India’s power sector regulator has drafted new rules that would extend transmission charge relief for renewable projects that have missed their commissioning deadlines, in a move that walks back an earlier decision to phase out such benefits. The Central Electricity Regulatory Commission (CERC) released the draft regulations on August 1, 2026, proposing to retain waivers on interstate transmission charges for solar, wind and hybrid projects that were delayed mainly because the transmission infrastructure needed to evacuate their power was not ready in time.
The proposal comes a little over a year after India began phasing out these waivers for new projects starting July 2025. That phase-out had unsettled developers who were already grappling with grid bottlenecks beyond their control, and the draft appears to respond directly to those concerns.
Why India Is Reconsidering Transmission Charges
Interstate transmission charges are fees levied on power generators for using the shared national grid to move electricity across state lines. Renewable energy developers in India have long received waivers on these charges as an incentive to build capacity quickly, since solar and wind projects typically need less lead time than conventional power plants but depend heavily on transmission lines being ready at the same pace.
The trouble is that transmission infrastructure has not always kept up. Reports over the past year have pointed to a growing pile of renewable capacity that is built or nearly built but cannot supply power because the lines connecting it to the grid are incomplete. Industry groups have flagged tens of gigawatts of such stranded capacity, much of it concentrated in solar-rich states like Rajasthan and Gujarat, where transmission works have lagged behind project timelines.
Against that backdrop, the government’s decision to start withdrawing transmission charge waivers from mid-2025 was seen by many developers as poorly timed, since it penalised projects for delays that were often not of their own making.
What the Draft Regulations Propose
Under the new draft, published for public feedback, CERC has proposed retaining the waiver for renewable energy projects that missed their commissioning timelines solely because interstate transmission capacity was unavailable. This relief would not apply broadly to every delayed project; it is designed for cases where the developer can show the delay traces back to transmission readiness rather than construction, financing or permitting issues on their own end.
To qualify, projects would need to have signed power sale agreements of at least seven years by December 31, 2026. This condition ties the relief to developers who have already secured long-term buyers for their electricity, rather than extending it to projects still searching for offtake arrangements.
The draft also proposes introducing the concept of a Renewable Energy Implementing Agency, aligning it with the General Network Access framework that governs how generators connect to the interstate grid. Alongside this, CERC has suggested reforms to how transmission deviations are calculated, which should make the system more predictable for developers planning their generation schedules.
Extending Benefits to Battery Storage
One of the more notable elements of the draft is the extension of transmission charge relief to battery energy storage systems that are co-located with renewable energy projects. As India leans more on storage to smooth out the variability of solar and wind generation, extending waiver benefits to these hybrid setups is meant to encourage developers to pair generation with storage rather than treating them as separate investments.
The draft specifies that battery storage charging its batteries using power from a co-located renewable project would continue to receive the applicable transmission charge waiver. Storage systems drawing power from other sources would be treated differently, falling under a separate category of the waiver framework. The National Load Despatch Centre has been tasked with working out the detailed procedures for tracking and accounting for these charging cycles.
CERC has also proposed letting energy storage systems that procure power through the Green Day Ahead Market count that electricity towards the prescribed renewable energy consumption requirement, subject to certification from the power exchange involved. A separate compliance mechanism has been suggested for hydro pumped storage projects.
What This Means for Renewable Energy Projects in India
For developers of renewable energy projects in India, the draft regulations offer a measure of certainty at a time when grid connectivity has become one of the biggest constraints on the country’s clean energy expansion. India has set a target of reaching 500 gigawatts of non-fossil fuel power capacity by 2030, and the government has separately announced a large investment programme to build out transmission infrastructure to support that goal.
Still, transmission construction takes time, and until those lines are completed, many projects will continue to depend on relief measures like the one proposed here to stay commercially viable. By tying the waiver to a firm deadline for signing power sale agreements, CERC appears to be trying to balance support for genuinely delayed projects against the risk of the relief becoming an open-ended concession.
The draft regulations are open for public comment, and CERC is expected to finalise the rules after reviewing stakeholder feedback. Given how closely the renewable energy industry has been tracking the transmission charge issue, the response from developers and industry associations is likely to shape the final version of the rules.
The Road Ahead
The proposed rules mark a partial reversal of India’s push to gradually reduce waivers for new renewable projects, reflecting the reality that transmission bottlenecks remain a persistent challenge even as the country accelerates its clean energy build-out. Whether the final regulations retain the current shape of the draft or are adjusted after public consultation, the broader signal is clear: transmission readiness, not just generation capacity, has become central to how India plans its renewable energy policy going forward.
Published in SouthAsianDesk, August 3rd, 2026
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