CERC recent Draft Order (1/SM/2026) regarding congestion charges in inter-state transmission presents a significant financial and operational hurdle for the RE industry.
While grid security is a shared priority, the current proposal to impose congestion charges on RE generators—at 1.5 times the contract rate of charges for deviation with a minimum floor of ₹3/unit and a maximum of Rs 10/unit—threatens the viability of RE projects.
RE generators are already governed by the Deviation Settlement Mechanism (DSM), which penalizes variability. Imposing an additional 1.5x multiplier for congestion creates a "dual penalization" structure. Unlike conventional plants, wind and solar farms cannot instantaneously ramp down without losing that energy forever. Penalizing a generator for an inherent characteristic of the resource—its variability—is an extra financial burden on an industry already operating on thin margins.
The proposed floor price of ₹3/kWh is particularly concerning. During peak solar hours, the Market Clearing Price (MCP) can drop below ₹0.5/kWh. A ₹3/kWh penalty for "over-injection" essentially forces RE generators to curtail power, leading to a national loss of "Must-Run" green energy.
Often, grid congestion is a direct result of delayed Inter-State Transmission System (ISTS) infrastructure. It is inherently unfair to place the financial burden of these infrastructure delays on the generators who are ready to supply power but are restricted by the grid’s current capacity.
To ensure the RE sector continues to thrive, following may be proposed
The path to a green grid should be paved with incentives for technology and infrastructure, not punitive measures that place the weight of the transition on the shoulders of RE developers.
