Gujarat moves to regulate demand flexibility and ancillary services
The Gujarat Electricity Regulatory Commission (GERC) has initiated the process for framing the Gujarat Electricity Regulatory Commission (Ancillary Services and Demand Flexibility) Regulations, 2026, with the issuance of a Request for Proposal (RFP) for the appointment of a consultant.
Issued on July 16, 2026, the RFP marks the formal beginning of efforts to establish an intra-state regulatory framework for ancillary services and demand-side flexibility in Gujarat, as power systems increasingly accommodate higher shares of renewable energy.
Regulatory framework
GERC is seeking a multi-disciplinary consultancy firm with experience in the Indian power sector and regulatory framework to assist in drafting the regulations and supporting documents.
The proposed framework will address the identification, procurement, scheduling, dispatch, monitoring and settlement of ancillary services. It will also establish provisions for demand flexibility and demand response at the state level.
The regulations are expected to align with the Central Electricity Regulatory Commission (CERC) (Ancillary Services) Regulations, 2022, the Indian Electricity Grid Code (IEGC), 2023, and the CERC (Deviation Settlement Mechanism) Regulations, 2022, while incorporating Gujarat-specific requirements.
In addition, the framework will define the roles, responsibilities and obligations of the State Load Despatch Centre (SLDC), distribution licensees, generators, prosumers, consumers, service providers and aggregators participating in ancillary service and demand response programmes.
Scope of work
Under the assignment, the selected consultant will be required to examine existing central regulations and assess regulatory approaches adopted by other states.
The scope also includes evaluating available and potential resources that could participate in ancillary service and demand flexibility markets. These include thermal, hydro and gas-based generating stations, pumped storage projects, Battery Energy Storage Systems (BESS) and flexible consumer loads.
Based on these assessments, the consultant will prepare a concept paper, draft regulations and a Statement of Reasons (SoR), incorporating stakeholder feedback received during the public consultation process.
GERC has indicated that the regulations should provide a transparent commercial and settlement framework that remains cost-reflective and least-cost to consumers while enabling reliable grid operations.
Policy context
The initiative follows directions issued by the Ministry of Power in a communication dated December 2, 2025, to the Forum of Regulators and State Electricity Regulatory Commissions regarding the formulation of demand flexibility regulations.
The ministry had highlighted the need for state-level frameworks to facilitate demand response while ensuring that such mechanisms do not undermine investments in firm and flexible generation capacity required to meet rising electricity demand.
The move also reflects the growing need for flexible grid operations as renewable energy penetration increases across the country.
Timeline
GERC has specified a project timeline of three months from the date of issuance of the Letter of Award. Deliverables have been structured across four milestones.
The consultant will be selected through the Quality and Cost Based Selection (QCBS) method, with technical proposals carrying a weightage of 70% and financial proposals accounting for the remaining 30%.
The last date for submission of bids is July 31, 2026.
Once notified, the regulations will establish Gujarat’s first dedicated framework for intra-state ancillary services and demand flexibility, an area that has so far remained largely outside the scope of state-level regulation.
The featured photograph is for representation only.
