Regulators rarely amend several seemingly unrelated provisions at the same time unless those provisions are responding to a common set of developments.
Battery energy storage systems operating across multiple charging cycles. Renewable electricity procured through power exchanges. Pumped storage projects serving multiple beneficiaries. Renewable projects awaiting transmission infrastructure before they can be commissioned. Revised approaches to transmission deviation accounting.
These belong to different parts of the electricity sector. But CERC’s Draft Fifth Amendment to the Sharing of Inter-State Transmission Charges and Losses Regulations, 2020 brings them into the same document.
The main feature of the amendment is surely the proposed changes to ISTS transmission charge waivers. But the explanatory memorandum points to a broader story.
Many of the proposals arise from operational issues raised by developers, Grid-India and industry bodies following the Fourth Amendment and subsequent policy developments. They suggest that the existing framework is being tested by project structures and operating models that have evolved more quickly than the regulations governing them.
The draft remains open for stakeholder comments until 31 August 2026. Whatever changes emerge from the consultation process, the questions that prompted the amendment are unlikely to disappear.
Only a few years ago, many of these issues would scarcely have arisen. Battery storage had yet to assume its present role in firm and dispatchable renewable energy projects. Renewable procurement remained largely bilateral, while project structures were comparatively straightforward.
Today, storage is integrated into project design, procurement routes have diversified, and developers are working within commercial arrangements that look very different from those around which many of the existing provisions were framed.
Storage offers perhaps the clearest example of that evolution.
When storage no longer fits a single regulatory model
The early policy debate largely revolved around whether battery storage should receive regulatory support comparable to renewable generation. As deployment has accelerated, the discussion has shifted from eligibility to implementation.
The question is no longer whether storage qualifies for transmission charge waivers, but how those waivers should apply when storage operates through different technical and commercial configurations.
That shift runs through several provisions of the draft.
One proposal clarifies that where a Battery Energy Storage System (BESS) forms an integral part of a Renewable Energy Generating Station (REGS) or Renewable Hybrid Generating Station (RHGS), the applicable waiver period would remain aligned with the commercial operation date of the renewable generating station, rather than the storage component itself. Another addresses co-located battery systems operating across different charging cycles, recognising that the same asset may charge from different eligible sources depending on operational requirements.
The framework is not being asked to accommodate a single model of battery storage. It is being asked to accommodate a growing range of operating arrangements, each carrying different commercial and scheduling implications.
Markets are becoming part of regulatory compliance
The same evolution is visible in the proposed treatment of the Green Day Ahead Market (G-DAM).
CERC has proposed that renewable electricity procured through G-DAM may count towards the minimum renewable charging requirement for storage projects, provided the relevant power exchange certifies the renewable energy mix underlying those transactions.
The proposal is narrowly drafted, but it reflects a wider change. As renewable procurement increasingly occurs through organised electricity markets, compliance mechanisms are also evolving to recognise those transactions through certification and source-wise verification, rather than assuming a single procurement pathway.
Project structures are changing faster than regulatory assumptions
The same pattern extends beyond battery storage.
Pumped storage projects, particularly those serving multiple beneficiaries, expose another area where commercial practice has moved ahead of the original regulatory framework.
Existing provisions assess compliance with the renewable charging requirement at the project level. Stakeholders argued that this could produce unintended outcomes where different contracts within the same project follow different charging profiles. The draft responds by proposing contract-level assessment in specified circumstances, allowing eligible contracts to be evaluated independently where the overall project does not satisfy the prescribed threshold.
A similar appreciation of operational diversity appears in the treatment of projects delayed because the associated transmission infrastructure is not ready.
The proposed framework would allow certain renewable projects to retain graded transmission charge waivers despite such delays, subject to conditions relating to contract execution, contract tenure and commissioning timelines after General Network Access becomes effective.
Neither proposal expands the scope of transmission incentives. Instead, both recognise that projects which appear similar on paper may operate under materially different commercial and infrastructure conditions.
Accounting is becoming a policy issue
Alongside the proposed waiver changes, CERC has revisited provisions relating to GNARE and T-GNARE transactions, dual connectivity arrangements and transmission deviation accounting, while requiring Grid-India and other implementing agencies to develop detailed operational procedures.
As project configurations become more flexible and procurement pathways multiply, regulatory certainty depends not only on defining eligibility but also on establishing reliable methods for measuring, certifying and accounting for increasingly complex transactions.
Whether electricity is procured through an exchange, a battery charges through multiple pathways, or a pumped storage project serves different beneficiaries, the underlying regulatory challenge is remarkably similar: ensuring that compliance can be demonstrated consistently across diverse operating models.
Looking beyond the draft
The Draft Fifth Amendment reflects an electricity system in which storage has become integral to renewable energy projects, procurement is no longer confined to bilateral contracts, project structures are becoming more varied, and transmission planning increasingly influences project execution.
The amendment does not seek to redefine the purpose of transmission charge waivers. It seeks to ensure that the existing framework remains workable as the range of operating models continues to expand.
Its individual provisions will naturally attract detailed scrutiny during the consultation process, and some may well change before the regulations are finalised. But the broader direction is already apparent. Transmission regulation is being shaped not by hypothetical project structures, but by the experience of implementing renewable energy and storage projects at scale.
The Draft Fifth Amendment is not simply revisiting the mechanics of ISTS waivers. It reflects the steady adaptation of transmission regulations to an electricity sector whose commercial and operational arrangements are becoming more diverse with every passing year.
Which of the proposed changes do you think will have the greatest practical impact once the regulations are finalised?
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