Areas of Service

CLEANTECH

OUR INDUSTRY EXPERTISE

Clean technology mainly includes recycling, renewable energy (wind power, solar power, biomass, hydropower, biofuels, etc.), green hydrogen and many other technologies (electric vehicles, smart lighting, storage etc.) that are now more energy efficient. The goal of Cleantech is to either reduce or optimize the use of natural resources, whilst simultaneously reducing the negative effect that technology has on the planet and its ecosystems.

The Government of India has been making conscious efforts to focus on green energy and sustainable development. In 1982, a Department of Non-Conventional Energy Sources (DNES) was created under the Ministry of Energy to look after renewable energy sources. Later, a separate ministry was established as Ministry of Non-Conventional Energy Sources (MNES) in 1992, renamed as Ministry of New and Renewable Energy (MNRE) in 2006 for non-conventional sources of energy. In 2019, India committed to finalising long-term strategies to lower carbon dioxide and other greenhouse gases under the Paris Agreement and more recently in 2021 during the COP26 Climate Change Conference in Glasgow, India has set itself a ‘net zero’ emissions goal by 2070.

In line with the above, Indian renewable energy sector has been fast developing and has received FDI inflow of US$ 11.20 billion between April 2000 to December 2021.¹ India’s installed renewable energy capacity has increased 286% in the last 7.5 years. India is particularly well placed to become a global leader in wind and solar generation, renewable batteries and green hydrogen. India ranked 3rd in renewable energy country attractive index in 2021² and has set an ambitious target to achieve a capacity of 500 GW through green generation by 2030.³ These and other low-carbon technologies could create a market worth up to $80 billion in India by 2030.⁴ As part of India’s economic recovery plan post-pandemic, the MNRE has urged state governments to provide incentives to manufacturers who utilise renewable energy in their factories.

The Cleantech practice is an area of practice in which Nishith Desai Associates (“NDA” or the “Firm”) has built a significant expertise.  At NDA we endeavor to combine our rich international experience and expertise in domestic laws/regulations with our research capabilities to devise innovative structures and provide strategic advice on undertaking business activities to cleantech companies in India. Where Indian companies have begun to explore foreign stock exchanges as a source of funds to develop this fast-growing industry. At the same time, Venture Capitals and Private Equity players have also started showing increase in interest in alternative energy companies, especially Solar and Wind energy companies. There is an increase in the Merger and acquisition, Joint Ventures or collaboration activities in recent times due to policies and support from the Government including 100% foreign direct investment under automatic route.

An illustrative list of the types of the businesses in the Cleantech sector are as follows:

• Environmentally friendly transport
• Energy generation
• Energy efficiency
• Wastewater treatment
• Waste management
• Packaging
• Chemicals

SCOPE OF SERVICES

Strategic advice on Industry Law issues: The Firm advises on legal, strategic and compliance issues related to the laws governing the cleantech industry. The Firm provides practical solutions, on the basis of the extensive domain knowledge of the industry.

Documentation: The Firm undertakes drafting and review of various agreements relevant to the industry.

Regulatory advice: The Firm provides advice with respect to regulatory issues which may arise due to licenses, permits and transactions undertaken by the cleantech companies in inviting investments and setting up businesses which may have implications under the applicable laws.

Litigation: The Firm has a robust Dispute Resolution Practice with members having skill and expertise to represent clients in different forums in the country.

REGULATORY AND LEGAL FRAMEWORK APPLICABLE TO THE INDUSTRY

India’s regulatory regime is witnessing a shift in favour of renewable energy with increasing number of policies, and regulations being legislated to govern the renewable energy sector. The following acts, regulations and policies play an important role.

The Electricity Act, 2003

• Regulates the generation, transmission, distribution, trading and use of electricity.
• Provides for measures for conducive development of electricity industry. Promoting competition and protecting interests if the consumers.
• The Act regulates the supply of electricity to all areas while ensuring rationalization of electricity tariff. 

The National Electricity Policy, 2005

• The policy lays down guidelines for accelerated development of power sector and providing supply of electricity to all areas.
• The policy also aims to protect the interests of consumers and other stakeholders keeping in view availability of energy resources, technology available to exploit these resources, economics of generation using different resources, and energy security issues.

The National Tariff Policy, 2016

• The policy seeks to provide access to affordable energy to consumers in the country.
• The policy seeks to regulate the tariff pertaining to inter-state transmission of electricity, procurement of power, subsidies, etc. and further lays down the role of the regulators to regulate pricing of power.

Electricity (Promotion of Generation of Electricity from Must-Run Power Plant) Rules, 2021

• The rules seek to provide a ‘Must-Run’ status to renewable energy plants such as wind, solar, wind-solar hybrid, hydropower plants. The rules provide that the power from these plants must not be curtailed.
• The rules require the procurer to compensate the renewable power producer at the rates specified in the power purchase agreement, in the event power is curtailed from such project for reasons other than technical constraints or grid security.

The National Rural Electrification Policy, 2006

• The goals of the policy include provision of electricity to all households by enabling quality and reliable power supply at reasonable rates.
• It encourages the local government bodies as well as state government bodies to setup committees and prepare rural electrification plans to meet objectives of the policy.

CONCLUSION

The renewable energy market is fast growing in India and has been getting the attention of not only the Indian Government but also various investors and private players, both foreign and domestic. The Government of India is also incentivizing this sector by proposing various incentives, policies and guidelines. If India's wind, solar, biomass, and hydro energy resources are channelized properly, this sector could bring significant change in the power generation for the country. Though there are government policies and guidelines, implementation of specific regulations and laws are bringing more clarity and growth to the sector with new players entering the industry.

REPRESENTATIVE CLIENTS

• Leading players: Actis, Acme Solar, Adani, Greenko, Renew Power, Sembcorp, Azure Power, Amp Solar, Tata Power, NTPC, Avaada Power, Hero Future Energies, Suzlon Energy.