In this article, unpack how and why a recent ruling passed by the Indian Supreme Court (SC) — India's apex court — in the matter of M.K. Ranjitsinh & Ors. v. Union of India1 signals a watershed moment in India's energy transition journey.
The matter centred on the fate of The Great Indian Bustard (GIB), a bird species native to western and southern India, whose rapid endangerment and decline was alleged to be due to large-scale private and public renewable energy infrastructure projects, particularly in the Indian states of Gujarat and Rajasthan.
What does the SC's ruling say about India's focus on energy transition in the face of environmental conservation? And what does this mean for investors looking to leverage opportunities in the energy transition market in India?
India's global commitments to energy transition
At the UN Climate Change Conference (COP26) in 2021, India committed to reaching net-zero emissions by 2070. It also set ambitious targets for 2030, including increasing its non-fossil electricity generation capacity to 500 GWs and achieving circa 50% cumulative electric power-installed capacity from non-fossil fuel-based energy resources. India's environmental commitments on the global stage are now sharpening in focus, as businesses seek both domestic and international investment opportunities in energy transition.
In recent years the Indian government has made significant legislative reforms and investment in energy transition. The sector has also seen increasingly significant investment – both domestic and international – from the private sector.
— Ash Tiwari, Partner, London
The Indian Supreme Court's balancing act to conserve the Great Indian Bustard
The GIB has been facing a rapid and steady decline in its population, with the International Union for Conservation of Nature classifying the GIB as a critically endangered species in 2018.
In June 2019, a former Indian public official filed a public interest petition before the SC, claiming that the existential threat to the GIB was attributable to its frequent collisions with overhead power lines, constructed as part of large-scale private and public renewable energy infrastructure projects, particularly in the Indian states of Gujarat and Rajasthan.
By an order dated 19 April 2021 (2021 Order), the SC demarcated a large swathe of territory (approximately 99,000 square kilometres) as priority and potential GIB habitats. Additionally, the SC imposed restrictions on setting up new overhead transmission lines in the demarcated areas and appointed an expert committee to assess the feasibility of laying high-voltage underground power lines in these areas. For existing overhead power lines, the SC directed the Indian government to install bird diverters of an adequate standard, aimed at preventing GIB collisions.
The SC's response strikes a delicate balance between India's goal to pivot away from fossil fuel-based energy (and the international commitments it has made in that connection), and the need to protect and preserve the GIB.
— Ash Tiwari, Partner, London
Indian authorities and renewable energy companies make their case
In the months following the 2021 Order, several Indian authorities and renewable energy companies filed applications before the SC highlighting severe practical and financial difficulties in implementing the SC's directions. The applicants claimed that the areas in respect of which the directions were issued were significantly larger than the actual GIB habitat, and undergrounding of high-voltage power lines was not technically feasible in these areas.
Additionally, the applicants highlighted that since the demarcated areas contained significant solar and wind energy potential, the 2021 Order had vast negative ramifications for India's well-publicised international commitments to transition away from fossil fuels.
In March 2024, the SC noted the need to balance the interests of conserving the GIB with India's commitment to reduce emissions and move away from fossil fuel-based energy resources. By an order dated 21 March 2024, the SC restricted the undergrounding requirement under the 2021 Order to only the priority GIB areas (approximately 13,163 square kilometres), subject to feasibility to be determined by an expanded seven-member expert committee. The SC also modified the 2021 Order by easing the restrictions imposed by the 2021 Order in the potential GIB areas.2
The SC considered a number of practical factors to arrive at its decision, including the significant capital expenditure for renewable energy companies to meet the requirements of the 2021 Order, technical feasibility of undergrounding, environmental issues as a result of undergrounding, and the fact that several other factors may be responsible for the reduction in the population of the GIB.
—Debaditya Datta, Senior Associate, London
Balancing energy transition commitments with the need for conservation
In the 2024 Order, the SC underscored the importance of taking proactive measures to protect endangered species such as the GIB. At the same time, it recognised that there was no concrete basis to impose a general embargo on installation of transmission lines for the distribution of renewable energy (solar power, in particular).
Importantly, the SC recognised the intricate interface between the conservation of an endangered species such as the GIB, and the fundamental right to a healthy environment and to be free from the effects of climate change, which has been upheld by Indian courts time and again.3
As a signatory to various international conventions and agreements, including the United Nations Framework Convention on Climate Change and the Convention on Biological Diversity, India has pledged to uphold principles of environmental stewardship, biodiversity conservation and climate action on the global stage.
Further, and as discussed in the first article in this Spotlight on India series, we expect the new coalition government under Prime Minister Modi to continue to support large-scale infrastructure and renewable energy projects.
Given India's stated objectives of sustainable economic growth and reduced dependence on a carbon-based economy, companies can expect Prime Minister Modi's coalition government to implement and uphold policies that are favorable to renewable energy projects.
—Ash Tiwari, Partner, London
Solar energy stands out as a pivotal solution in India's transition towards cleaner energy sources - with vast solar energy potential of approximately 5,000 trillion kWh per year. Moreover, the geographical landscape of the states of Gujarat and Rajasthan, characterised by vast expanses of arid desert terrain and an abundance of sunlight, positions these regions as prime areas for solar power generation.
By harnessing this natural advantage, India would hope to not only reduce carbon emissions, but also promote social equity by improving energy access, foster economic growth, and create employment opportunities. Transitioning to renewable energy is therefore not just an environmental imperative, but also a strategic investment in India's future prosperity, resilience, and sustainability.
—Debaditya Datta, Senior Associate, London
Key takeaways
The outlook is positive: The 2024 Order will have significant positive impact on the renewable energy sector in India, including solar and wind generators located in the priority and potential demarcated areas that would otherwise have incurred significant capital expenditure and suffered revenue losses to comply with the 2021 Order. Easing of the restrictions, specifically in the potential area, should also facilitate early commissioning of renewable projects which had been delayed, or were left stranded, due to the restrictions placed under the 2021 Order.
The SC is taking a holistic and considered approach: Unlike the conventional notion of sustainable development, which often pits economic growth against environmental conservation, the SC's dilemma in the case of the GIB involved a more nuanced interplay between safeguarding biodiversity and mitigating the impact of climate change. It is encouraging to see the SC adopting a holistic approach to balance two equally crucial goals in a manner that does not sacrifice either objective at the altar of the other.
Footnotes:
1. 2024 INSC 280.
2. As things stand, the SC has directed the expert committee to submit a report to the SC by 31 July 2024 and the matter is listed for hearing in the second week of August 2024.
3. M.C. Mehta v. Kamal Nath (2000) 6 SCC 213; Virender Gaur v. State of Haryana (1995) 2 SCC 577; Karnataka Industrial Areas Development Board v. C. Kenchappa (2006) 6 SCC 371.
This article is being provided as general information and does not constitute legal advice. Baker & McKenzie does not practice Indian law and where Indian law advice is needed, we work closely with top India-qualified lawyers. We’d be happy to discuss your needs in India. For more information, please contact Ashok Lalwani and Mini vandePol.
