CERC Notifies Key Waivers and Transmission Reforms to Boost Renewable and Storage Projects

Introduction

The Central Electricity Regulatory Commission (CERC) has introduced transformative policy measures through the fourth amendment to the Sharing of Inter-State Transmission Charges and Losses Regulations, 2020¹. The amendment establishes extensive waiver frameworks and technical reforms that strategically leverage financial incentives to support India’s clean energy transition objectives.

Explanation (Key Points)

• The amendment imposes new definitions for “Tariff Regulations” and “Terminal Bay” to make them more understandable for regulatory purposes.
• Regulation 9 amends transmission charge sharing by mandating that entities that are within the control area of a state but not within its distribution licensees are to pay charges based on their General Network Access (GNA). The amendment ensures more fair cost apportionment based on real network usage rather than arbitrary frontier.
• The amendment details transmission deviation calculations for generators connected to inter-state and intra-state grids. The calculations include net metered injection over permitted GNA and STU access, which is coordinated by STU, NLDC, and CTU. The provision stops double charging and ensures equitable treatment for composite grid connections to multiple networks.
• Amendment Regulation 13 offers substantial waivers to renewable energy generating stations (REGS), hybrid stations (RHGS), and energy storage systems (ESS). Wind and solar projects can get 100% waivers of transmission charges if they are commissioned by June 30, 2025. Waiver percentages are reduced for projects commissioned until June 2028, and no waivers thereafter, encouraging timely project development.
• Hydro-based pumped schemes are exempted for 25 years if the project commences construction prior to June 2028. This is in appreciation of their critical role in grid stability and renewable integration as being at the core of balancing of intermittent generation.
• Battery storage systems have graduated waiver programs depending on their renewable source interconnections and commissioning dates. Systems supplied from co-located renewables have been granted full waivers, while grid-connected systems have been granted decreasing waiver percentages in the future. This encourages direct renewable-storage integration but continues to incentivize grid-connected systems.
• Hydropower projects are given 18-year exemptions from entering commercial operation based on when the contracts were executed. It promotes hydroelectric development, considering the lengthy project lead times.
• The amendment is focusing on technology segments with green hydrogen/ammonia and offshore wind projects with 100% to 0% waivers depending on commissioning years with complete benefits to projects commissioned from prior to 2033 and 2034. This is consistent with India’s green economy and decarbonization objectives with the promotion of next-generation clean energy technologies.
• Waiver extension provisions permit up to six-month extension waivers twice for force majeure delays, i.e., transmission unavailability. Agencies such as MNRE or CERC committees may permit extensions subject to the PPA framework. This method recognizes unexpected delays in infrastructure projects with extension caps in place.
• Compliance ensures the integrity of the waiver system with verification. ESS projects are required to obtain 51% of charging power from renewable sources to be eligible for waivers, starting with self-declaration and periodic NLDC verification. The system ensures the renewable energy focus with realistic implementation.
• The amendment requires project developers to pay a yearly fee for unused transmission capacity when terminal bays are vacant but projects are not running. This provides equitable cost allocation and prevents permanent reservation of capacity without generation.

Conclusion

CERC’s fourth amendment to transmission charge regulations represents a comprehensive policy transformation that strategically uses financial incentives to accelerate India’s clean energy deployment while maintaining grid stability and cost discipline.

The extensive waiver framework for renewable energy and storage projects, combined with technical clarifications for complex grid connections, creates a supportive environment for clean energy investment while ensuring fair cost allocation across all grid users.