CERC Draft Regulations 2026: Faster Trial Runs and BESS Rules to Streamline Renewable Energy Commissioning

The Central Electricity Regulatory Commission (CERC) has proposed key amendments in its draft electricity code. The new amendments introduce a series of changes to the Indian Electricity Grid Code to streamline the trial operation and commercial commissioning of renewable energy projects and battery energy storage systems (BESS).

The draft proposal covers changes related to solar and wind projects, standalone energy storage systems (ESS), pumped storage plants, power scheduling and grid congestion.

The key changes relate to:

● Notice Period Regulations: Shortening mandatory prior notice periods for trial operations from 7 days to 3 days.

● Capacity Thresholds: Setting minimum trial-run capacity rules (e.g., 50 MW threshold) for Battery Energy Storage Systems (BESS), solar, and wind installations.

●Phased Commissioning Framework: Standardizing regulatory rules for partial/phased commercial commissioning in flexible capacity instalments. 

From CRG, some of the perspectives that emerged are as follows:

1. The main challenge:

The Draft regulations propose reforms to streamline trial operations and commercial commissioning for renewable energy (RE), with standalone battery energy storage systems (BESS). One panellist noted that data centres, which demand enormous amounts of power at the gigawatt scale have introduced a new dimension to the power grid with attendant challenges for renewable energy. (RE) While India has developed an enormous capacity in RE but storage is inadequate, RE power is basically is available only for 8 hours. Achieving 24/7 Carbon-Free Energy (CFE) requires an enormous amount of storage. So therefore, there is a need for developing a commitment for Firm and Dispatchable Renewable Energy (FDRE) tendering to ensure supply of a certain amount of RE power around the clock. In other words, you should be able to get firm, clean, renewable energy at a reliable level round the clock. That would include the RE source, which is typically solar panels, and storage, which tends to be most often best battery electric storage systems.  So, this set of draft regulation aims to address some of the issues which were there, including the whole approval cycle.

2. The Problem with "Banking"

The panellist mentioned that we don't have many regulatory frameworks aggressively pushing toward 24/7 CFE. Instead, we have a mechanism called “banking” - which involves pushing out RE when generated and drawing it back later. Now banking is an accounting artifice. Because when you take it back in the night, it's probably not RE at all.  It is coal, but you're accounting for it as RE.

So, the push globally is towards hourly matching. And this banking system is also very unreliable because what happens is people go ahead and sign Power Purchase Agreements (PPAs). And then the banking rules are changed, and those PPAs get retrospectively hit.

A prominent example of this played out in court in the NSEF vs. MERC case in Maharashtra. MERC initially permitted 17 hours of banking per day for RE withdrawal. They later amended the rules to restrict RE withdrawal exclusively to 9:00 AM–5:00 PM—which made no sense. So, some players like AWS, data centre operators, Shree Cement, and other industrial players went to the High Court and sued and won, finally. All these players were seeking reliable 24/7 carbon-free energy through banked PPAs. So, this aims to address some of these issues, especially around BESS and integrating it.

3. Regulatory Breakthrough by CERC

Focussing on the steps taken by CERC, another panellist stated that he was particularly impressed by CERC for initiating these steps as it had not really been pushing for some of the reforms that that was necessarily needed for quite some time. It is just simply stalled. He further hoped that CERC will follow up with further deregulatory reforms, such as removing price caps on day-ahead electricity markets.

4. Grid Reliability & Hyperscale Threat

The Central Electricity Authority (CEA)—especially its demand projection team— has been very worried about data centres. Historically, companies like AWS operated mostly smaller facilities. They are ultimately stepping into the hyperscale category. So, Google in Vizag is setting up a one GW hyperscaler. Now, when one GW loads hit the grid, it's a completely different ball game on how to handle that.

The grid, for example, supplies power at a certain level - say it's an 11 kV with a tolerance of 5%. Now, the grid is used to minor fluctuations. But if that 5% thing tolerance is exceeded, then the data centre will switch to backup; release a 1 GW load from a grid, and the grid can collapse. The CEA is struggling to handle this combination of extremely low grid tolerance and massive, instantaneous power drops.