that help develop the oil industry, such as exploration, research and training.
• The company that runs India's strategic petroleum reserves is a subsidiary of this Board.

The Petroleum and Natural Gas Regulatory Board Act, 2006

▶ Watch this part of the lecture (1:55:19)

Before 2006 there was no independent regulator for pipelines, city gas networks and petroleum marketing. As the sector opened to private companies, new questions arose: who may lay a gas pipeline, whether a pipeline owner can refuse to carry gas for others, and who decides which company will supply gas to a city. Parliament answered with the PNGRB Act, 2006.

Aims (Preamble)

• To regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas, excluding the production of crude oil and natural gas.
• To protect the interests of consumers and companies.
• To ensure uninterrupted and adequate supply in all parts of the country.
• To promote competition.

Functions of the Board: Section 11

• Protects consumer interests by fostering fair trade and competition.
• Registers companies that market petroleum products and set up storage facilities and LNG terminals.
• Authorises entities to lay, build and operate common carrier or contract carrier pipelines and city or local gas distribution networks.
• Regulates access to these facilities and their transportation tariffs.
• Lays down technical standards, including safety standards.

The authorisation system

The authorisation system is the heart of the Act.

• Sections 16 to 19: no one can lay a pipeline or build a city gas distribution network without the Board's authorisation. The Board selects entities through a transparent process, often competitive bidding.
• Section 20: the Board may declare a pipeline a common carrier or a contract carrier.
• Exclusivity: when the Board authorises a company to develop a city gas network, it may give a period of exclusivity so that the company can recover its investment.
• Section 22: the Board fixes transportation tariffs for pipelines by regulations.

Common carrier	Contract carrier
Must carry gas for other users on a non-discriminatory basis, like a public road.	Carries gas under firm contracts with specific users.

Disputes, penalties and appeals

• Sections 24 and 25: a bench of the Board decides disputes between entities and has the powers of a civil court.
• Section 28: civil penalty of up to ₹1 crore for each contravention, with further amounts for continuing contraventions and higher penalties for restrictive trade practices.
• Appeals: to the Appellate Tribunal for Electricity, which serves as the appellate tribunal under this Act too, and from there to the Supreme Court.

Limits of the Board's power

Safety and Energy Security in Oil and Gas

Safety

Oil and gas are inflammable and sometimes explosive, and accidents can be disastrous. In May 2020 a gas well of Oil India at Baghjan in the Tinsukia district of Assam blew out; in June it caught fire. The fire could be fully controlled only in November, and it damaged the surrounding villages, wetlands and a national park. Such accidents show why safety standards, emergency plans and strict licensing matter.

Energy security

• India imports close to nine-tenths of the crude oil it uses, so any war or disruption in the oil-producing regions of the world can raise prices overnight.
• Strategic petroleum reserves: large underground rock caverns filled with crude oil at Visakhapatnam, Mangaluru and Padur, with a total capacity of about 5.33 million tonnes, built to cushion such shocks.
• Domestic gas pricing reform (April 2023): the price of gas from older fields was linked to 10% of the price of the Indian basket of crude oil, within a floor and a ceiling.

The law of oil and gas is therefore not only about licences; it is also about protecting the country from shocks.

Coal, Mining and Nuclear Energy: Development of Mines and Coal in India

▶ Watch this part of the lecture (2:01:47)

Coal still produces most of India's electricity and is India's largest domestic source of energy. Unlike crude oil, most of which is imported, India has huge coal reserves under its own land, mainly in Jharkhand, Odisha, Chhattisgarh, West Bengal, Madhya Pradesh and Telangana. But coal lies under forests, farms and villages, often where tribal communities live. Coal law must therefore deal at once with ownership of minerals, acquisition of land, the rights of local people, the safety of miners and protection of the environment.

Early mining and safety law

• Commercial coal mining began in the late eighteenth century in the Raniganj coalfield of Bengal, under the East India Company. The railways increased demand and many private collieries opened.
• Because mining is dangerous, the first mining safety law came in 1901. It was replaced by the Mines Act, 1923, and then by the Mines Act, 1952, which came into force on 1 July 1952.
• A government office for the inspection of mines was set up in 1902; its headquarters moved to Dhanbad in 1908. Since 1967 it has been called the Directorate General of Mines Safety (DGMS), still based in Dhanbad.
• In 1952 Parliament also passed the Coal Mines (Conservation, Safety and Development) Act, which set up a Coal Board to promote conservation and safety. It was replaced by the Coal Mines (Conservation and Development) Act, 1974, which dissolved the Coal Board from 1 April 1975.

Nationalisation of coal

By the 1960s private coal mining had a bad name. Official records of the Ministry of Coal describe the ills of that period as unscientific mining, environmental degradation and exploitation of labour. Many owners dug out the easy coal, left the rest wasted and ignored workers' safety. The Government nationalised the industry in steps:

1. 1971: management of coking coal mines (which supply coal for making steel) taken over.
2. Coking Coal Mines (Nationalisation) Act, 1972: nationalised them from 1 May 1972; Bharat Coking Coal Limited was formed to run them.
3. 1973: management of the other coal mines taken over first, and then they were nationalised.
4. November 1975: Coal India Limited formed as the holding company for the nationalised mines.

Parliament and the Protection of Natural Resources

Mines and minerals are shared between the Union and the States. Entry 54 of the Union List gives Parliament power over the regulation of mines and mineral development, but only to the extent that Parliament declares by law that Union control is expedient in the public interest. The key technique of Parliament is therefore the declaration. Section 2 of the MMDR Act, 1957 contains exactly such a declaration. Once Parliament has declared, the States can act only within the space the central law leaves to them.

How Parliament has used this power

• 1970s: nationalised coal.
• 2015: introduced auctions.
• 2020: opened coal to commercial mining.
• 2023: created a special regime for critical minerals, like lithium.
• 2025: made further reforms.

Parliament also keeps watch through its committees and through the reports of the Comptroller and Auditor General, which are laid before it. In 2012 a CAG report criticised the allocation of coal blocks without competitive bidding and estimated very large windfall gains to private allottees. That report set the stage for the coal block litigation.

Natural resources as public trust

Natural resources like coal are national wealth. The State holds them in trust for the people and must deal with them fairly and for the common good.

The Regulatory Mechanism of Mines

Many bodies regulate a single coal mine, and their roles must be kept apart:

Body	Role
Ministry of Coal	Makes policy for coal; through the Central Government, controls the allocation of coal blocks.
State Government	Grants the mining lease and collects royalty; for coal it needs the previous approval of the Central Government.
DGMS	Enforces the safety law in mines.
Coal Controller's Organisation	Permission to open or reopen mines, grading of coal and coal statistics.
Indian Bureau of Mines (Ministry of Mines)	For minerals other than coal, petroleum, atomic minerals and minor minerals: approves mining plans and looks after conservation.
Ministry of Environment	Environmental and forest clearances.
Coal Mines Provident Fund Organisation	Provident fund and pensions of coal workers.

The Mines and Minerals (Development and Regulation) Act, 1957

▶ Watch this part of the lecture (2:08:04)

The main law on mining is the MMDR Act, 1957.

Section 4: the basic rule

No person shall undertake any reconnaissance, prospecting or mining operations in any area except under a reconnaissance permit, a prospecting licence or a mining lease. Section 4 also bars transporting or storing minerals without lawful authority.

Operation	Meaning
Reconnaissance	A quick preliminary survey.
Prospecting	Exploring to find out whether a mineral exists and in what quantity.
Mining	Actually taking the mineral out.

Section 5: restrictions on grant

• The holder must be an Indian national or a company registered in India.
• For minerals in Parts A and B of the First Schedule, no permit, licence or lease can be granted without the previous approval of the Central Government. Coal is a Part A mineral, so every coal lease needs central approval.
• Evidence of the mineral and an approved mining plan are required before a lease is granted.

Section 9: royalty

Royalty is the payment made to the owner of the mineral for every tonne removed. The rates are in the Second Schedule; the Central Government may revise them, but not more than once in three years. The Supreme Court held in 2024 that royalty is not a tax.

The 2015 amendment

• Made auction the normal method of granting mineral concessions.
• Fixed the period of mining leases for most minerals at 50 years, after which the area goes back to auction.
• Section 9B: every mining-affected district has a District Mineral Foundation, a trust working for the benefit of people and areas affected by mining. Lessees pay into it an amount linked to royalty, up to one-third of the royalty for new leases.
• Section 9C: a national trust for mineral exploration, funded by lessees at 2% of royalty.

Later amendments

• 2020 (Mineral Laws Amendment Act): removed the restriction that coal could be mined only for one's own use; private companies can now mine coal and sell it in the market.
• 2021: captive mines allowed to sell part of their output; non-auctioned leases became transferable.
• 2023: a list of 24 critical and strategic minerals added; a new exploration licence created for deep-seated and critical minerals. Six minerals, including lithium, were removed from the list of atomic minerals so that they could be auctioned. Lithium matters for batteries, and batteries matter for clean energy.
• 2025: the national exploration trust renamed the National Mineral Exploration and Development Trust; contribution raised from 2% to 3% of royalty; new minerals may be added to an existing lease; a one-time extension of lease area allowed; the Centre empowered to set up mineral exchanges; the cap on sales by captive mines removed.

Illegal mining

• Section 21: mining without a lease or permit is punishable with imprisonment up to 5 years and a fine that may extend to ₹5 lakh per hectare of the area. The offence is cognizable. Minerals, tools and vehicles used in illegal mining can be seized.
• Section 23C: States may make rules to prevent illegal mining, transport and storage, for example through check posts and weighbridges.

The Coal Mines (Nationalisation) Act, 1973

▶ Watch this part of the lecture (2:12:04)

This law shaped the coal industry for forty-five years.

• Appointed day: 1 May 1973.
• Section 3(1): on the appointed day, the right, title and interest of the owners in the coal mines listed in the Schedule were transferred to the Central Government and vested absolutely in it, free from all incumbrances, meaning the mines passed to the Government clean, without any mortgage or charge attached.
• The former owners received compensation under the Act.

Restriction on who could mine coal: captive mining

• 1976 amendment: ended private coal mining, with one exception: private companies producing iron and steel could mine coal for their own use. This is captive mining.
• 1993: the exception was widened to include power generation, washing of coal and other end uses notified by the Government.
• 1996: production of cement notified as another end use.
• For decades coal was a public sector monopoly; private companies could mine only for their own plants. A Bill to open coal to private commercial mining was introduced in 2000, but it never passed.

Status today

The Act no longer exists. The Coal Mines (Special Provisions) Act, 2015 had created a new system for allocating coal mines, so Parliament repealed the Coal Mines (Nationalisation) Act and the Coking Coal Mines (Nationalisation) Act through the Repealing and Amending (Second) Act, 2017; the repeal took effect in January 2018.

The Coal Block Allocation Case

Because of the monopoly, private steel, power and cement companies could get coal only by being allocated a captive coal block. From 1993 blocks were allocated through a Screening Committee of the Government, and some were allocated to State Government companies through the Government dispensation route. There was no auction, and there were allegations that valuable blocks were being handed out without any fair process.

The Coal Mines (Special Provisions) Act, 2015

After the judgment the Government had to reallocate the cancelled blocks quickly. It issued an ordinance on 21 October 2014, which became the Coal Mines (Special Provisions) Act, 2015. The Act received assent on 30 March 2015 but is deemed to have come into force from the date of the ordinance.

The three Schedules

• Schedule I: all the cancelled blocks.
• Schedule II: the 42 blocks covered by the order of September 2014.
• Schedule III: 32 blocks earmarked for specified end uses.

An officer called the Nominated Authority, not below the rank of Joint Secretary, conducts the auctions and allotments and issues orders vesting the mines in the successful bidders.

At first the auctions were for specified end uses, such as power and steel. The Mineral Laws Amendment Act, 2020 removed this end-use restriction, and from June 2020 the Government began auctioning coal blocks for commercial mining, in which the successful bidder can sell the coal in the open market. After nearly fifty years private commercial coal mining returned to India, this time through transparent auctions.

Mining Lease in the Coal Sector

Section 11A of the MMDR Act allows the Central Government to select companies for coal by auction through competitive bidding. It also allows allotment without auction to Government companies, and to a power generator that won its project through competitive tariff bidding.

The Coal Bearing Areas (Acquisition and Development) Act, 1957

▶ Watch this part of the lecture (2:19:35)

This special law allows the Central Government to acquire land that contains coal. It works in stages:

1. Section 4 (preliminary notification): if the Central Government is satisfied that coal is likely to be found in a locality, it issues a preliminary notification. Its officers may then enter the land to survey, dig and bore.
2. Section 7 (notice of intention): within two years, extendable by one more year, the Government must give notice of its intention to acquire the land; otherwise the first notification lapses.
3. Section 8 (objections): any interested person may object within 30 days. The Act expressly says that the wish of a person to mine the coal himself is not a valid objection.
4. Section 9 (declaration): the Government declares the acquisition.
5. Section 10 (vesting): on publication of the declaration, the land vests absolutely in the Central Government, free from all encumbrances.
6. Section 11 (vesting in a Government company): the Government may direct that the land shall vest in a Government company, such as a subsidiary of Coal India.
7. Sections 13 and 14 (compensation): paid by agreement or as fixed by a Tribunal headed by a person who is or has been a High Court judge.

Link with the 2013 land acquisition law

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 lists the Coal Bearing Areas Act in its Fourth Schedule. From 2015, the better compensation and the rehabilitation and resettlement benefits of the 2013 Act also apply to acquisitions under the Coal Bearing Areas Act. A farmer whose land is taken for a coal mine today is therefore entitled to the modern standards of compensation and resettlement.

Labour Welfare and Safety in the Mining Sector

Mining is one of the most dangerous occupations in the world: miners work underground, in darkness, amid the risk of roof falls, floods, fires, explosions of gas and dust, and lung diseases. The law of mine safety is written in the language of hard experience.

The Mines Act, 1952

For seventy-three years this was the central law. It:

• provided for a Chief Inspector and Inspectors of Mines;
• placed duties on the owner, the agent and the manager of every mine;
• limited daily and weekly working hours and required rest intervals and leave with wages;
• required facilities such as ventilation, drinking water, first aid and creches;
• restricted the employment of women below ground;
• required notice of every accident.

Under Section 57 of this Act, the Coal Mines Regulations, 2017 lay down detailed technical rules for coal mines, covering ventilation, gas testing, support of roofs, use of explosives, and precautions against fire and flooding.

The Occupational Safety, Health and Working Conditions Code, 2020

• Repeals thirteen labour laws, including the Mines Act, 1952.
• Brought into force, with the other three labour codes, on 21 November 2025.
• Mine safety is now governed by the Code and the rules and regulations made under it; the DGMS continues to enforce it.
• Women: the old Mines Act restricted employment of women below ground. The Code keeps a power to regulate the employment of women in dangerous operations, but its approach is to protect women through safeguards rather than simply to exclude them.

Welfare of coal workers

• Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948: created a provident fund for coal workers, managed by the Coal Mines Provident Fund Organisation through a board with representatives of the Government, employers and workers.
• Coal Mines Pension Scheme, 1998: made under this Act; came into force on 31 March 1998 and replaced an older family pension scheme.
• The Code on Social Security, 2020, also in force from November 2025, repeals nine older laws, but the Coal Mines Provident Fund Act is not among them. It continues as a separate law for coal workers.
• The old Coal Mines Labour Welfare Fund Act, 1947 was repealed long ago, in 1986.

Nuclear Energy

▶ Watch this part of the lecture (2:24:22)

Nuclear power plants produce electricity by splitting atoms of uranium. They produce very little carbon dioxide and can run day and night. But they raise three serious concerns:

1. Safety: an accident can release radiation over a large area.
2. Waste: spent fuel stays dangerous for a very long time.
3. Security: nuclear materials can be misused for weapons.

Nuclear energy has therefore always been controlled very tightly by the State. Under Entry 6 of the Union List, it is entirely a Union subject.

The Atomic Energy Act, 1962

For more than sixty years this was the main law.

• Section 3: wide powers to the Central Government to produce, develop and use atomic energy. It could declare information as restricted and declare prohibited areas, control radioactive substances, dispose of radioactive waste safely, and provide for the production and supply of electricity from atomic energy.
• Section 14: the Government could prohibit, except under its licence, the acquisition, production, possession, use, export or import of prescribed substances and equipment.
• Nuclear power remained in the hands of the Central Government and its companies, such as the Nuclear Power Corporation of India.

The Atomic Energy Regulatory Board

Safety was supervised by the Atomic Energy Regulatory Board, constituted on 15 November 1983. The Board was created by an executive order under a general delegation clause of the Act, Section 27, and not by a dedicated statutory provision. Critics said that a regulator created by an executive order is not independent enough.

Nuclear Energy: Civil Liability and the SHANTI Act

The Civil Liability for Nuclear Damage Act, 2010

This Act answered the question: who pays if a nuclear accident harms thousands of people?

• The operator of the plant was liable without proof of fault, up to 1,500 crore rupees for large reactors.
• Beyond that, the Central Government would provide further compensation, up to an overall limit.

Section 17(b) of the 2010 Act	International practice
The operator has a right of recourse against the supplier of equipment if the accident resulted from patent or latent defects in the equipment or from sub-standard services	All liability is channelled to the operator alone

Because of this clause, foreign suppliers of reactors were reluctant to enter India.

The SHANTI Act, 2025

In December 2025, Parliament passed the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act, 2025 (SHANTI). It repeals both the Atomic Energy Act and the Civil Liability for Nuclear Damage Act and replaces them with one consolidated law. Its main aims are:

• to allow private Indian companies to build and operate nuclear power plants under licence;
• to give the Atomic Energy Regulatory Board a statutory basis; and
• to revise the liability framework, including the position of suppliers.

The rules under the new law were still being finalised in 2026.

The Nuclear Energy Mission

• Announced in the Union Budget of February 2025, with an outlay of 20,000 crore rupees for research on small modular reactors (smaller nuclear reactors that can be built in factories).
• Targets: at least five indigenously designed small modular reactors operating by 2033, and 100 GW of nuclear capacity by 2047.
• India's nuclear capacity in January 2025: about 8,180 MW.

Nuclear power is thus expected to play a much bigger role in the clean energy transition. But the fuels of the past have created the crisis of the present: climate change.

Why the World Is Moving to Clean Energy

▶ Watch this part of the lecture (2:29:03)

Unit Five: Renewable Energy, Climate Change and Protection of the Environment. After the fuels that built the modern world (coal, oil, gas and uranium), this unit turns to the energy of the future and the environmental crisis that is pushing the world towards it.

If coal is cheap and plentiful, why is the world moving away from it? Four reasons:

1. Climate change. Burning coal, oil or gas releases carbon dioxide, a greenhouse gas that traps heat like the glass roof of a greenhouse, causing heatwaves, floods, droughts, melting glaciers and rising seas. The energy sector is the largest source of these gases, so climate change cannot be solved without changing how energy is produced.
2. Pollution. Coal plants release smoke, ash and harmful gases that damage the lungs of nearby residents; cooking on firewood fills homes with smoke. Clean energy is also a public health question.
3. Energy security. India imports most of its crude oil. Sunlight and wind cannot be blockaded by any foreign power, so every unit of solar power produced at home makes the country more secure.
4. Cost. After competitive auctions and large-scale manufacturing, the price of solar power fell sharply; it is now among the cheapest sources of new electricity.

Hard problems, legal as well as technical

• Renewable energy is variable (no sun at night, wind not constant), so the grid needs storage and backup.
• Solar parks need large areas of land.
• Transmission lines must cross forests and bird habitats.
• Discoms tied to long contracts with coal plants may be reluctant to buy more renewable power.
• Workers in coal regions may lose their livelihoods.

Development of Renewable Energy in India

India began thinking seriously about new energy sources after the oil shocks of the 1970s, when oil prices rose suddenly and sharply.

Date	Development
March 1981	Commission for Additional Sources of Energy set up in the Department of Science and Technology
September 1982	Separate Department of Non-Conventional Energy Sources created
1992	Became a full Ministry of Non-Conventional Energy Sources
October 2006	Renamed the Ministry of New and Renewable Energy (MNRE)

Two public companies support the MNRE:

• Indian Renewable Energy Development Agency (1987): a financial institution lending for renewable projects.
• Solar Energy Corporation of India (2011): runs large solar and wind auctions and signs power purchase agreements with developers.

Legal foundation in the Electricity Act, 2003

• Section 3: national policies must consider renewable sources.
• Section 61(h): tariff regulations must promote co-generation and renewable energy.
• Section 86(1)(e): every State Commission must promote renewable energy by providing for grid connection and sale of such electricity, and can fix a percentage of total consumption that each discom must buy from renewable sources.

The National Action Plan on Climate Change

Before the world agreed on the Paris Agreement, India prepared its own climate strategy. The National Action Plan on Climate Change (NAPCC) was released by the Prime Minister on 30 June 2008.

Approach

The plan did not treat growth and environment as enemies: high economic growth is essential to raise living standards and reduce people's vulnerability to climate change, so it sought measures that promote development while also benefiting the climate. Its principles include protecting the poor through inclusive development, efficient demand-side management, faster use of clean technologies, and new market and regulatory mechanisms.

The eight national missions

1. National Solar Mission
2. National Mission for Enhanced Energy Efficiency
3. National Mission on Sustainable Habitat
4. National Water Mission
5. National Mission for Sustaining the Himalayan Ecosystem
6. National Mission for a Green India
7. National Mission for Sustainable Agriculture
8. National Mission on Strategic Knowledge for Climate Change

Two are directly energy missions: the Solar Mission promotes solar power, and the Mission for Enhanced Energy Efficiency works through the Energy Conservation Act. Its best-known scheme, Perform, Achieve and Trade, sets energy-saving targets for large industries. The States have also prepared State action plans on climate change.

Limitation

The NAPCC is a policy document, not a statute. It creates no legal rights and imposes no penalties by itself. Its missions become legally effective only when carried out through laws such as the Electricity Act and the Energy Conservation Act, or through schemes and regulations made under them.

The Jawaharlal Nehru National Solar Mission

The first and most famous mission under the plan, the Jawaharlal Nehru National Solar Mission (JNNSM), was launched in January 2010. Since India receives strong sunlight on most days of the year, it aimed to make India a global leader in solar energy.

Point	Original mission document	Revision by the Union Cabinet, June 2015
Target	20,000 MW of grid-connected solar power by 2022	Raised fivefold to one lakh MW (100 GW) by 2022
Structure	Three phases: up to March 2013; 2013 to 2017; 2017 to 2022. Targets to be reviewed at the end of each phase	40 GW rooftop solar and 60 GW large and medium grid-connected projects

Bundling

In the first phase, when solar power was still costly, the mission used bundling:

1. NTPC Vidyut Vyapar Nigam, the trading company of NTPC, bought solar power from developers under long power purchase agreements.
2. It bundled this costly solar power with cheaper unallocated power from NTPC coal stations.
3. It sold the bundle to State discoms at a reasonable average price, and the discoms could count the solar part towards their renewable purchase obligation.

Under the June 2015 revision, the Solar Energy Corporation of India became the main agency for developing projects with viability gap funding.

The WTO dispute on domestic content

India now supports domestic manufacturing through other tools, such as production-linked incentives for manufacturers and an approved list of models and manufacturers for projects.

Legal Tools for Promoting Renewable Energy

▶ Watch this part of the lecture (2:39:07)

The renewable purchase obligation

Under Section 86(1)(e) of the Electricity Act, each State Commission fixes the percentage of electricity that discoms and certain other consumers must buy from renewable sources. Its validity was tested in the Supreme Court.

The renewable consumption obligation

The obligation has since moved to a new legal home.

Point	Renewable purchase obligation	Renewable consumption obligation
Source	Section 86(1)(e), Electricity Act; fixed by each State Commission	Ministry of Power notification of 20 October 2023 under the amended Energy Conservation Act
Who is bound	Discoms and certain other consumers	Discoms and designated consumers
Obligation	A percentage of electricity bought from renewable sources	A share of consumption from non-fossil sources, rising from about 30 per cent (2024-25) to about 43 per cent (2029-30)
Default	Surcharge for shortfall (Rajasthan regulations)	Penalties under the Energy Conservation Act

Policies for particular technologies

Policy	Date	Main feature
Large hydro as renewable energy	March 2019 (Cabinet)	Hydro projects above 25 MW declared renewable, with a separate hydro purchase obligation
National Wind-Solar Hybrid Policy	May 2018	Plants combining wind and solar on the same land
National Offshore Wind Energy Policy	Notified October 2015	Relies on Article 297, as the sea bed of the exclusive economic zone belongs to the Union
National Green Hydrogen Mission	Approved 4 January 2023	Outlay about 19,744 crore rupees; at least five million tonnes of green hydrogen a year by 2030

Farmers and households

• Pradhan Mantri KUSUM scheme (approved February 2019): helps farmers set up small solar plants and solar pumps.
• Pradhan Mantri Surya Ghar Muft Bijli Yojana (launched February 2024; outlay about 75,000 crore rupees): to help one crore households install rooftop solar and get up to 300 units of free electricity every month.
• Under an order of January 2019, solar panels in many projects must come from an approved list of models and manufacturers, supporting domestic manufacturing.

Results

• June 2025: non-fossil sources crossed half of India's installed electricity capacity, five years ahead of the target in the national climate commitment.
• 31 March 2026: non-fossil capacity about 283 GW, including solar about 150 GW and wind about 56 GW.
• India is now third in the world in renewable energy capacity.
• National target (announced at Glasgow, 2021): 500 GW of non-fossil capacity by 2030.

The Draft National Renewable Energy Act, 2015

India's renewable energy law is scattered across the Electricity Act, the Energy Conservation Act and policies and schemes that can change with every government. Investors prefer stable law, so in July 2015 the MNRE released a draft National Renewable Energy Act for public comments. It proposed:

• a duty on the Government to frame a National Renewable Energy Policy;
• a National Renewable Energy Advisory Group to advise on policy, and a National Renewable Energy Committee to coordinate ministries;
• a national renewable energy corporation to support project development;
• a National Renewable Energy Fund at the Centre and Green Funds in the States, for research, resource assessment, low-cost finance, skills and manufacturing;
• dedicated renewable energy investment zones; and
• a stronger system, with incentives, penalties and legal action, to ensure that renewable purchase obligations are actually met.

The draft was never enacted. India still has no single renewable energy statute; renewable energy remains governed by the Electricity Act, the Energy Conservation Act and many policies and schemes.

Climate Change and Energy Law: International Treaties

▶ Watch this part of the lecture (2:46:31)

Instrument	Adopted	In force	Key features
United Nations Framework Convention on Climate Change	May 1992; opened for signature at the Earth Summit, Rio, June 1992	March 1994	Central principle in Article 3, paragraph 1: common but differentiated responsibilities and respective capabilities
Kyoto Protocol	11 December 1997	16 February 2005	Binding emission targets only for developed countries; Clean Development Mechanism
Paris Agreement	12 December 2015	4 November 2016 (India ratified on 2 October 2016, Mahatma Gandhi's birthday)	Obligations on every country (key articles below)

Under the Clean Development Mechanism, projects that reduced emissions in developing countries like India could earn credits that developed countries could use.

Key articles of the Paris Agreement

• Article 2: hold the rise in global average temperature well below 2 degrees Celsius above pre-industrial levels, and pursue efforts to limit it to 1.5 degrees.
• Article 4: every country must prepare nationally determined contributions (NDCs) and update them every five years, each more ambitious than the last.
• Article 6: countries may cooperate, including through carbon markets.

India's commitments

Commitment	Content
Updated NDC, August 2022 (for 2030)	Cut emission intensity of the economy by 45 per cent from the 2005 level; about 50 per cent of installed electricity capacity from non-fossil sources (already reached)
Glasgow, 2021	Net zero emissions by 2070
NDC for 2035 (approved by the Union Cabinet, March 2026)	Emission intensity 47 per cent below the 2005 level; non-fossil share of installed capacity 60 per cent

Two conference decisions

• Glasgow (2021): the draft decision called for the phase-out of unabated coal power; at India's insistence the final text spoke of a phase-down. India argued that developing countries still need coal for development and for fighting poverty.
• Dubai, 28th Conference of the Parties (December 2023): in the first global stocktake, countries agreed to contribute to tripling renewable energy capacity and doubling the rate of energy efficiency improvement by 2030, and to transition away from fossil fuels in energy systems.

Recent developments

The United States has twice withdrawn from the Paris Agreement; its second withdrawal, ordered in January 2025, took effect in January 2026.

The International Solar Alliance

Launched by India and France on 30 November 2015 during the Paris conference; its framework agreement came into force on 6 December 2017; headquarters in Gurugram, Haryana. It helps countries rich in sunlight to cooperate in solar energy.

Climate Change in Indian Courts

▶ Watch this part of the lecture (2:51:02)

The Energy Transition and Its Legal Challenges

Side	What the transition requires
Legal	Stable contracts (investors will not build solar parks if tariffs can be reopened later); land and transmission corridors (questions of acquisition and the rights of local people); storage and flexible grids (the rules now allow consumers to own energy storage systems); critical minerals like lithium (the mining law was amended in 2023); carbon markets (the Energy Conservation Act was amended in 2022)
Economic	Discoms, the buyers of clean power, must stay financially healthy; transition costs must not make electricity unaffordable for the poor
Social	A just transition for coal-dependent workers and communities
Environmental	Even clean energy has impacts, as the Great Indian Bustard case shows; old solar panels and batteries will become waste that must be managed safely

Just transition

Lakhs of workers and whole districts in coal regions like Jharkhand, Chhattisgarh and Odisha depend on coal mining for their livelihood. A just transition means these workers and communities are not left behind, for example through retraining, new industries and social security. Some developing countries have announced Just Energy Transition Partnerships with rich countries to finance their move away from coal: South Africa first, at Glasgow in 2021, followed by Indonesia and Vietnam in 2022.

Renewable Energy, Climate Change and Energy Security

• Renewable energy reduces greenhouse gas emissions, so it fights climate change.
• It is produced at home from sunlight and wind, so it reduces dependence on imported oil and gas and strengthens energy security.
• Small solar systems can reach remote villages, advancing universal access under SDG 7.
• But it is variable, so reliability needs storage, flexible generation and strong grids.

Quick revision

• Energy Law runs from why energy needs law all the way to the clean energy transition.
• In every problem, first identify the energy source, the stage of the chain and the regulator involved.
• Always name the section and support it with the leading case, such as Energy Watchdog for power purchase agreements or Hindustan Zinc for renewable obligations.
• Where two concepts look similar, such as unauthorised use and theft, or a regulation and an order, write their differences clearly, with an example.
• These topics serve university examinations, judiciary examinations, UGC NET and CLAT PG, and regulatory and energy practice.