Microgrids are frequently positioned as a technical solution to decarbonisation and resilience. In reality, their success or failure is often determined long before construction begins. The decisive factor is regulatory design.
Aditi M. Tulpule, founder and director of 4D Energy Advisory, has spent more than 16 years at the intersection of energy innovation and regulatory compliance. With senior advisory and legal roles spanning Ofgem, Elexon, and leading international law practices in London, she has seen firsthand how promising decentralized energy projects can falter when regulatory strategy is treated as an afterthought.
“Microgrid deployment isn’t just about technology,” Tulpule explains. “It’s about strategic navigation of a complex regulatory environment.”
Drawing on her experience advising energy companies on decentralized electricity networks, she highlights three core strategies that materially improve the likelihood of success.
Master the License Exemption Landscape
Many microgrid projects rely on non-traditional delivery models such as private wire networks, campus systems, or community-led schemes. These structures can unlock flexibility and cost efficiency, but they also introduce regulatory complexity.
“One of the most powerful tools available is the use of license-exempt distribution frameworks,” Tulpule says. “But these come with limitations.”
License exemptions are not blanket permissions. They apply under specific conditions, often defined by geographic boundaries, ownership models, and the way electricity is supplied and resold. A misinterpretation can expose developers to enforcement risk or require costly restructuring after capital has already been deployed.
Through 4D Energy Advisory, Tulpule has helped clients avoid unnecessary licensing costs by aligning commercial models carefully within the scope of existing exemptions while maintaining full compliance. The critical step is early analysis. It’s understanding exactly when exemptions apply and structuring the project to remain within those parameters.
“The commercial model and regulatory position must be designed together,” she notes. “If you separate them, you create risk.”
Anticipate Grid Interaction and Flexibility Requirements
Microgrids are not isolated systems. “Microgrids aren’t just about distributing energy,” Tulpule explains. “They are about dynamic interaction with the wider system.”
Alignment with grid codes, balancing mechanisms, and metering requirements is essential to capturing revenue and ensuring long-term viability. Recent reforms, including BSC modification P375, which Tulpule helped draft, and P455, have reshaped how boundary metering operates and how behind-the-meter assets can participate in markets.
These changes are not merely technical adjustments. They directly influence how revenue flows are structured and how assets qualify for market access.
“Understanding evolving grid and balancing rules is critical,” she says. “If you do not design for market participation from the outset, you may find it difficult or costly to retrofit later.”
Forward-looking regulatory analysis enables developers to build flexibility into their projects, positioning them to respond as market frameworks continue to evolve.
Integrate Legal, Commercial, and Technical Design Early
The most common reason microgrid projects struggle is fragmentation across disciplines. Technical teams optimize engineering performance. Too often, technical teams, commercial teams and legal advisors operate sequentially rather than collaboratively.
“Microgrid projects frequently fail not because of technical limitations,” Tulpule observes, “but because the legal and regulatory frameworks were not integrated into the design from day one.”
True bankability requires alignment across power purchase agreements, land rights, asset ownership models, and regulatory obligations. Decisions about who owns the wires, who supplies electricity, and how energy is resold can directly affect licensing status and compliance exposure.
When these elements are coordinated early, projects move more smoothly through financing, due diligence, and operational launch. This integrated approach, Tulpule argues, is what enables scalable and bankable microgrid infrastructure.
From Compliance to Competitive Advantage
Microgrids are regulatory constructs as much as they are engineering systems. Treating compliance as a final checklist item is a strategic error.
“If you build your projects with the right legal and commercial scaffolding from the start,” Tulpule says, “you unlock not just compliance, but long-term value.”
In an energy landscape defined by decentralization, flexibility, and rapid regulatory change, those who engage with the framework early gain a material advantage. Microgrid deployment, in that sense, is less about navigating around regulation and more about designing within it.
For those willing to approach it strategically, the regulatory environment becomes not a barrier, but a blueprint for durable growth.
Connect with Aditi M. Tulpule on LinkedIn for more insights.
