India's tighter green power rules may hit clean energy investments, industry letters show

Economic Times
Economic Times
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India's Central Electricity Regulatory Commission introduced stricter rules for renewable energy producers, requiring adherence to power supply commitments. This could deter investments in clean energy as penalties for deviations increase annually until 2031.
India's tighter green power rules may hit clean energy investments, industry letters show
A What happened
The Central Electricity Regulatory Commission (CERC) of India has announced tighter regulations for renewable energy producers, mandating that they meet their promised power supply to the grid. These new rules, set to take effect in April 2026, will progressively tighten the permissible deviation margins until 2031, aligning renewable energy producers with conventional power plants in terms of accountability. Industry groups, particularly those representing wind energy, have expressed concerns that these regulations could lead to significant financial losses, especially for older projects built under previous rules. The Wind Independent Power Producers Association estimates that some wind projects could face revenue losses of up to 48%. Additionally, the National Solar Energy Federation of India has cautioned that the new framework could undermine the viability of projects and deter future investments, posing a challenge to India's goal of doubling its non-fossil power capacity to 500 gigawatts as part of its energy transition strategy.

Key insights

  • 1

    Increased Penalties

    Penalties for deviations from power supply commitments will rise annually until 2031.

  • 2

    Impact on Wind Energy

    Wind energy projects may face significant revenue losses due to stricter regulations.

  • 3

    Investment Deterrence

    New rules could deter future investments in India's renewable energy sector.

Takeaways

The CERC's new regulations could have far-reaching implications for India's renewable energy landscape, potentially slowing down investment and expansion efforts in the sector.

Topics

Economy Climate Change Energy