Page 43 - Policy Economic Report - Feb 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

In the ICM, industries, as obligated entities, are envisaged to reduce emissions by improving efficiency
and adopting low-carbon technologies. Entities that over-achieve their notified Greenhouse Gas Emission
Intensity (GEI) targets are eligible for issuance of CCC, which are tradable through power exchanges. Non-
obligated entities, including renewable energy producers, may voluntarily register approved mitigation
activities for the purpose of seeking issuance of CCC.

The financial support for implementation of the CCTS is to be met by the Bureau of Energy Efficiency from
the fees and charges collected from entities under the Scheme and its own resources. Regulatory support
for trading activities under the Indian Carbon Market, including matters relating to trading of carbon credit
certificates, is provided by the Central Electricity Regulatory Commission.

The institutional arrangements for implementation of the Scheme comprise a National Steering
Committee co-chaired by the Secretaries of the Ministry of Power and the Ministry of Environment, Forest
and Climate Change, with Grid Controller of India Limited functioning as the Registry and the Bureau of
Energy Efficiency serving as the Administrator.

Draft Electricity (Amendment) Bill, 2025 Intends to Remove Wasteful Duplication in Building
Distribution Network

The Electricity Act, 2003 (Act) already allows multiple distribution licensee in the same area. It also
mandates non-discriminatory open access to the distribution network. But presently, every new licensee
had to build its own separate network, which means duplication of poles, wires, and substations - making
power costlier for everyone. The proposed amendment under draft Electricity (Amendment) Bill, 2025
intends to remove this wasteful duplication by allowing use of other distribution licensee’s network upon
payment of charges decided by the State Electricity Regulatory Commission (SERC) by a distribution
licensee for supplying power to its consumers.

Under the provisions of the Act, the area of supply for each distribution licensee is defined and it has to
be approved by the SERC, while granting license. The subordinate legislations already prescribe a
minimum geographical area for granting a distribution licence - covering either an entire Municipal
Corporation or at least three adjoining revenue districts, or a smaller area only if specifically notified by
the Appropriate Government. Every distribution licensee, whether public or private, will continue to have
a Universal Service Obligation for all the consumers including the rural and domestic consumers, except
the large consumers for which the distribution licensee is specifically exempted by the SERC, as per the
provisions under the proposed draft Electricity (Amendment) Bill, 2025. They have a duty to supply
electricity to all consumers in its area of supply, without discrimination. The amendment further proposed
to mandate the SERCs to establish a clear framework for introducing multiple licensees within the same
supply area, ensuring transparency and fairness.

It is envisaged that there would not be any adverse impact on agricultural and domestic consumers,
rather, the competition will improve quality of service. Further, the subsidies for specified consumer
categories including agricultural and domestic consumers may continue to be provided by the State
Government under Section 65 of the Act.

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