Advancing Local Energy Markets in India: Policy Framework, Regulatory Barriers, and Sustainable Energy Transition

Neelam Baghel, Anil Kumar, K. Manjunath and Om Prakash

Wiley Interdisciplinary Reviews: Energy and Environment, 2025, vol. 14, issue 3

Abstract: Local Energy Markets (LEMs) have added global attention as a potential solution for transitioning to a decentralized and sustainable energy system. This article delves into the context of exploring the status, policy framework, and regulatory barriers related to grid stability, energy access, and environmental sustainability. Study extends to institutional and legal frameworks and issues surrounding stakeholder and consumer engagement. Execution of the Green Energy Open Access (GEOA) Rules in 2022 has been crucial in India, resulting in an incredible rise of 90.4% in annual installed capacity for both industrial and commercial customers within FY2023 and FY2024. Cumulative capacity has reached 18.7 gigawatts by the completion of FY2024. India has actively taken steps to diversify its energy balance, encourage renewable sources, and enhance energy efficiency by reducing the threshold for open access from 1 MW to 100 kW, enabling smaller companies to participate in energy trading. A coordinated strategy combining the federal and state governments, regulatory bodies, DISCOMs, and private parties is needed to overcome the obstacles. The Indian government has instigated various policies to ensure the sustainable development of the energy industry, demonstrating a commitment to reducing regulatory barriers to attracting investments and fostering sectoral growth. This study provides actionable advice for policymakers and regulators to address identified obstacles, expediting the transition toward a decentralized and sustainable energy future. This article is categorized under: Sustainable Energy > Other Renewables Energy and Power Systems > Electrification Policy and Economics > Regional and International Strategies

Date: 2025
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