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Risks in electricity contracts

Author

Listed:
  • Chitrakshi Jain

    (TrustBridge Rule of Law Foundation)

  • Akshay Jaitly

    (TrustBridge Rule of Law Foundation)

Abstract

This paper empirically studies how India's Central Electricity Regulatory Commission adjudicates force majeure disputes in electricity contracts. We examine 52 orders covering 77 party-level observations between 2018-2023. We find that solar generators bring the most claims, and that parties typically litigate during the pre-commissioning phase seeking extensions of time. We find that foreseeable risks like bureaucratic delay and grid or transmission constraints are frequently cited as the events for which such extensions are sought. The Commission rejected 56 of the 77 claims from our dataset. A significant share of rejections emanate from connectivity and transmission agreements, indicating a gap in how interdependent contracts are designed in the sector. Our findings indicate that force majeure litigation in the electricity sector is a result of insufficient appraisal of risks.

Suggested Citation

  • Chitrakshi Jain & Akshay Jaitly, 2026. "Risks in electricity contracts," Working Papers 22, Trustbridge Rule of Law Foundation.
    • Handle: RePEc:bjd:wpaper:22
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    References listed on IDEAS

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    5. Nicholas Ryan, 2020. "Contract Enforcement and Productive Efficiency: Evidence From the Bidding and Renegotiation of Power Contracts in India," Econometrica, Econometric Society, vol. 88(2), pages 383-424, March.
    6. Karolina Kapral & Kobe Soetaert & Rui Castro, 2024. "An Off-Site Power Purchase Agreement (PPA) as a Tool to Protect against Electricity Price Spikes: Developing a Framework for Risk Assessment and Mitigation," Energies, MDPI, vol. 17(9), pages 1-19, April.
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