MNRE Urges Power Regulator to Delay Stricter Rules for Renewable Energy Producers—Here’s Why

The Ministry of New and Renewable Energy (MNRE) has urged the power regulator, Central Electricity Regulatory Commission (CERC), to postpone plans for stricter rules requiring wind and solar producers to stick more closely to their grid supply commitments. These rules were scheduled to come into effect from April 2026, the ministry said, reported Reuters.

In a draft published in September, CERC proposed tighter regulations for wind and solar power producers under the Deviation Settlement Mechanism (DSM), which would reduce the permitted discrepancy between the electricity that renewable energy producers promise to supply and what they actually produce.

However, the renewable energy ministry said in an October 21 letter to the CERC that forecasting errors for renewable plants were largely driven by unpredictable weather conditions which is beyond the control of renewables generators, making penalties for deviations "imprudent".

The ministry also warned that imposing such strict rules and penalties could undermine investor confidence, especially among small and medium firms and thus hurt the growth of clean energy projects.

The MNRE suggested alternatives such as mandating energy storage and using improved weather data for forecasting could prove as better alternatives instead of imposing strict penalties.

Storage Provides Grid Backup & Eases Risk

According to a report published by the Investment Information and Credit Rating Agency of India Limited(ICRA) on November 20, the share of power generation from renewable energy (including hydropower) is expected to rise from 22.1% in FY2025 to 35% by FY2030, supported by significant capacity additions. The government has also introduced viability gap funding for Battery Energy Storage System (BESS) and extended transmission-charge waivers for storage projects until 2028.

With renewable capacity expanding rapidly, experts believe that integrating BESS is essential to manage intermittency and stabilise the grid. The ICRA report also noted that storage will be vital for reliable supply as solar and wind output increases, helping prevent power shortfalls and smooth supply‑demand mismatches.

The International Energy Agency (IEA) has also emphasised in its report published in July 2021 that India’s rapidly rising share of variable renewable will require major upgrades in forecasting tools and grid flexibility.  

According to another report by Rystad Energy published in July 2025, India added a record 22 gigawatts (GW) of renewable energy capacity in the first half of 2025, marking a 57% increase from the 14.2 GW installed in the same period in 2024. The new capacity includes 18.4 GW of solar, 3.5 GW of wind and 250 megawatts (MW) of bioenergy. This rapid growth shows why India increasingly needs storage-supported grid to keep power supply stable and reliable.