Tighter grid rules may hit India’s renewable energy profits

11 Nov 2025 CW Team

The Central Electricity Regulatory Commission (CERC), in its draft issued in September 2025, has proposed tighter regulations for wind and solar power producers under the Deviation Settlement Mechanism (DSM). The new framework aims to gradually narrow the permissible deviation between the power producers promise to supply and what they actually generate.

From April 2026, the formula for calculating these deviations will be revised, with tolerance limits shrinking each year until 2031 — when renewable generators will be treated on par with conventional power plants. The move is designed to improve forecasting and scheduling accuracy, ensuring greater reliability and stability in India’s expanding renewable energy grid.

Industry Concerns

Industry groups have cautioned that the proposed rules could disproportionately affect wind projects, whose generation depends heavily on unpredictable weather patterns, unlike solar, coal, or gas-fired plants that can regulate output.

“These penalties could cause huge losses, especially for older projects that were built under different rules,” said the Wind Independent Power Producers Association (WIPPA) in a letter to the CERC. The group estimated that some wind projects could lose up to 48 per cent of their revenue under the new mechanism.

Earlier this year, WIPPA challenged the 2024 deviation regulations in court, arguing that the proposed changes would impose a significant financial burden on developers.

The National Solar Energy Federation of India (NSEFI) also warned in its submission that stricter deviation limits could undermine project viability and discourage future investment in clean energy.

Policy Context

India aims to double its non-fossil-based power capacity to 500 gigawatts as part of its broader energy transition strategy. While the government seeks to improve grid discipline and forecasting accuracy, renewable developers say such measures must be balanced to avoid discouraging growth in a sector critical to meeting national climate goals.

India’s proposed rules requiring renewable energy producers to strictly match their committed supply to actual generation could hurt company earnings and slow new investments, according to industry submissions reviewed on Wednesday. The Central Electricity Regulatory Commission (CERC), in its draft issued in September 2025, has proposed tighter regulations for wind and solar power producers under the Deviation Settlement Mechanism (DSM). The new framework aims to gradually narrow the permissible deviation between the power producers promise to supply and what they actually generate. From April 2026, the formula for calculating these deviations will be revised, with tolerance limits shrinking each year until 2031 — when renewable generators will be treated on par with conventional power plants. The move is designed to improve forecasting and scheduling accuracy, ensuring greater reliability and stability in India’s expanding renewable energy grid. Industry Concerns Industry groups have cautioned that the proposed rules could disproportionately affect wind projects, whose generation depends heavily on unpredictable weather patterns, unlike solar, coal, or gas-fired plants that can regulate output. “These penalties could cause huge losses, especially for older projects that were built under different rules,” said the Wind Independent Power Producers Association (WIPPA) in a letter to the CERC. The group estimated that some wind projects could lose up to 48 per cent of their revenue under the new mechanism. Earlier this year, WIPPA challenged the 2024 deviation regulations in court, arguing that the proposed changes would impose a significant financial burden on developers. The National Solar Energy Federation of India (NSEFI) also warned in its submission that stricter deviation limits could undermine project viability and discourage future investment in clean energy. Policy Context India aims to double its non-fossil-based power capacity to 500 gigawatts as part of its broader energy transition strategy. While the government seeks to improve grid discipline and forecasting accuracy, renewable developers say such measures must be balanced to avoid discouraging growth in a sector critical to meeting national climate goals.

Infrastructure Energy

23 Dec 2025

Delhi HC Stays PGCIL Order against KEC International

KEC International has informed stock exchanges of a significant legal development concerning its eligibility to participate in tenders floated by Power Grid Corporation of India (PGCIL), in a disclosure made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations.The update follows the company’s earlier intimation dated November 18, 2025, regarding an order issued by PGCIL that excluded KEC International from participating in its tenders for a period of nine months. Challenging the said order, the company filed a writ petition before the Hon’ble High C..

Building Material

23 Dec 2025

LANXESS Advances Pigment Solutions for New-Age Concrete Technologies

LANXESS is deepening its engagement with next-generation concrete technologies by advancing research into the performance of iron oxide pigments across emerging construction applications, including self-compacting concrete (SCC), geopolymers and 3D-printed concrete. Through extensive investigations and long-term weathering tests, iron oxide pigments have proven their suitability for a wide range of concrete construction materials, though their use in new formulations requires a thorough understanding of construction chemistry and material interactions.According to Oliver Fleschentraeger, Techn..

Infrastructure Urban

23 Dec 2025

JHS Svendgaard to Invest Rs 250 Million in Kala Amb Expansion

JHS Svendgaard Laboratories (JHS), a leading Indian manufacturer of oral care products, has announced an investment of Rs 250 million to expand its manufacturing footprint in Kala Amb, Himachal Pradesh. The investment is aimed at strengthening production capacity, introducing advanced technologies and supporting the company’s next phase of growth in response to rising domestic and global demand.As part of the expansion plan, JHS will construct a new 100,000 sq ft manufacturing facility on its existing five-acre land parcel at Kala Amb. The project is expected to be executed over a two-year p..