MNRE Urges CERC to Hold Back Stricter Deviation Rules for Renewables

Introduction

Towards the end of November, a notable development emerged in the renewable-energy regulatory space. The Ministry of New and Renewable Energy (MNRE) has asked the Central Electricity Regulatory Commission (CERC) to delay the roll-out of stricter deviation rules proposed for wind and solar projects. These provisions were to modify the Deviation Settlement Mechanism (DSM) from April 2026, tightening the gap between scheduled and actual generation. With India depending heavily on renewables to meet its 2030 targets, the ministry has cautioned that hasty implementation may do more harm than good.

Explanation

CERC’s draft regulations, issued in September, aim to make renewable generators more accountable for their scheduling accuracy. As renewable capacity expands, the grid operator has been vocal about the need for better forecasting to deal with variability. The proposed changes would gradually reduce the margin of error permitted for wind and solar developers, with financial consequences for frequent or large deviations.

MNRE, however, has taken a more cautious stance. In a letter sent to the regulator on 21 October, the ministry pointed out that forecasting errors in renewable projects are often the result of sudden weather shifts something even advanced models cannot fully anticipate. Holding generators financially responsible for such fluctuations, it argued, may not be reasonable or technically justified.

Industry concerns mirror this view. Several developers have warned that the draft framework, if enforced as is, could slow down new investments and disproportionately affect medium and smaller players. Many firms believe the penalties could raise compliance costs to a level that affects project viability. MNRE has echoed this apprehension, noting that the proposed rules may end up discouraging exactly the type of private investment India needs to accelerate its clean-energy build-out.

Instead of immediate implementation, the ministry has suggested a few alternatives.

• First, it has called for more extensive consultations to examine the likely financial impact on ongoing and upcoming projects.
• Second, it has proposed that storage requirements be built into future renewable projects, which would naturally improve scheduling accuracy.
• Third, MNRE has urged the regulator to rely on better, more granular weather data to determine realistic deviation limits.

The backdrop to this situation is India’s larger climate and energy plan. The country aims to reach 500 GW of non-fossil capacity by 2030. Achieving this requires regulatory certainty, predictable compliance costs, and an investment environment in which both large and small developers can operate with confidence. Any framework that inadvertently increases risk could push back commissioning timelines or shrink the pool of willing investors.

As of now, CERC has not announced a final decision or a revised schedule for the proposed DSM tightening.

Conclusion

The ministry’s intervention brings attention to an important balance that the power sector must maintain promoting grid discipline while ensuring that the growth of renewable energy is not stifled. CERC’s intention is to strengthen reliability, but MNRE’s response signals the need for a measured, practical approach that reflects the inherent unpredictability of wind and solar resources.

How the regulator responds whether through revised thresholds, new timelines, or storage-linked requirements will have a direct impact on future renewable investments. The coming months will likely determine how India manages intermittency and regulatory expectations while continuing its transition toward a cleaner power system.