1. INTRODUCTION

The relationship between competition law and renewable energy markets has become increasingly important as electricity systems move away from traditional fossil-fuel-based generation toward solar, wind, hydro, biomass, battery storage and other clean-energy technologies.

Renewable energy is not merely an environmental sector. It is also an economic market in which generators, distribution companies, power exchanges, transmission utilities, traders, investors and consumers compete for market access, transmission capacity, power-purchase agreements, renewable-energy certificates and investment opportunities.

Therefore, renewable-energy regulation has two interconnected objectives:

First, the State seeks to encourage renewable energy because of energy security, climate change and environmental considerations.

Second, the regulatory framework must ensure that renewable-energy markets remain competitive, transparent and non-discriminatory, rather than becoming dominated by a small number of generators, utilities, intermediaries or infrastructure owners.

In India, these objectives principally interact through the Competition Act, 2002 and the Electricity Act, 2003, together with regulations and decisions of the Competition Commission of India (CCI), Central Electricity Regulatory Commission (CERC), State Electricity Regulatory Commissions and appellate courts. CCI itself describes its statutory role as eliminating practices adversely affecting competition, promoting and sustaining competition, protecting consumers and ensuring freedom of trade.

2. MEANING OF COMPETITION IN RENEWABLE ENERGY MARKETS

Competition in renewable energy markets refers to the process by which multiple renewable-energy producers, suppliers, developers, traders and other market participants compete to:

• produce electricity;
• obtain generation projects;
• secure Power Purchase Agreements (PPAs);
• obtain transmission and grid access;
• supply electricity to distribution companies;
• participate in renewable-energy auctions;
• trade electricity through power exchanges;
• sell Renewable Energy Certificates (RECs);
• attract investment;
• provide electricity at competitive prices; and
• develop more efficient renewable technologies.

Thus, competition policy attempts to prevent a situation where a single enterprise or group of enterprises can control prices, restrict market entry, deny grid access or manipulate procurement conditions.

3. WHY COMPETITION IS IMPORTANT IN RENEWABLE ENERGY

Renewable-energy markets have certain special characteristics.

Traditional electricity systems were often based upon vertically integrated public utilities controlling generation, transmission and distribution. Renewable-energy reforms introduce independent generators and private developers into this structure.

For example:

Solar Developer A → Grid → Distribution Company → Consumer

Wind Developer B → Grid → Distribution Company → Consumer

Solar Developer C → Power Exchange → Buyer

If the transmission network or distribution company discriminates between developers, effective competition can be seriously distorted.

Consequently, renewable-energy competition requires not only several generators but also fair access to essential electricity infrastructure.

4. LEGAL FRAMEWORK IN INDIA

A. COMPETITION ACT, 2002

The Competition Act provides the general competition-law framework applicable to markets in India.

Important provisions include:

Section 3 – Anti-Competitive Agreements

Section 3 prohibits agreements causing or likely to cause an Appreciable Adverse Effect on Competition (AAEC).

In renewable-energy markets, possible concerns can include:

• bid-rigging in renewable-energy auctions;
• cartelisation between solar developers;
• market allocation between electricity suppliers;
• price-fixing;
• collusive bidding for government renewable projects;
• agreements restricting entry of competing renewable developers.

B. SECTION 4 – ABUSE OF DOMINANT POSITION

Dominance itself is not prohibited.

What is prohibited is the abuse of a dominant position.

This distinction is particularly important in energy markets because an enterprise may naturally acquire substantial market power because it owns important infrastructure.

Possible abuses could include:

• discriminatory grid access;
• excessive or unfair charges;
• denial of transmission access;
• predatory pricing;
• exclusionary conduct;
• discriminatory treatment of renewable generators;
• leveraging dominance from transmission into electricity supply.

C. SECTIONS 5 AND 6 – COMBINATIONS

Large-scale mergers, acquisitions and combinations in the renewable-energy sector can come within India's merger-control regime where the applicable statutory requirements are satisfied.

This is becoming increasingly important because renewable-energy markets frequently experience:

Acquisition of solar portfolios + acquisition of wind assets + consolidation of developers + infrastructure investment.

Excessive consolidation can reduce the number of independent competitors in the market.

CCI has also expressly taken the position that the presence of the Electricity Act's sectoral regulatory framework does not mean that electricity-sector combinations fall exclusively outside competition-law merger control.

5. ELECTRICITY ACT, 2003 AND COMPETITION

The Electricity Act, 2003 itself contains important provisions supporting competitive electricity markets.

Its framework promotes concepts such as:

competition + efficiency + economical use of resources + consumer protection.

Particularly important are:

Section 61

Deals with principles governing tariff determination.

Section 63

Provides for adoption of tariff where tariff has been determined through a transparent process of competitive bidding in accordance with Central Government guidelines.

Section 66

Provides for development of the electricity market.

Section 79

Deals with functions of the Central Electricity Regulatory Commission.

Section 86

Deals with functions of State Electricity Regulatory Commissions.

These provisions create the sector-specific regulatory architecture within which renewable-energy competition operates.

6. COMPETITIVE BIDDING IN RENEWABLE ENERGY

One of the most important methods of introducing competition into renewable energy is competitive bidding.

Suppose the government requires:

1,000 MW Solar Power

Several developers submit bids:

Subject to the applicable auction design and qualification requirements, competition can allow the procurer to discover a lower market-based tariff.

Advantages

Competitive bidding can:

• reduce renewable-energy prices;
• encourage technological innovation;
• prevent arbitrary project allocation;
• increase transparency;
• improve efficiency;
• attract private investment;
• facilitate price discovery.

However, poorly designed auctions can also generate problems such as strategic bidding, market concentration or bids that later prove economically unsustainable.

7. COMPETITION FOR GRID ACCESS

Renewable generators generally need access to transmission and distribution networks.

This creates an important competition issue because the grid has characteristics of an essential network infrastructure.

Consider:

Dominant Utility

↓ controls

Transmission Network

↓ access required by

Solar Developer / Wind Developer / Independent Generator

If the network operator refuses access to competitors while favouring an affiliated generator, competition can be undermined.

Therefore, electricity regulation relies heavily upon principles such as:

Open Access

Open access permits eligible market participants to use transmission or distribution infrastructure subject to statutory and regulatory requirements.

It reduces the ability of incumbent utilities to completely exclude independent generators.

8. RENEWABLE ENERGY CERTIFICATE MARKET

Competition also exists through Renewable Energy Certificates (RECs) and related renewable-energy market mechanisms.

Broadly, certificates separate certain renewable attributes from the physical electricity transaction.

This allows obligated entities to comply with renewable-energy requirements through regulated market mechanisms where applicable.

A competitive certificate market can improve:

• liquidity;
• price discovery;
• renewable-energy investment incentives; and
• compliance flexibility.

At the same time, regulators must address risks of market manipulation, concentration and artificial scarcity.

9. POWER EXCHANGES AND RENEWABLE ENERGY COMPETITION

Power exchanges provide platforms on which electricity can be traded.

Renewable-energy integration into power markets can create products and trading mechanisms connected with:

• green electricity;
• day-ahead transactions;
• real-time markets;
• renewable-energy obligations; and
• renewable certificates.

The regulatory challenge is to create a market that allows efficient trading while preventing market manipulation and anti-competitive exclusion.

A 2026 CERC matter involving the Indian Energy Exchange and National Load Despatch Centre concerned amendments to power-exchange business rules and contract specifications in order to align exchange arrangements with the renewable-energy consumption framework, illustrating how renewable policy increasingly interacts directly with organized electricity markets.

10. MAJOR COMPETITION PROBLEMS IN RENEWABLE ENERGY MARKETS

A. MARKET CONCENTRATION

A small number of firms may acquire a substantial share of:

• solar projects;
• wind capacity;
• storage facilities;
• PPAs;
• transmission infrastructure; or
• electricity trading.

High concentration does not automatically violate competition law, but it can increase the possibility of market power.

B. CARTELISATION

Renewable-energy developers participating in auctions could theoretically coordinate bids.

For example:

Developer A agrees not to bid below ₹3.00.

Developer B agrees to bid ₹3.05.

Developer C submits an intentionally non-competitive bid.

Such conduct can transform an apparently competitive auction into bid rigging.

C. ABUSE OF DOMINANCE

A dominant enterprise could potentially:

• deny competitors network access;
• impose discriminatory conditions;
• charge unfair prices;
• restrict market entry; or
• leverage control over infrastructure into another electricity market.

Competition law focuses upon the abuse, rather than punishing an enterprise merely because it has become commercially successful or large.

11. CASE LAW – GUJARAT URJA VIKAS NIGAM LTD. v. SOLAR SEMICONDUCTOR POWER CO. (INDIA) PVT. LTD.

Citation: (2017) 16 SCC 498

This is an important Supreme Court decision concerning renewable-energy tariff regulation.

FACTS

A solar power developer was governed by the tariff framework established by the Gujarat Electricity Regulatory Commission (GERC).

A dispute arose concerning extension of the relevant control period under the tariff order.

The question was whether the Commission could use its inherent powers to extend that control period.

LEGAL ISSUE

Whether an Electricity Regulatory Commission can exercise inherent powers to grant substantive relief beyond the authority provided by the Electricity Act and applicable regulatory framework.

JUDGMENT

The Supreme Court of India rejected an unrestricted conception of inherent regulatory power.

The Court emphasized that an Electricity Regulatory Commission is a creature of statute and cannot assume powers that have not been conferred upon it.

The judgment specifically dealt with the statutory tariff framework under Sections 61, 62 and 64 of the Electricity Act, 2003.

LEGAL PRINCIPLE / RATIO DECIDENDI

A statutory regulatory commission cannot use inherent procedural powers to create substantive powers that the governing statute does not confer.

SIGNIFICANCE

This principle is crucial for renewable-energy markets.

Investor confidence and competition depend upon:

• predictable tariffs;
• transparent regulatory powers;
• stable bidding conditions;
• legally defined authority; and
• regulatory certainty.

If regulators could alter market conditions without statutory authority, renewable-energy investment and competition could be seriously affected.

12. CASE LAW – COMPETITION COMMISSION OF INDIA v. BHARTI AIRTEL LTD.

Citation: (2019) 2 SCC 521

Although this case arose from the telecommunications sector, it is extremely important for understanding the relationship between competition regulators and sectoral regulators, including electricity regulators.

FACTS

A dispute arose concerning alleged anti-competitive conduct in the telecommunications industry.

The issue involved the respective roles of:

Telecom Regulatory Authority of India (TRAI)

and

Competition Commission of India (CCI).

LEGAL ISSUE

When both a specialist sector regulator and CCI have statutory responsibilities touching the same dispute, how should their jurisdictions interact?

JUDGMENT

The Supreme Court recognized the importance of allowing the specialist regulator to determine certain technical and jurisdictional foundational issues within its field before competition-law proceedings move forward in the circumstances of that case.

The decision did not establish that sectoral regulation universally eliminates competition law. Subsequent CCI reasoning has continued to distinguish compliance with sector regulation from compliance with competition law.

LEGAL PRINCIPLE / RATIO DECIDENDI

Sectoral regulation and competition regulation may coexist, but institutional coordination may be necessary where determination of technical sector-specific questions is foundational to the competition dispute.

SIGNIFICANCE FOR RENEWABLE ENERGY

The same institutional problem can arise between:

CERC / SERC

and

CCI

in electricity and renewable-energy markets.

CERC may determine:

• grid rules;
• tariff questions;
• electricity-market regulations;
• transmission matters.

CCI deals principally with:

• anti-competitive agreements;
• abuse of dominance;
• combinations; and
• preservation of competition.

13. CASE LAW – PTC INDIA LTD. v. CENTRAL ELECTRICITY REGULATORY COMMISSION

Citation: (2010) 4 SCC 603

FACTS

The dispute concerned the regulatory powers of the Central Electricity Regulatory Commission under the Electricity Act, 2003.

LEGAL ISSUE

What is the nature and scope of CERC's regulatory authority under the Electricity Act?

JUDGMENT

The Supreme Court recognized the important regulatory functions assigned to CERC under the statutory electricity framework.

The case has subsequently remained influential in understanding the architecture of independent electricity regulation. APTEL's 2026 market-coupling decision, for example, referred to PTC India while stressing the responsibilities of CERC as a market regulator and the statutory objective of protecting electricity consumers.

LEGAL PRINCIPLE / RATIO DECIDENDI

Electricity regulation involves broad statutory regulatory powers, but those powers must remain grounded in the Electricity Act and the regulatory framework created under it.

SIGNIFICANCE

The decision provides an institutional foundation for regulation of modern electricity markets, including:

• power exchanges;
• renewable-energy trading;
• transmission access;
• market development; and
• consumer protection.

14. CASE LAW – SOUTHERN POWER DISTRIBUTION COMPANY v. GREEN INFRA WIND SOLUTIONS LTD.

Supreme Court – 25 March 2026

This recent decision is particularly relevant to the relationship between renewable-energy incentives, tariffs and regulatory policy.

FACTS

The controversy concerned whether a State Electricity Regulatory Commission could take into account a Generation Based Incentive (GBI) provided under a Ministry of New and Renewable Energy policy when determining tariffs payable to renewable generators.

LEGAL ISSUE

Could the State Commission consider the GBI while exercising its statutory tariff-determination power?

JUDGMENT

The Supreme Court held that tariff determination remains within the statutory province of the State Electricity Regulatory Commission. At the same time, regulatory decision-making must follow the relevant principles of tariff fixation and statutory policy.

Importantly, the Court recognized that renewable-energy incentives serve significant policy considerations connected with energy security and transition away from fossil fuels, and stressed the need to balance consumer interests, developer stability and environmental concerns.

LEGAL PRINCIPLE / RATIO DECIDENDI

Renewable-energy tariff regulation cannot be viewed in isolation from the statutory purposes and policy considerations underlying the transition to renewable energy.

SIGNIFICANCE

The judgment demonstrates that competitive electricity markets are not governed exclusively by the goal of achieving the lowest immediate price.

Regulators may have to balance:

Competition + Consumer Price + Investor Stability + Energy Security + Renewable Transition + Environmental Protection.

15. CASE STUDY – SJVN GREEN ENERGY LTD. v. INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LTD.

CERC, Petition No. 556/AT/2025 – Order dated 19 March 2026

FACTS

The matter involved adoption under Section 63 of the Electricity Act, 2003 of charges relating to a 1,000 MW solar photovoltaic project selected through a competitive bidding process under the applicable government scheme.

LEGAL ISSUE

Whether the tariff/usage charges resulting from the competitive bidding process satisfied the statutory conditions for adoption.

DECISION

CERC adopted the relevant charges after considering compliance with the applicable competitive-bidding framework.

LEGAL PRINCIPLE

Section 63 illustrates a fundamental market principle:

Where tariff is discovered through a transparent competitive bidding process conducted in accordance with the applicable Central Government guidelines, the statutory framework provides for its adoption by the appropriate Commission.

SIGNIFICANCE

The case illustrates the practical importance of competitive procurement in large renewable-energy projects.

16. RENEWABLE ENERGY AND CONSUMER WELFARE

Competition ultimately aims to benefit consumers.

A properly functioning renewable-energy market can produce:

More Producers

↓

Greater Competition

↓

Technological Innovation

↓

Lower Generation Costs

↓

Greater Renewable Capacity

↓

Potential Consumer Benefits

However, regulators must ensure that aggressive competition does not undermine:

• grid reliability;
• long-term investment;
• financial viability of generators;
• electricity security; or
• environmental objectives.

Therefore, electricity competition is not simply about the lowest price.

It is about achieving an efficient and sustainable market.

17. COMPETITION VERSUS RENEWABLE-ENERGY SUBSIDIES

Governments frequently promote renewable energy through:

• subsidies;
• tax incentives;
• viability-gap funding;
• preferential procurement;
• renewable purchase obligations;
• renewable consumption obligations;
• feed-in tariffs; and
• other financial incentives.

These interventions can correct environmental and investment problems, but they must be designed carefully.

If subsidies disproportionately benefit selected enterprises without objective criteria, they can create competitive distortions.

Therefore:

Renewable Policy

must be balanced with

Competitive Neutrality

and

Transparent Allocation of Benefits.

18. COMPETITION AND POWER PURCHASE AGREEMENTS (PPAs)

PPAs are fundamental to renewable-energy financing.

A typical structure is:

Renewable Generator

↓

Long-Term PPA

↓

DISCOM / Procurer

↓

Electricity Consumers

PPAs provide revenue certainty and make renewable projects bankable.

However, competition issues can arise where:

• PPAs are allocated without transparent procurement;
• dominant buyers impose discriminatory terms;
• developers receive preferential treatment;
• market entry is restricted;
• long-term contractual arrangements foreclose competitors.

Competitive bidding under Section 63 is therefore particularly significant for renewable procurement.

19. COMPETITION AND ENERGY STORAGE

Battery Energy Storage Systems (BESS) are becoming increasingly important because solar and wind generation is variable.

Storage can:

• store surplus solar electricity;
• release electricity during peak demand;
• improve grid stability;
• reduce renewable curtailment;
• support real-time electricity markets.

But control of large-scale storage could itself create new forms of market power.

Competition authorities and electricity regulators therefore increasingly need to consider:

Generation + Storage + Transmission + Trading

as interconnected parts of electricity-market structure.

20. COMPETITION AND TRANSMISSION CONSTRAINTS

Suppose three renewable generators produce electricity:

Solar A – 500 MW

Wind B – 400 MW

Solar C – 300 MW

but available transmission capacity is only:

700 MW

Competition then shifts from merely producing electricity to obtaining scarce transmission capacity.

Rules governing allocation must therefore be:

• transparent;
• objective;
• non-discriminatory;
• technically justified.

Otherwise transmission scarcity can become a mechanism of market exclusion.

21. MAJOR CHALLENGES

The principal competition challenges in renewable-energy markets include:

1. Concentration of renewable generation assets
2. Dominance of incumbent electricity utilities
3. Limited transmission capacity
4. Discriminatory grid access
5. Bid-rigging in renewable auctions
6. Strategic behaviour in power exchanges
7. Long-term PPAs creating market foreclosure
8. Unequal subsidy allocation
9. Regulatory uncertainty
10. Conflict or overlap between CCI and electricity regulators
11. Renewable curtailment
12. Concentration in energy-storage infrastructure

22. ROLE OF COMPETITION COMMISSION OF INDIA

CCI's statutory competition mandate includes:

Preventing Anti-Competitive Agreements

Under Section 3.

Preventing Abuse of Dominance

Under Section 4.

Merger Control

Through the statutory combination regime.

Competition Advocacy

Promoting competition-friendly government policies and regulation.

CCI specifically states that its role includes eliminating practices adversely affecting competition, sustaining competition, protecting consumers and ensuring freedom of trade.

Therefore, competition law can complement electricity regulation rather than simply duplicate it.

23. ROLE OF CERC AND STATE COMMISSIONS

Electricity Regulatory Commissions are central to renewable-energy competition because they regulate matters such as:

• tariffs;
• transmission;
• open access;
• electricity markets;
• power exchanges;
• renewable obligations;
• grid-related regulation; and
• disputes falling within their statutory jurisdiction.

The key distinction can broadly be understood as:

CCI → Market Competition

while

CERC/SERC → Sector-Specific Electricity Regulation

The two regulatory systems may overlap, making regulatory coordination important.

24. COMPETITION–SUSTAINABILITY DILEMMA

A particularly important modern legal issue is whether competition law should focus exclusively on price competition.

Renewable-energy markets demonstrate why the answer is more complicated.

Suppose:

Coal electricity = ₹3.00/unit

and

Renewable electricity = ₹3.20/unit

A purely short-term price analysis might favour coal.

But broader regulatory analysis may consider:

• pollution;
• carbon emissions;
• energy security;
• long-term fuel costs;
• climate commitments;
• technological innovation;
• intergenerational environmental effects.

Thus, modern energy regulation requires a broader understanding of consumer welfare and long-term market efficiency.

The Supreme Court's 2026 Green Infra Wind Solutions decision reflects precisely this broader balancing approach by recognizing energy security, renewable transition, consumer interests, developer stability and environmental considerations within electricity regulation.

25. IMPORTANT LEGAL PRINCIPLES

The following principles can be extracted from competition and renewable-energy regulation:

1. Competition is a means, not an end in itself.

Competition should ultimately promote efficiency, innovation and consumer welfare.

2. Dominance is not automatically illegal.

It is the abuse of dominance that competition law targets.

3. Renewable-energy auctions should be transparent.

Transparent bidding facilitates genuine price discovery.

4. Grid access is essential for effective competition.

A generator cannot meaningfully compete if it cannot transport electricity.

5. Sectoral regulation and competition law can coexist.

Electricity regulators and CCI perform different but sometimes overlapping functions.

6. Regulatory certainty encourages renewable investment.

Stable legal frameworks reduce investment risk.

7. Competition must coexist with sustainability.

Electricity markets must balance:

Affordability + Reliability + Competition + Energy Security + Environmental Sustainability.

26. CASE LAW SUMMARY

27. CONCLUSION

Competition and renewable-energy policy are complementary rather than contradictory.

Competition encourages:

lower costs + innovation + efficiency + investment + consumer choice.

Renewable-energy regulation promotes:

clean energy + energy security + sustainability + climate protection.

The legal objective should therefore be to create a renewable-energy market in which:

Renewable generators can enter the market freely, compete transparently, obtain fair access to electricity infrastructure, participate in competitive procurement and trading, and operate without anti-competitive exclusion or abuse of market power.

At the same time, CCI, CERC and State Electricity Regulatory Commissions must operate within their respective statutory mandates while coordinating where competition law and technical electricity regulation intersect. Indian law already recognizes that the existence of electricity-sector regulation does not automatically eliminate the operation of competition law; CCI has expressly rejected an absolute exclusive-jurisdiction theory in the context of electricity-sector combinations.

In one line:

Competition law ensures that the transition to renewable energy does not merely create a greener electricity system, but also a fairer, more efficient, innovative and consumer-oriented energy market.