The Central Electricity Regulatory Commission (CERC) on March 20, 2026, issued the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) (Second Amendment) Regulations, 2026, further to amend the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2024.
The following has been stated:
• These Regulations come into force from March 20, 2026, except for amendments to Regulations 51 and 52, which shall be effective from April 01, 2024.
• The regulations expand the scope by making tariff provisions applicable to energy storage systems integrated with thermal generating stations and transmission systems, and introduce detailed definitions (like battery cycle, round-trip efficiency, declared capacity, etc.) to standardize ESS operations and accounting.
• A major change is the introduction of a separate supplementary tariff mechanism for ESS, including fixed storage charges and energy charges, which shall be applied for within 90 days of commercial operation. The tariff is based on actual capital expenditure, efficiency, and energy sourcing (from generating stations, other sources, or open market).
• The amendments prescribe normative operational parameters for ESS such as 90% availability, 85% round-trip efficiency, and 5% auxiliary consumption, along with provisions for return on equity (14%), depreciation, working capital, and O&M expenses (2% of capital cost with escalation).
• Detailed provisions are added for capitalization and approval process, requiring prior approval, cost-benefit analysis, and stakeholder consultation before installing ESS, along with separate treatment for generating stations and transmission systems.
• The regulations also introduce computation formulas for ESS charges, covering capacity and energy charges depending on charging source, efficiency, and auxiliary consumption, along with incentives for higher efficiency and provisions for sharing gains between generators and beneficiaries.
• Additionally, amendments cover mine regulations, O&M expenses, ash transportation cost recovery, interest rate caps on related-party loans, and tariff filing formats, while enabling participation in a regulatory sandbox for innovation with limited cost allowance.
[Notification no. - L-1/268/2022/CERC]
