NLSIU-CEERA

THREE-DAY CERTIFICATE COURSE

ON

“Energy Sector: Contractual, Financial & Regulatory Governance in India”

ORGANISED BY

CENTRE FOR ENVIRONMENTAL LAW, EDUCATION, RESEARCH AND

ADVOCACY [CEERA],

NATIONAL LAW SCHOOL OF INDIA UNIVERSITYBENGALURU

Date: November 11 to 13, 2019

Detailed Report

Day 1 – 11th

November 2019

Inaugural Ceremony The “Three Day Certificate Course on Energy Sector:

Contractual, Financial and Regulatory Governance in India”

organized by Centre for Environmental Law, Education,

Research and Advocacy [CEERA], National Law School of

India University at NLSIU Campus, Nagarbhavi, Bengaluru

from 11th to 13

th November began with an inaugural session

graced by the Chief Guest of the event Dr. Srinivas Ravindra,

CEO, Centre for Sustainable Development, Bengaluru joining

him were, Prof. MK Ramesh, Professor of Law, NLSIU, Prof.

(Dr.) Sairam Bhatt, Professor of law, NLSIU, Dr. Manjeri Subin

Sunderraj, Asst. Professor, NLSIU.

Prof. (Dr.) MK Ramesh emphasized on the uniqueness of this

course, which is not just limited to law but goes beyond it. It

includes the elements of contracts, business and has a lot to do with

economy. Sir emphasized that a discourse of this kind cannot really

be completed without understanding its implications on the

economy of the nation. It is a Herculean task to put together the

theoretical knowledge and practical aspects of such a broad topic

into a three days course.

Dr. Srinivas Ravindra stressed that in the last decade, the

world has been shifting from conventional to non-conventional

sources of energy. He explained about the current affairs at the

international sphere regarding the energy sector. US withdrew

itself from climate negotiation; China is emerging as a top

leader in renewable energy sector. Meanwhile, the PM of India

announced goal to achieve 175 giga watts of renewable energy

by 2020. Though it is a tall ambitious agenda, it can be achieved

with a boost in policies and financial support. He discussed

about domestic issues in India like credit worthiness, center- state disputes, taxation, grid integration,

etc. He ended his talk on the note that thrust is needed to handle these issues, after which the goals set

can be achieved.

Dr. Manjeri Subin Sunderraj appreciated the interest showed by

the participants in the energy sector by being a part of this course.

He commended the setting up of such an ideal platform and

wished the participants to have an insightful and knowledgeable

experience here.

Prof. (Dr.) Sairam Bhat thanked Dr. Srinivas Ravindra and

introduced him to the audience and assured that his session will

lighten up the spirits of everyone. He began explaining that energy

is a right and there’s rising demand for it in India. The three As in the energy sector need to be taken

care of; Availability, Accessibility and Affordability and emphasized each one’s impact on growth of

energy sector. He briefly addressed the constitutional dimension of this sector as well. These were the

kind of incentives which prompted the opening of an energy cell in CEERA. This course is set with

the intention of not only having a law perspective but looking at this sector through management

perspective. On this note, sir welcomed all the participants and wished them to have interactive and

inquisitive sessions.

Session 1 - Regulatory Challenges in Energy Sector; Clean

Energy vis-à-vis Sustainable Development

The Session was chaired by Dr. R Srinivas, CEO, Centre for Sustainable Development. The session

began with the introduction of the Energy sector as a subject of study which requires techno-legal

expertise. The speaker began the session on the note that the challenge that this sector poses is the

integration of a varied nature of subjects into the legal systems. Energy Sector was advocated as a

core component of sustainable development by means of the incorporation under the Sustainable

Development Goals (SDG 7). He touched upon the aspect of energy access and how we have a

Fundamental right under Article 21 to access energy by means of the ratio decidendi of Chameli

Singh v. State of Uttar Pradesh. He laid this as a foundation to establish that we are primarily

dependant on energy and there are different types of energy sources that we depend upon. With

respect to the power generation, our dependence continues to remain on coal, however with the

statistics in 2019 showing a reduced dependency, the potential for the growth of the renewable

energy sources is fairly high. He emphasised upon the core components that must follow the energy

regulation objectives which are-

Secure sufficient and continuous supply of energy

Affordable access to energy and universal access

Mix of fuel and non-fuel sources

He posed a very practical question of whether it is possible to be totally independent of coal as it is a

primary contributor to the GDP of the country. The need of the hour is to look for clean coal

technologies which have less ash and sulphur content, the area in which the United States of America

stands as a pioneer.

To provide a legal dimension to the understanding of the Energy sector, he provided the participants a

brief overview of the Energy Laws in India. He then briefly touched upon the salient features of the

Electricity Act, 2003 empowered with the objective of providing good quality power at reasonable

rates. He simplified and explained the various terminologies used in the legislation such as captive

generation, Renewable Purchase Obligations(RPO’s) for the ease of understanding of the various

intricacies of the law. The regulators in the Electricity sector i.e CERC( Central Electricity Regulatory

Commission at the Central level) and SERC ( State Electricity Regulatory Commission) and their

functions in brief were explained. The judicial pronouncement of Hindustan Zinc v. Rajasthan

Electricity Regulatory Commission established that Captive generation plants are not exempted from

the jurisdiction of the SERC in violation of the Renewable Purchase Obligation and the surcharge

imposed does not fall within the ambit of taxation. A brief overview of the Energy Conservation Act,

2001 also featured in his discussion. The next of the session focussed on the renewable energy sources

and its implications such as high capital investments, enormous land requirements, high start-up costs,

long term risk payments and the harmful effects on the environment. The speaker engaged the

participants in an interactive sessions and set the pace for the rest of the sessions by subtly

highlighting the challenges faced by the Energy sector.

Session 2 - Coal Regulations, Mines and Minerals, and the

Energy Sector The Session was

Chaired by Dr. R

Srikanth, Head of

the Energy and

Environment

Research Program

at NIAS. The

session began

with the role of

coal in the country

and what

challenges we

face with regard

to the coal sector.

He established the

link between the

growth in the

energy consumption and the increase in the Human Development Index (HDI). The growing energy

demand of India is coming at a huge cost of environmental degradation wherein the country’s per

capita Co2 emission is 40% of the world average. To draw a comparison of how other countries

satisfy their energy requirements, he demonstrated how France as of 2017 is clearly a forerunner in

harnessing nuclear energy wherein the energy requirements of the country are satisfied upto 72%

solely by nuclear energy. The tax rate of over 50% has enabled Germany to invest a huge amount in

Renewables. As of All India Record Electricity Generation, 2019 India continues to remain heavily

dependent on coal for achieving energy security.

In order to achieve a greater reliance upon renewables, he proposed for incorporating technologies for

pump storage and achieve greater efficiency in generating hydroelectricity. He pointed out that the

country will remain dependent on coal until 2040 and it requires a congruence of intellectual energy

to turn focus to the renewable energy sector. He further pointed out other challenges such as the

institutional incapacity of the CPCB, SPCB to deal with the enforcement and monitoring of the

renewable energy sector. He further pointed out that overlap of jurisdictions and authorities under the

Mining laws and the Environmental laws which calls for an unifying authority to improve

environmental governance as echoed in the decision of the Lafarge Umiam Mining Pvt. Ltd. v. Union

of India. The lack of consolidation in the laws creates ambiguity and he proposed for a fresh set of

laws and start afresh. He emphasised the importance of dedicating priorities for Environmental

Compliance of Coal sector.

The last part of the presentation focussed on the Challenges in the coal mining industries which would

lead to environmentally sustainable growth of the sector. In case of open cast mines and there is a

closure of the business in countries such as US and Australia the area has to be restored and

replenished with resources to achieve ecological stability. There is a need to benchmark current

policies and to learn from other countries to adopt environmentally sustainable practices. There is a

requirement of key policy recommendations and its implementation to develop compliance strategies

for a transition to a cleaner power. The major players in the Energy sectors must use their capital and

credit worthiness to support a green transition to more sustainable technologies. The speaker showed a

lot of illustrations, statistics, infographs to depict the topic at hand and lucidly gave a comprehensive

picture of the Coal industry in India.

Session 3 - Electricity Act and Energy Efficiency The Session was chaired by Dr. Manjeri Subin

Sunderraj, Asst Profesor of Law, NLSIU and Mr.

Raghav Parthasarthy, Teaching Associate, CEERA,

NLSIU. The Session was commenced with an

understanding of the concept of energy conservation and

the origin of the idea of energy conservation in India. In

the 1970’s, after the ‘Gulf Oil Shock’ created as a

consequence of the Yom Kippur war, there was a global

rise in oil prices. This repercussion also had a significant

effect in India. Prior to the oil shock, the Government of

India had taken some efforts towards the conservation of

petroleum products. However, it was only after this global

catastrophe that India began viewing the idea of energy

conservation from a different perspective. The legal

framework and the institutional mechanism was in its very

nascent stage. There was no separate and distinct ministry

at the centre to deal with energy in particular. However, energy conservation was vested with the

energy wing of the Ministry of Power.

The first step taken to improve the legislative framework was in 1994 when a working group was the

set up to formulate a legislation. As a result, the Energy Conservation Act, 2001 was enacted. The

main aim of the Act was to promote energy efficiency along with energy conservation.

Furthermore, the role and functions of the Bureau of Energy Efficiency was delved into. The Bureau

of Energy Efficiency was set up for the purpose of ensuring large number of programmes towards

promoting energy efficiency in the country.

Proceeding further, the session highlighted the role of the Central Government under the Energy

Conservation Act, 2001. The functions of the Central Government are as follows;

- To identify a designated class of consumers

- To notify Rules and Regulations

- To ensure concerted efforts between State Governments

Then, the session included a brief overview of the Energy Conservation (Amendment) Act, 2010 and

its implication on the legal framework. The critical points of the Amendment included the

introduction of trading in energy, the increase in penalties imposed for non-compliance of obligations

under the Act and the vesting of power with the CG to issue Energy Savings Certificate.

Finally, the discussion by Mr. Manjeri concluded with few pointers of the 11th Five Year Plan and its

role in the energy sector and the goals of the National Action Plan on climate Change.

Mr. Raghav steered his discussion with a

descriptive explanation of the constitutional

and legal framework for regulation of

electricity provision in India. Electricity as a

legislative subject is covered in Entry 38, List

III of Schedule VII of the Constitution. The

legislative framework in India on electricity

was initiated in 1948 with the enactment of the

Electricity Supply Act. This was followed by

the Electricity Commission regulatory Act,

1998. However, these legislations were

inadequate and wrought with ambiguities.

Therefore, post the privatisation era, a robust legislation was brought into force with the enactment of

the Electricity Act, 2003.

On a concluding note, Mr. Raghav instituted an interactive discussion on how ‘theft’ under the

Electricity Act, 2003 is different from ‘theft’ under the Indian Penal Code, 1861. It was stated that the

difference lay in the fact that since electricity is not property as defined under the IPC, it cannot be

covered within the Code.

Session 4 -Nuclear Energy in India: Legal and Regulatory

Challenges

The Session was chaired by Ms Raagya Zadu, Doctoral Scholar and Teaching Associate,

CEERA, NLSIU. In this session, Ms. Raagya delved into the regulatory aspects pertaining to

nuclear energy and the challenges that arise in that respect. The session began with an overview of the

evolution of nuclear energy in India. In 1948, Prime Minister Jawaharlal Nehru introduced the Atomic

Energy Bill in the Indian Parliament and the Atomic Energy Act, 1948 was enacted. The first nuclear

reactor in Asia – Apsara was built in India during the 1950s which marked a significant jump in

India’s nuclear policy. However, India did not ratify the Non-Proliferation Treaty in 1976. But, in

2005 India entered into the Agreement with United States under which India agreed to separate its

civil and military nuclear facilities and to put most of its civil nuclear facilities under International

Atomic Energy Agency (IAEA) safeguards and, in exchange, the United States agreed to work toward

full civil nuclear cooperation with India.

Proceeding further, the discussion delved into the institutional framework for regulating nuclear

energy in India and the role of India in the International realm. India is a signatory to the Convention

on Supplementary Compensation for Nuclear Damage. However, India is not a signatory to the

Vienna Convention on Civil Liability for Nuclear Damages and the Paris Convention on Third Party

Liability.

In the next portion of the session, Ms. Raagya ha an elaborate discussion on the Civil Liabilities

Nuclear Damages Act, 2010. The CLND is a parliamentary statute that creates water tight liability.

However, it is laden with many criticisms. The first criticism is that the legislation does not confirm

with the 1960 and 1963 Conventions. Secondly, the legislation, as under section 17, creates a right to

recourse against the supplier which has served as a major barrier for foreign suppliers to invest in

India. Thirdly, it allows the channelling of liability to the operator thereby making the operator strictly

liable for any of damage that arises from a nuclear accident. Lastly, the Act takes into account future

liability costs in the claims of victims.

Finally, the session concluded with a few highlights on why nuclear energy is the most viable option

for sustainable development and the challenges that arise in the implementation of effective policy

frameworks in India.

Day 2 – 12th

November 2019

Session 1 - Cleaner technologies, climate change and law in

the energy sector The Session was chaired Prof. (Dr.)

M K Ramesh, Professor of Law,

NLSIU. The session began with the

discussion on what possibly constitutes

clean technology. A clean technology

is any product or service which

channels human innovation in an

environmentally sustainable manner.

The range of technologic approaches

includes- Recycling, renewables and

green transportation. The human

activities lead to generation of

Greenhouse Gases (GHG’s) which

ultimately results in depletion of the

Ozone layer. He stressed that the Global economy is a carbon-based economy wherein 60% of the

global energy demand is met by carbon which calls for the need for cleaner technologies. He added

that clean technology is a part of human enterprise as there is a constant endeavour to improve upon

the existing product. Therefore, it becomes important and inevitable to shift to clean technologies.

His talk focussed on the constant tussle between the developing and developed countries with regard

to climate change concerns. The speaker traced the trajectory of the rise in the environmental

consciousness on the global level in 1992 by means of the Kyoto Protocol. This Protocol envisaged an

element of equity wherein the principle of common but differentiated responsibility. The Annex-1

countries to the Protocol are the ones who are responsible for the ecological debt on historic

emissions. The Protocol empowered with the objective of sustainable development by ensuring that

all the countries come together for the cause of climate change and reduce emission levels. It had 3

major means to effectuate the Protocol-

Joint implementation

Carbon credits

Clean Development Mechanisms(CDM)

Clean technologies is an offspring of the CDM’s envisioned under the Protocol. Until 2008, there was

no significant progress which was made. Upon the Russia becoming a member, developmental

projects in India gained a massive momentum which unfortunately took place at the cost of the

environmental concerns. This was followed by a proposal by a few countries demanding for a

protocol called Kyoto II, however it bore no fruit. In 2015, with the Paris Agreement, the countries

were to demarcate voluntary restrictions by means of Nationally Determined Contributions (NDC’s).

With the United States of America having withdrawn under the Paris Agreement, what the Agreement

is going to achieve in terms of achieving a global consensus remains a question in itself. The entire

session gave the participants a clear understanding of the interface of the energy sector and the

concerns of climate change. Being a discussion oriented session, the speaker engaged with the

participants in many thought-provoking discussions.

Session-2 - Energy Law in India: Sectoral Overview Right to

Energy: Constitutional dimension

The session was chaired by Prof. (Dr.) Sairam Bhat, Professor of law, NLSIU, and Raagya Zadu,

Doctoral Scholar and Teaching Associate, NLSIU. Prof. Sairam Bhatt began his session drawing

everybody’s attention to the licenses of the Electricity Act, 2003 and about the role, responsibility and

need of licensing. Generally, a license is perceived as a contractual agreement. The licensee has

certain obligations which he cannot violate under the respective act. As per the contractual rule, what

is stated in the statute cannot be abridged, waived or infringed.

Section 3 of the Electricity Act, 2003 deals with the National Electricity Policy and Plan. The latest

tariff guideline policy was recently released in 2019 by CERC. The National Electricity Policy, 2005

and the National Electricity Plan 2015 are being followed now. Discussion was done on various

sections of the Electricity Act which determine tariff, determination of tariff by bidding process, and

the procedure for a tariff order. Compensatory tariffs which was introduced by the SERCs which

deals with alteration, modification and novation.

Few Supreme Court judgements regarding Section 62 of EA were discussed.

EM Co. Ltd. v Gujarat Urja Vikas, 2016

Solar Semiconductor Power Ltd. v Gujarat Urja Vikas, 2017

Both of the cases stated that the Supreme Court has the right to intervene in determining tariff. When

tariff is determined under Section 63, the grounds of interference include, Change of law and Force

Majeure. The implications of competitive bidding process were also discussed in the session. Section

17 of EA deals with duties/ obligations of the licensee. HE discussed the CCI v CERC case and about

implications of abuse of dominance. On this note, he ended his talk.

Ms. Raagya Zadu continued the session and began her talk on the Constitutional dimension of right to

energy. She drew the attention of everyone by prompting a very interesting question in the room –

“Which sector sector is immune to the energy sector?”, which led to an interesting discussion. After a

lot of brainstorming by the participants, the answer was revealed that there is absolutely no sector

which is immune to the energy sector.

She further highlighted the differences between energy, clean energy, sustainable energy and

renewable energy. She raised questions in the session as to what should an energy policy include and

what would be an ideal mix. The Integrated Energy Policy was a practical approach to answering

these questions; however, it had its drawbacks too. An ideal energy mix must include conventional as

well as non-conventional sources.

Clean Energy was the next subject elucidated upon in the session. It includes the following:

Clean coal

This includes ultra-critical/ super critical TPPs. It confirms with the MOEF&CC 2015

standards. Three coal gasification plants had come up on this basis. However, this requires

maximum amount of electricity.

LNG- Liquified Natural Gas

CNG- Compressed Natural Gas

Geothermal Energy

Ethanol/ Jatropha Oil (Biofuel)

Nuclear Energy

Wind Energy

Hydro Energy/ Hydroelectricity

A detailed discussion followed on the impact of energy

on other sectors such as the Infrastructure sector,

automobile sector, transport, real estate, financial sector

and the information technology sector. Summing up all

of the sectors, ma’am addressed multiple questions and

doubts and clarifying all of them, and ended the session.

The session also had a discussion on the Natural Gas

sector by Mr. Raghav Parthasarthy.. The Natural Gas

Sector can be divided into upstream, downstream and

midstream sectors. In the division, the upstream sector

deals with exploration and tapping of resources by

Conventional Energy sources

•COAL

•OIL

•GAS

•FIREWOOD

Non Conventional

Energy sources

•SOLAR

•WIND

•HYDRO

•TIDAL

seeing viability and is governed by the Director General of Hydrocarbon. The downstream sector

deals with issues of licenses and permits which are governed by Petroleum and Natural Gas

Regulatory Board, a statutory authority established under the Act of 2006. The PNGRB has specific

powers like refining, retaining and supplying to consumers. There are several legislations that govern

Natural Gas like Petroleum Act of 1934, Oil Industry Development Act of 1974, Oilfields Act 1948,

Petroleum and Natural Gas Rules of 1959, etc. The first place to have oil in India was Digboi.

Exploration License Policies were initially granted only to PSUs or Government and there was not

much private participation. This lead to the enactment of a New Exploration and Licensing Policy

(NELP) for oil and natural gas in India to include private companies. NELP was in force from 1996-

2015 but only 28 plots were allotted for exploration and investment was required. This lead to the

enactment of the Hydrocarbon Exploration Licensing Policy (NELP) in 2016. NELP was based on a

profit sharing mechanism and revenue sharing but these were not implemented in HELP. Further

HELP extended the period of license to 8 and 10 years and gave exploration grounds to private

parties. Open Acreage Licence Policy was also implemented.

In 1999, Reliance got a licence through NELP to explore the Krishna- Godavari Basin. A Production

Sharing Contract was entered into and after exploring India’s biggest natural gas reserve, there was a

dispute on how to sell the resource. Reliance fixed a cost of $2.4mmBTU but the Government made it

4.2 and the same was finalised by Pranab Mukherjee, the then President. The natural gas was meant

for the citizens and not private parties thus the resource should be given to the Government after

explored. Thus the reserve was given to the Government and the Krishna- Godavari basin is the third

largest reserve of natural gas, after Russia and Qatar.

Session 3 - Power Purchase Agreements and PPP in Energy

Sector The session was chaired by Mr. Rohith

Kamath, Advocate and CS, Rex Law

Chambers.

He started his session by explaining

about the various forms of public private

partnerships and they are as follows-

● BOT- build, operate and transfer

● BOO/BOOM- build, own,

operate, manage

● BOOT- build, own, operate and

transfer

● BOLT- build, own, lease and

transfer

● LDO- lease, develop and operate

● ROT- rehabilitate, operate and transfer (in brownfields)

● DBFOT- design, build, operate and transfer

● Service and management contracts

PPPs help in bridging the gap between the government and private parties. The government has the

money but lacks management which is given by the private parties.

Power Purchase Agreements are entered into between the generation and transmission stages of

energy. It is entered into with DISCOMs, last consumers, private steel plant, industries and

independent power producers. The types of PPAs are synthetic PPA and behind the meter PPA. The

operations are usually given to DISCOMs. Dabhol in Maharashtra was the first PPA. An Engineering

Procurement and Construction Contract and Fuel Supply Agreement was entered into with Enron in

Dabhol-coast where there is a thermal heat cooling plant and cost of water is less. A 24/7 running

process was constructed. A power producer can go ahead with the industry unless he has a PPA. The

advantages of PPA is that there is revenue for generator and there is knowledge about how much

should be produced and sold.

Certain crucial clauses in a PPA were discussed such as the rules, output guarantees, cost allocation,

duration, tariff rate, payment terns etc. Green Procurement Policy of 2016 ensure long term contracts

of PPA.

The contracts that impact PPA are-

● Shareholder agreements and loan agreements

● EPC- Engineering Procurement and Construction Contract

● FPA/FSA- Fuel Purchase Agreement and Fuel Supply Agreement

● Operation and Management Contracts- economies of scale, Ancillary and wheeler agreements

● Land lease

● Utility agreement

● Financial agreement

The session was concluded by discussion about Privity and PPA and third party disputes. The cases to

be referred to are as follows-

● National Highway Authority of India v. China Coal Construction Limited (2006)

● Dabhol International Arbitration (2005)

Session 4-Consumer and the Electricity Sector The Session was chaired by Y.G Muralidhara, Founding Trustee, CREAT.

The session elucidated on the various nuances of the Electricity Act of 2003. It was mentioned that in

the earlier acts regarding this sector there was no mention about its implications on consumers, which

is now included in this act. Prior to this act, consumer was just considered as a receiver or beneficiary

of electricity. A consumer had no voice, no opportunity, no space available in the electricity

governance. That’s mostly because service providers enjoyed natural monopoly in the electricity

sector. Karnataka was the first state in India to privatize the electricity sector. Prior to the

implementation of the EA 2003, there were consequences on consumers. Consumer was not

recognized as a stakeholder. There was no RTI to seek information and absolutely no transparency

was present. The quality of services also suffered. Once the Electricity Act of 2003 was implemented,

consumer was accorded primacy. The electricity governance included three elements; Transparency,

Participation & Accountability

The power shifted from state to the regulatory authority. The functions of these regulatory authorities

include; Licensing authority, Fixing tariff and Adjudicating matters. Citizen involvement was made

mandatory, in whatever form or whatever subject.

This Act also addresses various concerns like ethical or social concerns. These concerns were raised

in the form of questions in the session. Towards the end of the session, sir opened the floor for

question and addressed all of them with utmost interest. He gave everybody very interesting answers

and delivered an insightful lecture.

Session 5 - Bilateral Investment Treaties and Energy:

International Contracts The Session was chaired by Mr. Rohith Kamath. Session was commenced with an overview of the

concept of privity to contract and its importance in the realm of Bilateral Investment Treaties (BITs).

On an informative note, it was stated that the Government of India had altogether entered BITs with

103 States. However, around 60 of term were unilaterally revoked by India and they are in the process

of re-negotiation Then he proceeded by giving a general understanding for the need of BITs and the

purpose of BITs. A BIT being in the nature of a Memorandum of Understanding, it has binding value

unless and until there exists a non-binding clause that particularly and expressly states that the MoU

and its terms and conditions are not binding. It is for the purpose of affording protection to the

investors and their investments and covers aspects of taxation. It also covers recourse to dispute

resolution which is most often Arbitration

The session then covered a basic understanding on the Rules of Interpretation for BIT It was stated

that the theory of precedent and Stare decisis is not strictly applicable. However, customary

international law requires that a uniform law may be in place and therefore previous cases may have

persuasive value.

The next part of the session went into the nuances of BITs by delving into various illustrative case

laws such as the Dabhol Debacle: June 1992 – 1995, the White Industries case and the Antrix – Devas

case.

Session 6 - Energy Audits The session was chaired by Mr. Sanjay Seetharaman, Assistant Director, National Productivity

Council, Bengaluru. The session began with the speaker giving a brief introduction regarding energy

management definition. The energy conservation Act, 2001 defines an “energy audit” as a method of

verification, monitoring, analysis and calculating the energy utilisation in the particular industry. He

emphasised the need for energy audits as it provides a benchmark for managing the energy

requirements and making optimum utilisation of the energy resources. On the basis of the function

and the type of industry, energy audits can be classified into 2 types- Preliminary energy audit and

detailed energy audit. Apart from this, there is a specialised type of energy audit known as the

targeted energy audits. Using the input obtained from preliminary audits, these audits conduct a

survey of target subjects and costs.

Energy audits in this day and age assume immense importance owing to its potential of achieving

energy efficiency and cost reduction. He provided an elaborate picture of the methodology adopted in

preliminary energy audit methodology wherein the following steps are followed-

Establish energy consumption

Volume of production

Scope of energy savings

Identify areas of attention

The detailed energy audit on the other hand is categorised into pre-audit phase, audit phase and post-

audit phase. The pre-audit phase is largely information intensive. The energy audit tem engages in

macro data collection. This method enables the team to familiarise themselves with the industry by

first hand observation. The audit phase includes the survey and monitoring of the industry by means

of drawing energy utility diagrams. This phase largely revolves around the cost-benefit analysis and

identification and development of Environmental conservation opportunities. The reports and insights

obtained by the energy audit team is presented to the top management. In the post-audit phase, there is

a consolidation of all the potential areas which are economically and technically feasible for

implementation in the industry to ensure better energy efficiency. The speaker then delved into the

benefits of energy audits as a means to attain optimality in energy efficiency. Energy audits are only

applicable to the designated consumers under the Bureau of Energy Efficiency Regulations, 2008.

This is one of the significant challenges as in addition these audit reports are not binding on the

Companies. The session concluded with a video on Sierra Offshore Software Development Facility as

the world’s 2nd

greenest building with emphasis on energy efficient mechanisms. This gave the

participants a unique insight into how small measures taken at an individual level can contribute to

achieving a greater energy efficiency.

Day 3 – 13th

November 2019

Session 1 – Solar Energy: Legal and Regulatory Challenges The session was chaired by Mr.

Ritesh R, Manager, BHEL

Electronics Division and Ms.

Raagya Zadu. Ritesh Sir

commenced the session by asking

which sector predominantly use

energy? The sectors that

predominantly use energy are the

industrial sector, agricultural

sector and the transportation

sector. The availability of water is

a problem in a place like

Bangalore where we use 900m lts

of water and sewage goes upto

1100m lts. Power is required in

every aspect of our life. The Human Development Index considers parameters like health, education,

living standards and per capita power consumption, thus, the better power consumption, better the

development index.

Mr. Ritesh further focused on solar as a renewable source of energy. There are two primary energy

sources, distributive and intermittent source, and concentrated and continuous source. The energy is

sourced base load of energy and peak load of energy, and the base load of energy can be satisfied by

nuclear and thermal energy. But there exists a power deficit and in order to overcome this power

deficit and develop, we can’t rely on solar or thermal. Nuclear should be concentrated upon and the

clean coal technology and the de- sulphurization of coal must be adopted. Bangalore is most polluted

because of automobiles. Methanol is blending with petroleum fuels up to 80%. The impact on balance

of trade is now negative due to import of fossil fuels.

The ability to establish a solar panel depends on various factors. The first one is the availability of

land. The consumption of space for a solar panel is huge so there have been solutions proposed like

canal top or roof top for better target to be achieved, for example the floating solar on Rihand Dam. It

is challenging to attain 175GH which is the International placed goal that India has set to achieve. The

second factor is the capacity factor where wind take around 25%, solar takes about 20% and Nuclear

takes 90%. But the efficiency of solar panel is only 14%-18% as the panels are sensitive and

susceptible to damage even form a peck of dust. Silica wafers are needed for solar panels which are

not manufactured in India and so they are imported. A landmark WTO ruling with regard to this is the

Solar DCR Case (2016). The manufacturers should further have a safeguard duty which was held in

Adani Renewables and ACME Solar v. Maharashtra State Electricity Distribution Company Ltd.

With regard to tariffs in solar energy, a renewable purchase obligation is placed and a case with

regard to tariffs is Hindustan Zinc Ltd. v. Rajasthan EC. There is a supply side push through FIT and

a demand side push through RPOs. Trading of REC is with the DISCOM. But the efficiency of the

solar panel is reduced when transferred to the DISCOM and additionally solar power is very costly.

Further, there is over-generation which is wasted because they aren’t stored in battery energy storage

solutions which is a long term goal.

Another pertinent issue with regard to solar panels is the chemical and hazardous waste generated

from the silica in the solar panel. When silicon tetrachloride is mixed with water it becomes a hazard

mixture of hydrochloric acid. It famous case in the regard is the GEDCOL or Green Energy

Development company of Odisha case. The waste generated from solar panels is like slow poison.

There is also a debt of over 70,000 crores from the DISCOMs in the establishment of solar panels.

There is an annual generation of over 7mn tonnes of waste.

Ms. Zadu discussed candidly about the challenges of solar energy in India by discussing the life cycle

assessment of solar panel and its waste generation and disposal. Some of the managerial and

regulatory challenges which pose a question mark on the future development were deliberated upon in

a discussion method.

Session 2 -Energy Management in India; A Policy and

Managerial Challenge in India The session was chaired by Dr.

Anil B. Suraj, Professor IIM

Bengaluru.

The session commenced with a

brief introduction and agenda

setting which included Indian

Regulatory System, Challenges

and necessary policy steps.

Under the Indian regulatory

system, he elucidated various

aspects. The importance of

equitable emphasis and

substantive principles was

discussed along with its

implications on regulators. In India, we have multiple regulators of different kinds like SEBI, telecom,

etc. These statutory bodies should have independence, not only on paper but even with respect to the

functional autonomy. The regulators must necessarily be specialized and experienced, and consumers

should be considered as a part of the regulators. These bodies need to be participative in the country’s

issues. As a part of the implications of the federal system in India, energy sector is mostly governed

by the laws made by the Parliament. The issues faced by the energy sector with respect to federal

matters include consumption pattern, statistical data reports, disclosure, etc.

Sir elucidated on the prevailing legislative trends in the world. These trends are moving from

normative to enforceable. He used the phrase “Don’t let the best become the enemy of good” to

explain the same. Different nations have different dynamics regarding legislative reforms. It is

practically not possible to borrow all of these trends from them, since we have to consider what would

best suit our nation’s policies.

Session 3 - Law and Policy for Generating Companies and

Administrative Challenges in the Electricity Sector The session was chaired by Shri U H

Subramanya, former Officer at BESCON.

The session began with the brief history of

the Electricity sector in India whose roots

can be traced back to Karnataka. In 1902,

Asia’s first hydro generating station was set

up in Shivanasamudra, Karnataka to supply

power to the Kolar Gold Fields. Following

this a series of legislations were enacted to

regulate the sector- Indian Electricity Act,

1910, Electricity Supply Act, 1948 which

resulted in the formation of the State

Electricity Board, closely followed by the

Electricity Supply Rules, 1956. In 2003, the

Electricity Act consolidated all other

previous legislations and provided for a

comprehensive legal regime for governing

the electricity sector in the country.

The power sector faces challenges in the technical as well as the commercial domains. Technical

challenges in the power sector:

Low plant load factor in Thermal plants due to Renewable Energy power contribution to the

Grid

Underutilisation of installed capacity

Challenges in implementation of environmental policies

Steep ramping requirements due to uncertainty leading to low balancing capacity

Commercial challenges in the power sector:

All DISCOM’s under huge losses

Stalled government subsidies for the power sector

Inability to clear off power purchase arrears

No means to invest money for improving existing works and new capital works

Placing these challenges in context, the speaker explored the possibilities of combating these

challenges in the power sector. The sector-specific requirements of the Industry pose significant

challenges to the growth and development of the power sector in the country.

The session concluded with the need to move to renewable energy sources and effective regulation of

Electricity sector.

Session 4 -Corporate Law and Financing as Applicable to

Energy Companies The session was chaired by Mr .J

Sundareshan, Founder & Chief

Advisor, J Sundharesan &

Associates, Bengaluru. He began

the session with an interactive

discussion on whether every asset

is backed by a liability or every

liability attracts an asset. With this

thought in mind, the session

focussed on the financial situation

of Jet Airways and the causes

underlying its adverse situation in

the commercial aviation sector.

Following this, Mr. Sundareshan

explained the meaning of

‘Liquidity Risk’ and the need for

business enterprises to identify the

existence of liquidity risk in their

businesses. Liquidity risk is said

to arise when a business defaults on repaying its creditor who supplies the most essential

material/component for running the business. By citing examples of Snapdeal, DHFL and Jet

Airways, the concept was made clear.

Proceeding further, Mr. Sundareshan gave an introduction to basic accounting principles to explain

the nuances of financing businesses and supported this explanation with various examples.

Furthermore, he provided a general understanding of company law by delving into the characteristics

of a company as under the Companies Act, 2013 and also explained the differences between a

company and other business entities.

The next part of the session focussed purely on the financial aspects of starting a business in India. In

this respect, Mr. Sundareshan highlighted the various methods of raising business finances in India

with example. A few methods of raising finance as discussed in the session include Bootstrapping,

Crowdfunding, Angel Investors, Venture Capitalists, Private Equity firms, Loans from Banks and

Financial Institutions etc. With specific reference to companies in the energy sector, Mr. Sundareshan

illustrated other means of raising finances by way of debt and equity, raising share capital, issuing

debentures, granting of hybrid perpetual securities. This was coupled with few examples such as Tata

Group and Sterling and Wilson Group.

Valedictory Ceremony The three-day certificate course

was concluded with a short

valedictory ceremony which

was presided over by the Chief

Guest Mr. S. Krishnan, Sr.

Head-Legal at Antrix

Corporation Ltd. The

ceremony began with Mr.

Krishnan acknowledging the

success of the course and the

efforts that the team of CEERA

has put into in making it a

success. This was followed

with a short speech by Mr.

Krishnan on the importance of

the energy sector in India and

the significant role it plays in

the development of the economy. He threw light on how the certificate course was an instrumental

step in incorporating practical expertise into the realm of energy law and policy. Following this, the

session moved on to the distribution of participation certificates to the participants. On this note, the

three-day certificate course came to an end.

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