---
title: "Maharashtra Introduces Draft Demand Flexibility Regulations Framework 2024 To Enhance Grid Efficiency And Support Renewable Energy"
date: 2024-10-07
author: "King Stubb & Kasiva"
url: https://ksandk.com/newsletter/maharashtra-draft-demand-flexibility-2024/
---

# Maharashtra Introduces Draft Demand Flexibility Regulations Framework 2024 To Enhance Grid Efficiency And Support Renewable Energy

Posted On - 7 October, 2024 • By - King Stubb & Kasiva

## Introduction

The Maharashtra Electricity Regulatory Commission (MERC) has proposed a new set of regulations titled “Draft MERC (Demand Flexibility and Demand Side Management – Implementation Framework, Cost-effectiveness Assessment; and Evaluation, Measurement and Verification) Regulations, 2024”.[[1]](#_ftn1) These regulations aim to improve grid efficiency and support the growing integration of renewable energy sources in the state.  

## Explanation (key points)

- **Background**
  - **MERC’s previous regulations:** The MERC previously issued Demand Side Management (DSM) Regulations in 2010, focusing on energy conservation and load management.
  - **Maharashtra’s leadership in renewable energy:** Maharashtra has been a leader in promoting renewable energy through feed-in tariffs and portfolio obligations.
  - **Need for a more flexible grid:** The increasing use of renewable energy sources like solar requires a more flexible grid that can adapt to fluctuating generation patterns.
- **Need for New Regulations**
  - **Changing energy landscape:** The changing energy landscape with distributed generation and emphasis on solarization necessitates a shift from DSM to Demand Flexibility (DF) programs.
  - **DF supports the integration of renewables:** DF allows loads to adjust based on real-time generation, supporting the integration of renewables.
  - **Comprehensive framework:** The new regulations propose a single, comprehensive framework encompassing DF, DSM, and evaluation aspects.
- **Key Features**
  - **Demand Flexibility Portfolio Obligation (DFPO):** Distribution licensees will have a cascaded target to achieve a specific percentage of flexible demand compared to the peak demand (3% in year 1, increasing to 7% by year 5).
  - **Incentives and Disincentives:**
    - Distribution companies will receive incentives for exceeding DFPO targets and face disincentives for underachievement.
  - **DF/DSM Consultation Committee:**
    - A committee of experts will review DF/DSM program proposals from licensees and make recommendations to the Commission.
  - **Technological Interventions:**
    - The regulations recognize Electric Vehicles (EVs) and other technologies like thermal energy storage and heat pumps as potential sources of demand flexibility.
  - **Cost-effectiveness Assessment:**
    - Existing cost-effectiveness tests from the 2010 regulations are retained.
    - The framework considers potential revenue streams from ancillary services offered by flexible demand resources.
- **Evaluation, Measurement and Verification (EM&V)**
  - **Three types of evaluations:** The regulations introduce three types of evaluations for DF/DSM programs: process, impact, and market effectiveness.
  - **Independent verification agencies:** Independent verification agencies with relevant expertise can be appointed by licensees to conduct these evaluations.

## Conclusion

The Maharashtra Draft Demand Flexibility Regulations Framework 2024 represents a crucial leap towards a more modern and efficient power grid. By promoting demand flexibility and integrating renewable energy sources, these regulations can contribute to a more sustainable and reliable electricity system for the state.

---

[[1]](#_ftnref1) [https://merc.gov.in/wp-content/uploads/2024/08/EM_Demand-Flexibility-DSM-Regulations-2024-2.pdf](https://merc.gov.in/wp-content/uploads/2024/08/EM_Demand-Flexibility-DSM-Regulations-2024-2.pdf)

---

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