CERC’s proposed deviation rules may impact renewable project profitability

The Central Electricity Regulatory Commission (CERC) released the draft in September 2025, proposing tighter controls under the Deviation Settlement Mechanism for wind and solar producers. The framework aims to narrow the gap between scheduled and actual generation, with a revised calculation method taking effect in April 2026. The tolerance margin would then decrease each year until 2031, aligning renewable projects with conventional plants in terms of grid discipline.

The initiative seeks to improve forecasting and scheduling accuracy as renewables expand their share in India’s power mix. However, the rules could disproportionately affect wind energy producers due to the variable nature of wind patterns, according to industry feedback cited by Reuters.

The Wind Independent Power Producers Association has said the proposed penalties could cause significant financial losses, particularly for older projects built under earlier regulatory frameworks. The association estimated potential revenue losses of up to 48% for some wind projects and noted that it had already filed a legal challenge in April 2025 against earlier deviation-related regulations.

The National Solar Energy Federation of India also raised concerns, warning that the new rules could threaten project viability and discourage further investment in the country’s renewable energy sector.