From Gatekeeping to Steering: Adaptive Regulatory Capacity and its Structural Limits in India's Renewable Electricity Transition

Abstract

In June 2025 India crossed a symbolic threshold, drawing half of its installed generating capacity from non-fossil sources roughly five years ahead of the date implied by its Paris Agreement pledge.  The achievement rests on a paradox. The institutions that licensed, priced, balanced and traded the generation behind it were never designed to produce it. The Central Electricity Regulatory Commission (CERC) and the State Electricity Regulatory Commissions (SERCs), constituted under the Electricity Regulatory Commissions Act, 1998 and re-mandated by the Electricity Act, 2003, were built to arbitrate a vertically integrated, coal-dominated, public-utility sector through licensing, cost-plus tariff-setting and dispute adjudication. Renewable generation—variable, capital-front-loaded and market-sensitive—destabilises each of these foundational competencies at once. Drawing on doctrinal analysis of statute, subordinate regulation and apex-court jurisprudence, and on a qualitative reading of regulatory orders and policy instruments from 2003 to 2025, this paper asks whether and how India's electricity regulators are moving from a gatekeeping posture—granting approvals within fixed rules—towards a steering posture that actively designs the institutional conditions of the transition.