CERC proposes transmission charge relief for delayed renewable projects
The Central Electricity Regulatory Commission (CERC) has proposed relief on interstate transmission charges for renewable energy (RE) projects that have faced commissioning delays, partially rolling back an earlier phase-out schedule.
India had begun phasing out the long-standing waiver on Interstate Transmission System (ISTS) charges for new solar, wind, and hybrid projects starting from July 2025, replacing a full waiver with a staggered, reducing scale of relief for later-commissioned projects.
The proposed relief responds to industry representations that project delays (e.g., due to equipment supply, land, or grid-connectivity bottlenecks) should not automatically disqualify otherwise-compliant projects from the waiver benefit.
The move would apply to specific categories of delayed projects rather than reinstating the waiver universally, preserving the overall glide-path toward full ISTS charges by the end of the decade.
The proposal is now open for stakeholder comment before CERC finalizes the amended regulation.
1. CERC's statutory mandate under the Electricity Act, 2003 The Central Electricity Regulatory Commission is a statutory quasi-judicial body constituted under the Electricity Act, 2003, responsible for regulating tariffs for generating companies with interstate operations and for interstate transmission of electricity. It exercises two distinct kinds of power: regulation-making powers under Section 178 (covering matters like transmission tariff methodology and charge-sharing) and adjudicatory/order-making powers under Section 79 (covering specific disputes and grant of relief, including in situations not explicitly covered by existing regulations). This dual role — rule-maker and adjudicator — is a frequently tested Mains point on the design of India's independent sectoral regulators.
2. The ISTS waiver policy and its 2025 phase-out To incentivize interstate renewable energy trade, the government had granted a 100% waiver on Inter-State Transmission System charges and losses for solar, wind, and hybrid RE projects, provided they were commissioned by a cut-off date. Under the CERC (Sharing of Inter-State Transmission Charges and Losses) Fourth Amendment Regulations, 2025 (notified June 26, 2025), the 100% waiver continues to apply to projects commissioned by June 30, 2025, after which the waiver reduces progressively for later-commissioned projects, with no exemption available for projects commissioned after 2028. The regulations also permit up to two commissioning-date extensions of up to six months each, meaning a project could still qualify for the full waiver if commissioned as late as June 30, 2026 — the specific provision the current relief proposal appears to build upon.
3. Link to India's 500 GW non-fossil capacity target and NDC The ISTS waiver has been one of several fiscal/regulatory incentives (alongside benefits for green hydrogen and offshore wind) supporting India's target of 500 GW of installed non-fossil fuel electricity capacity by 2030, a goal announced at COP26 (2021) and linked to India's Nationally Determined Contribution (NDC) under the Paris Agreement, which commits to 50% of cumulative installed electric capacity from non-fossil sources by 2030. India reached this 50% non-fossil-capacity milestone in June 2025, more than five years ahead of the NDC deadline, underscoring why regulators are cautious about withdrawing support too abruptly even as the formal ISTS waiver phase-out proceeds.
4. Centre-state regulatory architecture in the power sector CERC's jurisdiction is confined to interstate transmission and generation with interstate sale, while State Electricity Regulatory Commissions (SERCs), also constituted under the Electricity Act, 2003, regulate intrastate tariffs and distribution licensing. This bifurcated structure — mirroring India's broader federal division of subjects, since electricity is a Concurrent List subject (List III, Entry 38) — is a recurring Prelims angle connecting energy policy to constitutional federalism.
- CERC (Sharing of Inter-State Transmission Charges and Losses) Fourth Amendment Regulations, 2025 were notified on June 26, 2025.
- 100% ISTS charge waiver applies to RE (solar/wind/hybrid) projects commissioned by June 30, 2025; waiver reduces progressively thereafter, with no exemption for projects commissioned after 2028.
- Up to two commissioning extensions of up to 6 months each are permitted, potentially extending full-waiver eligibility to projects commissioned by June 30, 2026.
- India's non-fossil fuel target: 500 GW of installed capacity by 2030 (announced at COP26, 2021); NDC commitment is 50% of cumulative installed capacity from non-fossil sources by 2030.
- India crossed the 50% non-fossil installed capacity milestone in June 2025, over five years ahead of the 2030 NDC deadline.
- CERC's regulation-making power derives from Section 178 and its adjudicatory power from Section 79 of the Electricity Act, 2003.