The electricity market was designed for a world that no longer exists: large, centralized power stations, passive consumers, clearly separated roles for generators, suppliers, and network operators. The architecture worked well for scale and reliability in an era when energy moved in one direction, and the roles of every participant were fixed and licensed. That era is over. Rooftop solar, batteries, electric vehicles (EVs), and private wire networks have fundamentally changed how energy flows, who produces it, and who has commercial rights over it.
Aditi M. Tulpule, Director of 4D Energy Advisory Limited and a regulatory and legal specialist with over 16 years of experience advising on electricity markets, smart grids, and decentralized energy projects, has spent her career helping developers, investors, and local authorities navigate the gap between the rules that exist and the world those rules were never designed for. “As decentralization accelerates, those who can navigate this complexity will be best placed to unlock value and drive innovation,” Tulpule observes.
The Architecture Has Not Caught Up With the Technology
Legacy market rules were built for centralized generation and passive consumption. They were not designed for prosumers, local storage, or two-way power flows, and yet those are precisely the assets now operating within the system. The result is a gap between what innovative commercial models require and what existing frameworks permit.
The practical questions this raises are: ‘In a multi-occupancy site with shared solar generation, who is the supplier?’ ‘How is the value from local flexibility or balancing services allocated between parties?’ ‘Where do regulatory exemptions apply, and where does a license become necessary?’ These are questions that determine whether a project is commercially viable, compliant, and investable, or quietly accumulates risk that surfaces only once construction is complete.
Understanding electricity market architecture today, Tulpule emphasizes, means understanding how legacy rules interact with innovative commercial models. Knowing how the system is supposed to work on paper is not sufficient. What matters is understanding where the friction points are and how to structure around them before they become problems.
Market Interfaces Are Where Value Is Won or Lost
The most critical and consistently underestimated element in decentralized energy projects is the design of market interfaces: meter configurations, boundary points, balancing responsibility, and access to flexibility and ancillary service markets. When these interfaces are poorly designed, projects lose value or, worse, fall into compliance risk. When they are designed well, decentralized assets unlock revenue streams that were not visible at the outset, while remaining fully aligned with the regulatory framework.
This is precisely where legal, regulatory, and commercial thinking must converge early in the project design process, not late. “Engage with market architecture early,” Tulpule advises plainly. Retrofitting compliance into a project that was structured without it is significantly more costly than building it in from the beginning, both in time and in the value that gets left behind.
Think in Three Layers
Tulpule’s practical framework for clients approaching electricity market architecture is to think in three distinct but interdependent layers:
1. The physical layer is how electricity actually flows.
2. The commercial layer is who gets paid and for what.
3. The regulatory layer is what is permitted, what is exempt, and what requires a license.
When these three layers are aligned, decentralized projects become investable, scalable, and compliant. When they are not, complexity and risk multiply quickly, and the project loses momentum at precisely the moments when it needs to move.
Treating compliance as a constraint rather than an enabler is the mistake that costs projects the most. Regulatory frameworks in decentralized energy are genuinely complex, but they also contain exemptions, flexibilities, and commercial structures that reward those who understand them early. The developers and investors who build that understanding into project design from day one are the ones who reach financial close faster and extract the full value of what they have built.
Follow Aditi M. Tulpule on LinkedIn or visit 4D Energy Advisory Limited for more insights on electricity market regulation, decentralized energy project structuring, and navigating the legal and commercial frameworks that determine project viability.
