{"id":1418,"date":"2024-01-10T11:29:12","date_gmt":"2024-01-10T11:29:12","guid":{"rendered":"http:\/\/sh007.global.temp.domains\/~studiobh\/veritaslegal\/?p=1418"},"modified":"2024-01-10T11:29:13","modified_gmt":"2024-01-10T11:29:13","slug":"projects-and-infrastructure-october-december-2023","status":"publish","type":"post","link":"https:\/\/veritaslegal.in\/staging\/projects-and-infrastructure-october-december-2023\/","title":{"rendered":"Projects and Infrastructure | October &#8211; December 2023"},"content":{"rendered":"\n<p class=\"has-text-color has-medium-font-size wp-block-paragraph\" style=\"color:#9d0000\"><strong>Regulatory Updates<\/strong><\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-87e909d7f120276e0b0e51182e2725fd wp-block-paragraph\" style=\"color:#9d0000\"><strong>CERC removes difficulties in implementation of GNA Regulations<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">By its order dated 1 October 2023, Central Electricity Regulatory Authority (\u201c<strong>CERC<\/strong>\u201d) has issued clarifications on a few issues for removal of difficulties in implementation of CERC (Connectivity and General Network Access to the inter-State Transmission System) Regulations, 2022 (\u201c<strong>GNA Regulations<\/strong>\u201d). The clarifications inter alia, pertain to payment of transmission charges for temporary general network access under advance and exigency application category, treatment of bank guarantees, and extension of timeline for application for grant of general network access by state transmission utilities.<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-b7e1089ca557543833b40b05f9bc5b24 wp-block-paragraph\" style=\"color:#9d0000\"><strong>Clarifications in relation to scheme for one-time settlement of contractual disputes<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The National Highways Authority of India, on 3 October 2023, issued a policy circular to effectively implement the clarifications issued by the Department of Expenditure, Ministry of Finance (&#8220;<strong>MoF<\/strong>&#8220;) regarding MOF&#8217;s one-time settlement scheme &#8216;Vivad se Vishwas II (Contractual Disputes)&#8217; for settlement of pending disputes (&#8220;<strong>Scheme<\/strong>&#8220;).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Previously, as per the Scheme, the settlement amount that would be offered to contractors for arbitral awards passed on or before 31 January 2023, was 65% of the net amount awarded\/ upheld by the court or 65% of the claim amount lodged by the contactor under the Scheme, whichever is lower. However, now the same has been corrected to 65% of the net amount awarded or 65% of the claim amount lodged by the contactor under the Scheme, whichever is lower. Further, the MoF has also clarified that for such arbitral awards or court orders passed on or before 30 April 2023, the stipulated interest will not only be paid on the pending settlement amount (85% or 65% of the award, as applicable) but also on the interest accumulated till the date of award (to the extent of 85% or 65%, as applicable).<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-71fa86ed80e61bbbad5d23f985308b27 wp-block-paragraph\" style=\"color:#9d0000\"><strong>Revision in fee collected by government authorities on national highways, bridge, tunnel or bypass<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ministry Of Road Transport and Highways <em>vide<\/em> a notification dated 6 October 2023 amended the National Highways Fee (Determination of Rates and Collection) Rules, 2008, which regulates, <em>inter alia<\/em>, the fee collected by government authorities after expiry of concession period. Prior to the amendment, the fee collected by the government authorities post concession period was to be reduced to 40% of the fee collected during the concession period. With the said amendment getting effective, the fee collected by the government authorities post concession period shall remain same as the fee collected on the date of transfer of such section of the national highway, bridge, tunnel or bypass.<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-3f509bb6b388db8500b53331de95b58d wp-block-paragraph\" style=\"color:#9d0000\"><strong>Penalties for violation of DCR norms under Solar PV power projects<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Ministry of New and Renewable Energy (&#8220;<strong>MNRE<\/strong>&#8220;), on 16 October 2023, taking note of the apprehensions raised in respect of the supply of solar PV modules under MNRE&#8217;s schemes\/ programs which are not fully compliant with the domestic content requirements (&#8220;<strong>DCR<\/strong>&#8220;) prescribed by MNRE in 2018, once again reiterated that&nbsp; such DCR provisions as mandated shall be strictly complied with and any violation of such provisions shall invite actions set out in the 2018 memorandum. These include filing of criminal cases under section 420 of the Indian Penal Code 1860 and related sections, blacklisting of a developer for period of 10 years etc.<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-49309e6fd710382b0765f6a5e62ce572 wp-block-paragraph\" style=\"color:#9d0000\"><strong>Amendments to the CERC (Sharing of inter-State Transmission Charges and Losses) Regulations, 2023<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Central Electricity Regulatory Commission has <em>vide <\/em>notifications dated 20 October 2023 and 26 October 2023 amended the Central Electricity Regulatory Commission (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2023. Broadly, these amendments introduce the following principles:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Deemed COD<\/strong>:The concept of &#8216;Deemed Commercial Operation Date (&#8220;<strong>COD<\/strong>&#8220;)&#8217; has been introduced, which represents the commercial operation date for a transmission system or its element.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Treatment of yearly transmission charges<\/strong>: New rules have been introduced for the treatment of yearly transmission charges for inter-state transmission systems or elements approved or declared as &#8216;Deemed COD&#8217;.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-9387fe10bb999a9fcb059fb0934bf3be wp-block-paragraph\" style=\"color:#9d0000\"><strong>Extensions of directions to Imported Coal based plants under Section 11 of the Electricity Act, 2003<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Ministry of Power on 23 October 2023 extended the validity of directions issued to Imported Coal Based Plants under section 11 of the Electricity Act, 2003 up to 30 June 2024, mandating them to generate power to their full capacity and prescribing procedure to determine rates at which power is supplied. The extension has been issued in light of the surge in electricity demand, inadequate supply of domestic coal and reduced ability of hydrogeneration.<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-619c7bc7a9060c78c58f29f31542ca7b wp-block-paragraph\" style=\"color:#9d0000\"><strong>Directions to Thermal Generating Stations for blending of imported coal<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Ministry of Power has issued an advisory dated 25 October 2023 revising the advisory dated 1 September 2023 regarding blending of imported coal. The new advisory directs that blending of imported coal @ 6% (by weight) minimum may be continued till March 2024 in order to ensure uninterrupted power supply across the country. Thermal generating companies may also review their stock and opt for blending as per requirements if the shortfall in domestic coal supply exceeds 6%.<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-7070294dd92b38b25cd1faf0ef0ff950 wp-block-paragraph\" style=\"color:#9d0000\"><strong>Centre declares imposition of charges by states on generation of electricity as unconstitutional<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Ministry of Power has issued a circular dated 25 October 2023 noting that some State Governments have imposed additional charges on generation of electricity from various sources under the guise of development fee\/ charges\/ fund.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Citing constitutional provisions including Articles 286, 287, 288 and Schedule VII, the circular specifies that levying of taxes\/ duties by any State on generation or inter-State supply of electricity under the guise of additional charges\/ fee on generation of electricity from any source, i.e., thermal, hydro, wind, solar, nuclear is illegal and unconstitutional.<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-28fb2bf19ea858b00c85446825523918 wp-block-paragraph\" style=\"color:#9d0000\"><strong>Procedure for Implementation of Uniform Renewable Energy Tariff notified<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Ministry of Power has, on 25 October 2023, issued to Grid India, the approved procedure for implementation of a uniform tariff for renewable energy (&#8220;<strong>URET<\/strong>&#8220;). The procedure establishes a framework for the implementation of a URET, including the categorization of central pools, eligibility criteria for entities, data submission, tariff calculation, and compliance measures to promote renewable energy adoption. The key elements are below:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Implementing agency<\/strong>: Grid Controller of India Limited (\u201c<strong>Grid India<\/strong>\u201d), as the implementing agency, shall calculate and implement the URET, on a monthly basis for each category of central pool at which an intermediary procurer shall sell power to the end procurers.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Scope<\/strong><strong> and Duration<\/strong>: The procedure applies to central pools for different renewable energy sources, such as solar power, wind power, hydro power etc. as specified by the Central Government. Each central pool is established for 5 years, with capacity added during this period. After 5 years, no new capacity can be added, but existing capacity remains in the pool until expiration of the respective agreements.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Eligibility<\/strong><strong> criteria and registration:<\/strong> Eligibility criteria and registration requirements for the URET Central Pool participants including producers\/generators, end producers and intermediary procurers has been detailed.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Legal<\/strong><strong> Obligations:<\/strong> Contractual obligations and change in law provisions between parties are governed by respective agreements, separate from URET.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Indemnity<\/strong><strong>:<\/strong> Grid India is to be indemnified against liabilities arising from actions taken under the procedures.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Method<\/strong><strong> for Calculation:<\/strong> Tariff calculation is based on scheduled energy to end procurer from the central pool.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-0b395ad2e9f4ca60a2c59892c7ccf6e2 wp-block-paragraph\" style=\"color:#9d0000\"><strong>Battery Waste Management (Amendment) Rules, 2023<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On 25 October 2023, the Ministry of Environment, Forest and Climate Change notified the Battery Waste Management (Amendment) Rules, 2023 to amend the Battery Waste Management Rules, 2022. The key amendments include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Definition of battery<\/strong>: Earlier, the definition of &#8216;Battery&#8217; included new or refurbished cell\/batter and its components. Battery components have now been excluded.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Responsibility of Producers<\/strong>: The Extended Producer Responsibility (\u201c<strong>EPR<\/strong>\u201d) of the producers is expanded to include batteries that the producers put to self-use, in addition to batteries introduced by them in the market. Further, the producers are required to file annual returns in respect of pre-consumer waste battery generated in the preceding financial year, and an annual return regarding batteries manufactured, assembled, or imported in the preceding financial year.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Registration<\/strong>: Every producer is required to obtain registration from the Central Pollution Control Board (\u201c<strong>CPCB<\/strong>\u201d), which shall now be valid until it is cancelled or withdrawn.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Recyclers and refurbishers<\/strong>: The EPR certificates for recyclers and refurbishers shall be generated based on the weight of waste battery processed or refurbished.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Trading of EPR certificates<\/strong>: One or more electronic trading platforms for sale and purchase of EPR certificates may be established through accredited agencies, which will be regulated by CPCB. CPCB shall fix the highest or lowest price for EPR certificates every 6 months, or as required, keeping in view the cost for collection and management of waste battery and environmental compensation regime in force.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-44a2a16a04c1caf8a2e3a5362ecb3fb0 wp-block-paragraph\" style=\"color:#9d0000\"><strong>Advisory to stated owned GENCOs to participate in CIRP for taking over of Stressed Thermal Power Assets<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Ministry of Power issued an advisory dated 1 November 2023 encouraging all state owned generation companies (\u201c<strong>GENCOs<\/strong>\u201d) to participate in the Corporate Insolvency Resolution Process (\u201c<strong>CIRP<\/strong>\u201d) for taking over stressed thermal power assets.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The major challenges faced by the stressed assets include inadequate capital investment, shortage of raw material and prolonged recovery of dues. Such participation of GENCOs will lead to resolution and revival of significant public investment and national resources in stressed power assets in a cost and time effective manner, avoid the gestation period of new projects, and enhance the nation\u2019s power-generation capacity. The said takeover via CIRP route will provide a \u2018clean slate\u2019 to the acquirer.<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-49e3735633bd9cfec74879f0f725b8b3 wp-block-paragraph\" style=\"color:#9d0000\"><strong>Reappraisal of environmental clearances by State Expert Appraisal Committee \/ State Environment Impact Assessment Authority<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Pursuant to the order of the National Green Tribunal passed in Jayant Kumar vs. Ministry of Environment, Forest &amp; Climate Change (\u201c<strong>Ministry<\/strong>\u201d) &amp; Ors., the Ministry issued an office memorandum, dated 28 April 2023, directing all valid environmental clearances (\u201c<strong>ECs<\/strong>\u201d), issued by the District Environment Impact Assessment Authority&nbsp;(\u201c<strong>DEIAA<\/strong>\u201d),&nbsp;to be reappraised through the State Expert Appraisal Committee \/ State Environment Impact Assessment Authority (&#8220;<strong>SEIAA<\/strong>&#8220;).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Ministry has now issued a clarification <em>vide<\/em> its office memorandum dated 3 November 2023 stating that the ECs granted by the DEIAA which are valid as on date shall continue to be valid for 1 year from the date of issue of its earlier office memorandum dated 28 April 2023, unless the validity of the EC granted lapses prior to 28 April 2024 or until SEIAA has invalidated an EC upon reappraisal.<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-2a3a364c1ef13bbbc27bc2f005c9158c wp-block-paragraph\" style=\"color:#9d0000\"><strong>Clarification on timeline for transfer of environmental clearances after transfer\/ acquisition\/ demerger<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Ministry of Environment, Forest &amp; Climate Change (\u201c<strong>Ministry<\/strong>\u201d) has, <em>vide <\/em>office memorandum dated 3 November 2023 (\u201c<strong>Office Memorandum<\/strong>\u201d), clarified that subsequent to the transfer\/ acquisition\/ demerger\/ change in name etc., of a project\/ unit, having a valid environmental clearance (&#8220;<strong>EC<\/strong>&#8220;), from one legal entity to another, all the accumulated environmental obligations, shall be deemed to be transferred to the new entity from the date of such transfer\/ acquisition\/ demerger\/ change in name etc. Accordingly, the transferor\/ transferee shall apply for transfer of EC on PARIVESH, within 12 months of such transfer\/acquisition\/demerger\/ change in name etc. of the company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, in case of delay in filing of the application beyond such period of 12 months, up to 24 months from the date of transfer\/ acquisition\/ demerger\/ change in name etc, the delay shall be condoned at the level of the minister in charge of Ministry or chairman of State Level Expert Appraisal Committee, as the case may be. Delay in filing beyond such period of 24 months shall be considered as non-compliance of the condition of grant of the EC and action shall be initiated on the project proponent as per the existing rules.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Any project proponent who, as of the date of the Office Memorandum, has not applied for transfer of EC, in respect of a change in name\/ownership of the company, even after 1 year from such change, is required to so apply within a period of 6 months from the date of the Office Memorandum and the same shall not be considered as a non-compliance of the EC.<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-a75f9897f9d163355d614b07f32af3f2 wp-block-paragraph\" style=\"color:#9d0000\"><strong>Draft safety and procedural requirements for type approval of hydrogen power vehicles<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Government of India has hosted a draft for Safety and Procedural Requirements for Type Approval of Hydrogen Powered Vehicles (Liquid \/ Compressed Gaseous Hydrogen) for public comments on 6 November 2023. These standards are formulated by Automotive Industry Standards Committee to minimize human harm that may occur as a result of fire, burst or explosion related to the vehicle fuel system and \/ or from electric shock caused by the vehicle\u2019s high voltage system. Since on-road vehicle experience with liquefied hydrogen system is limited and safety requirements have not been comprehensively evaluated for feasibility and known failure conditions, the standard also presents optional requirements and test procedures for vehicles with liquefied hydrogen storage systems.<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-717ba085e4a3e9cf0ef0b237a1cdd018 wp-block-paragraph\" style=\"color:#9d0000\"><strong>Engagement of personnel by contractors in EPC road projects<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Clause 4.4 of the Standard Engineering Procurement and Construction (\u201c<strong>EPC<\/strong>\u201d) Agreement<a> <\/a>for national highways (road projects) puts the onus on the contactor to ensure that the personnel engaged by them or their sub-contractors, in the performance of their obligations under the agreement, shall at all times be appropriately and adequately qualified, skilled and experienced in their respective functions, in accordance with good industry practice.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In furtherance to the above, the National Highways Authority of India, issued a policy circular, dated 10 November 2023, providing the qualifications of the respective personnels considering good industry practices.<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-15db7d156787c0522956e44b0994eaf2 wp-block-paragraph\" style=\"color:#9d0000\"><strong>New conditions for assignment of forest land on lease to government and private entities<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Central Government on 29 November, notified certain terms and conditions, under the Van (Sanrakshan Evam Samvardhan) Adhiniyam, 1980, to be abided by the State Government or Union territory Administration while considering the proposals for assignment of forest land on lease to government or private entities. In case of existing mining leases having forest land in part or in full, no mining shall be allowed until the approval of the Central Government is obtained for the entire forest land falling in such mining lease. The user agency seeking assignment of forest land on lease for mining, shall also submit the approved mining plan and a mine closure plan, and for activities other than mining, a detailed project report or plan for activities shall be submitted along with the proposal. The validity of approval shall be valid for a period co-terminus with the period of mining lease granted or for the period specified by the Central Government. The State Government or Union territory Administration and the user agency shall monitor at least once a year, the compliance of conditions imposed for allowing non-forestry use of forest land and upload a copy of such monitoring report on PARIVESH portal.<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-4bb0f1bc733de613f3cd209745a0f12a wp-block-paragraph\" style=\"color:#9d0000\"><strong>New National Repowering &amp; Life Extension Policy for Wind Power Projects, 2023<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Ministry of New and Renewable Energy (\u201c<strong>MNRE<\/strong>\u201d) has issued the new National Repowering and Life Extension Policy for Wind Power Projects, 2023, dated 7 December 2023. This policy <em>inter alia<\/em>, allows the replacement of aging turbines with more efficient ones before reaching the end of their design life, involving modifications to components like gearbox, blades, generator, and controller and aims to enhance energy yield by using modern technologies. A repowering\/refurbishment project should satisfy the specified criteria and the annual enhanced generation should be at least 1.5 times the old project. Repowering can be standalone or aggregated projects, extending power purchase agreements by up to 2 years. Developers can sell surplus power without mandatory fixed rates and without any right \/ obligation of the distribution companies over such surplus power, with a 24-month operational timeframe post-consent. Additional transmission augmentation will be provided to the developer for such projects.<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-4fd800fe36e2ff1f0e8aea8c70fb1ae8 wp-block-paragraph\" style=\"color:#9d0000\"><strong>CERC (Terms and Conditions of Tariff) (Third Amendment) Regulations, 2023<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Central Electricity Regulatory Commission (\u201c<strong>CERC<\/strong>\u201d) on 15 December 2023 amended the Appendix II of Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2019 which regulates the calculation of transmission system availability factor for a month. Pursuant to the amendment, the transmission elements shall be deemed to be available if an outage is caused by shut down of a transmission line due to its shifting or modification by projects of NHAI, Railways or Border Road Organization. Member Secretary of Regional Power Committee (\u201c<strong>RPC<\/strong>\u201d) may set a reasonable availability period provided designated inter-state transmission system customers remain unaffected by such shutdown.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The outages due to acts of god or grid incidents\/disturbance not attributable to the transmission licensee which will be excluded from the total time of the element under period of consideration, shall now be declared by (a) Member Secretary, RPC, for maximum up to 1 month; (b) RPC, beyond 1 month and up to 3 months; and (c) CERC, beyond 3 months and for which the transmission licensee shall approach CERC along with reasons and mitigation steps.<\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-d8054ace14138929ad6ef87eba02d8b8 wp-block-paragraph\" style=\"color:#9d0000\"><strong>Offshore Wind Energy Lease Rules, 2023 notified<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On 19 December 2023, the Ministry of External Affairs notified the Offshore Wind Energy Lease Rules, 2023 (&#8220;<strong>Rules<\/strong>&#8220;) under the Territorial Waters, Continental Shelf, Exclusive Economic Zones, and Other Maritime Zones Act, 1976. Some of the key principles of the Rules are set out below:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Grant of lease<\/strong>: The Central Government shall have the power to grant such lease within the exclusive economic zone to any person for an offshore wind energy project or an offshore wind transmission project (either, a &#8220;<strong>Lessee<\/strong>&#8220;). Prior to the granting of such lease, clearances from the Ministry of Defence, Ministry of Home Affairs, Ministry of External Affairs, Ministry of Environment, Forest and Climate Change, Department of Space and Ministry of Ports, Shipping and Waterways shall be obtained. The area covered under the lease shall range from 25 to 500 square kilometres.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Exclusive rights of lessee<\/strong>: A Lessee will have the exclusive right to carry out activities related to offshore wind energy generation and transmission within the designated area, with a right to restrict boats, ferries, or ships within the designated area. However, activities such as fishing for livelihood and other activities for public benefit can be carried out, without interference to the wind farm.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Lease fee<\/strong>: The Lessee shall be required to pay a lease fee of INR 1 lakh per square kilometre or part thereof per year in advance, along with a security deposit.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Lease period<\/strong>: The lease will be valid for 3 years, for resource measurement and other related study or survey activities, extendable by 2 more years if valid reasons are provided. However, if establishment of the wind energy capacity has not started at the end of the 5 year period, the lease shall expire. For the construction and operation of the offshore wind energy project, the lease will be extended up to 35 years, with further extensions on a case-by-case basis.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-text-color has-link-color has-medium-font-size wp-elements-5814222edfcc808255f0c77807ff58a3 wp-block-paragraph\" style=\"color:#9d0000\"><strong>Case Summaries<\/strong><\/p>\n\n\n\n<p class=\"has-text-color has-link-color wp-elements-36e0a65a4efba04f542197b6c6f7e85a wp-block-paragraph\" style=\"color:#9d0000\"><strong>Supreme Court settles key principles for captive generation plants<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In the matter <em>Dakshin Gujarat Vij Company Limited vs. Gayatri Shakti Paper and Board Limited and another<\/em>, the Supreme Court of India interpreted various provisions of the Electricity Act, 2003 (\u201c<strong>Act<\/strong>\u201d) and Rule 3 of the Electricity Rules, 2005 (\u201c<strong>Rules<\/strong>\u201d) in relation to classification of captive generation plants (&#8220;<strong>CGPs<\/strong>&#8220;). The key findings of the judgment are as follows:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Import of the terms &#8216;set up&#8217;:<\/strong> The court upheld the rationale in <em>Kadodara Power Pvt Ltd and Ors v. Gujarat Electricity Regulatory Commission &amp; Anr<\/em> that &#8216;Set up&#8217; defined in section 2(8) of the Act has been made equal to <em>&#8220;construct, maintain or operate&#8221;<\/em> by use of these words in section 9. A CGP does not lose its captive status due to transfer of its ownership, provided that the transferee complies with the eligibility requirements under Rule 3.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>26% requirement to be met throughout the year: <\/strong>The court disagreed with the <em>Tamil Nadu Power Producers Association v. Tamil Nadu Electricity Regulatory Commission<\/em> and held that the minimum threshold of ownership, i.e. 26%, has to be met throughout the year and not at the end of financial year alone.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Clarity on proportionality requirement: <\/strong>While interpreting the second proviso to Rule 3(1)(a) where captive users are an \u2018association of persons\u2019, the Supreme Court elaborated on the unitary qualifying ratio in the proportionality principle. The court observed that the unitary qualifying ratio is the consumption requirement divided by the shareholding requirement, i.e. 51% divided by 26%. This means that the owner of every 1% shareholding of the CGP should have minimum consumption of 1.96% of the electricity generated by the CGP, with a variation of +10% being permissible. This does not take into account 100% of the electricity generated.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Company set up as SPV as an &#8216;association of persons&#8217;<\/strong>: The Court held that Rule 3(1)(b) does not undo or override the eligibility criteria specified under Rule 3(1)(a) read with second proviso. It held that special purpose vehicles (&#8220;<strong>SPVs<\/strong>&#8220;) which own, operate and maintain CGPs are an \u201cassociation of persons\u201d in terms of the second proviso to Rule 3(1)(a) of the Rules. Companies, body corporates and other persons, who are shareholders and captive users of a CGP set up by a SPV, are required to comply with Rule 3(1)(a) of the Rules read with the second proviso of the Rules.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">For more information contact:<\/p>\n\n\n\n<p class=\"has-text-color has-small-font-size wp-block-paragraph\" style=\"color:#9d0000\"><strong>Jhinook Roy<\/strong><br>Practice Head \u2013 Projects &amp; Infrastructure<br><a href=\"mailto:jhinook.roy@veritaslegal.in\">jhinook.roy@veritaslegal.in<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>DISCLAIMER<\/strong><br><em>VERSED by Veritas Legal intends to provide the readers with an overview of some of the noteworthy legal developments for education \/ information purposes only. This newsletter should not be construed or relied on as legal advice, or to create a lawyer-client relationship. Readers should reach out to us for any specific factual or legal questions or clarifications; and are encouraged to seek legal advice before acting on any information provided herein. The enclosed information is available in the public domain and shall not be construed as dissemination of any confidential information.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Regulatory Updates CERC removes difficulties in implementation of GNA Regulations By its order dated 1 October 2023, Central Electricity Regulatory Authority (\u201cCERC\u201d) has issued clarifications on a few issues for removal of difficulties in implementation of CERC (Connectivity and General Network Access to the inter-State Transmission System) Regulations, 2022 (\u201cGNA Regulations\u201d). The clarifications inter alia,&hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29],"tags":[],"class_list":["post-1418","post","type-post","status-publish","format-standard","hentry","category-newsletter","entry","no-media"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/posts\/1418","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/comments?post=1418"}],"version-history":[{"count":1,"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/posts\/1418\/revisions"}],"predecessor-version":[{"id":1419,"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/posts\/1418\/revisions\/1419"}],"wp:attachment":[{"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/media?parent=1418"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/categories?post=1418"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/tags?post=1418"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}