CERC proposes third DSM amendment covering wind-solar parity, storage and payment timelines
The Central Electricity Regulatory Commission (CERC) has issued a draft amendment to the Deviation Settlement Mechanism (DSM) and Related Matters Regulations, 2024, proposing changes related to wind-solar (WS) projects, standalone energy storage systems (ESS), and deviation charge payment timelines.
The draft Central Electricity Regulatory Commission (Deviation Settlement Mechanism and Related Matters) (Third Amendment) Regulations, 2026, are proposed to come into effect from July 1, 2026. The Commission has invited comments, suggestions and objections from stakeholders by June 26, 2026.
One of the proposed amendments revises the pricing reference used for calculating certain deviation charges. The existing reference to the “weighted average Area Clearing Price (ACP) of the Integrated-Day Ahead Market segments of all Power Exchanges for the respective time block” would be replaced with the “daily weighted average ACP of the Integrated-Day Ahead Market segments of all Power Exchanges for the day.”
The draft amendment also proposes that WS sellers be treated at par with general sellers for deviation charge calculations under specified timelines. The provision would apply to projects awarded through bidding routes where tender issuance or bid submission takes place on or after January 1, 2027. For other projects, the provision would apply to projects with commercial operation dates on or after January 1, 2029.
For standalone ESS operating as pumped hydro storage plants under Section 62 of the Electricity Act, 2003, the draft specifies that deviation charges would be computed based on the energy charge rate under Regulation 66(3) of the CERC (Terms and Conditions of Tariff) Regulations, 2024.
Another proposed insertion relates to infirm power injection from standalone ESS projects. Under the draft provision, power injected from the date of first synchronisation until successful completion of trial runs would be paid at the normal rate of deviation charges for each time block, subject to a ceiling of Rs 2.00/kWh.
The Commission has also proposed revisions to payment timelines for deviation charges. Instead of the existing fixed timeline of 10 days, payments would follow timelines prescribed under the Detailed Procedure for implementation, maintenance and operation of the National Deviation and Ancillary Services Pool Account.
The principal DSM regulations were originally notified on August 21, 2024. This was followed by the First Amendment on December 24, 2024, and the Second Amendment on June 25, 2025. The latest draft amendment dated May 26, 2026, represents the third set of proposed changes to the regulatory framework.
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