CERC Brings Future Wind-Solar Sellers Under General Seller Deviation Rules

The Central Electricity Regulatory Commission (CERC) has approved the Central Electricity Regulatory Commission (Deviation Settlement Mechanism and Related Matters) (Third Amendment) Regulations, 2026, bringing specified future Wind Solar (WS) Sellers under the deviation charge framework applicable to General Sellers and prescribing separate provisions for standalone energy storage systems.

The amended regulations came into force on August 31, 2026. Under the new framework, Wind-Solar (WS) Sellers will face deviation charges at par with General Sellers for future projects. For bidding based projects, the provision will apply to tenders or bids submitted on or after January 1, 2027, while for other projects, it will apply to those achieving commercial operation date (COD) on or after January 1, 2029.

CERC said that the change has been introduced in view of the increasing penetration of renewable energy and the need for greater scheduling discipline. The Commission noted that renewable energy accounted for 51.5 percent of the electricity generation mix on July 29, 2025.

The Commission observed that the existing regulatory framework had provided WS Sellers with certain relaxations for more than a decade, including a relaxed treatment of deviations, a tolerance band and non linkage of deviation charges with grid frequency. It said that the growth of wind and solar capacity, improvements in forecasting and scheduling, and the increasing use of hybrid projects and energy storage have changed the operating environment.

CERC said that the revised treatment has been made applicable prospectively so that developers of future projects can factor deviation related obligations into project bidding, financing and commercial arrangements. The Commission also noted that aggregation of renewable generation can reduce variability and that storage based and hybrid renewable energy projects can provide greater flexibility in meeting schedules.

The Commission did not accept requests from several stakeholders to defer the revised treatment until 2030 or later. It also rejected proposals to limit the provision to firm and dispatchable renewable energy projects or renewable energy projects integrated with storage.

At the same time, CERC retained the existing methodology for determining the Contract Rate and Reference Charge Rate. The draft amendment had proposed replacing the time block wise weighted average Area Clearing Price (ACP) of the Integrated Day Ahead Market (I-DAM) with a daily weighted average ACP.

After considering stakeholder comments, CERC decided not to make the change. It held that the existing time block wise weighted average ACP better reflects variations in the value of electricity across different time blocks and provides appropriate economic signals for scheduling and balancing.

The amendment also specifies the treatment of deviation charges for a standalone Energy Storage System (ESS) that is a pumped hydro storage plant under Section 62 of the Electricity Act, 2003. For such plants, deviation charges will be based on the Energy Charge Rate (ECR) specified under Regulation 66(3) of the CERC Tariff Regulations, 2024. The provision applies to both the generation and pumping modes.

CERC said that a standalone pumped hydro storage plant under Section 62 does not have a Contract Rate or Reference Charge Rate in the same manner as other generating entities. Its annual fixed charges are recovered through capacity or fixed charges, while the charging energy is arranged by the beneficiaries. The Commission therefore considered the ECR under the Tariff Regulations to be the appropriate basis for deviation charges.

For standalone ESS, the amendment also provides for the treatment of infirm power injected from first synchronisation until successful completion of the trial run. Such power will be paid for at the Normal Rate of Charges for Deviations applicable for the respective time block, subject to a ceiling of ₹2 per kWh.

Stakeholders had sought a higher ceiling, citing the cost of energy consumed during testing and losses during the trial operation of storage systems. CERC retained the INR 2 per kWh ceiling, stating that infirm power injection during ESS testing is generally occasional and that the provision needs to balance compensation to ESS developers with the financial impact on the DSM pool.

On settlement payments, CERC has retained the statutory 10 day payment timeline. The amended provision also allows the timeline specified in the Detailed Procedure for the National Deviation and Ancillary Services Pool Account, once approved by the Commission, to be followed. The late payment surcharge remains 0.04 percent per day.

CERC further said that operational arrangements for handling WS Sellers covered under the existing and revised frameworks at pooling stations will be developed by Grid India and submitted to the Commission for approval before January 1, 2029.

The third amendment followed a consultation process in which CERC received 41 stakeholder submissions and held a public hearing on June 30, 2026. Stakeholders raised issues including the treatment of weather related deviations, forecasting and scheduling, deviation bands for battery storage systems, power procurement for deviation management, pooling arrangements and data standardisation.

CERC said that several of these suggestions were outside the scope of the present amendment and would require separate consideration.

The Commission said that the revised framework is intended to strengthen scheduling and balancing discipline as renewable energy assumes a larger role in the power system, while providing prospective regulatory clarity to future renewable and storage projects.