MPERC Expands Renewable Energy Regulations To Include Energy Storage Systems In Madhya Pradesh

The Madhya Pradesh Electricity Regulatory Commission (MPERC) issued a new notification in October 2025, introducing the Third Amendment to its 2018 regulations on forecasting, scheduling, and deviation settlement for renewable energy generation. This amendment brings major updates for wind, solar, and hybrid generating stations and marks a significant step in integrating Energy Storage Systems (ESS) into the state’s electricity grid.

The amendment broadens the scope of the earlier 2018 regulations to include all stand-alone ESS projects with an installed capacity of 10 MW and above. It now applies to all wind, solar, and hybrid wind-solar power projects operating within Madhya Pradesh, provided they meet the specified capacity thresholds — 10 MW for wind and hybrid projects and 5 MW for solar. These projects may also include ESS facilities. For projects selling power outside the state under open access, the new rules are applicable to those with capacities of 1 MW and above.

The new notification also introduces clear and updated definitions for key technical and operational terms that are essential for grid management and deviation settlement. The term “Energy Storage System” or ESS is now formally defined as a facility that converts electrical energy into a storable form and can later reconvert it into electrical energy for supply back into the grid. Another important term defined in the amendment is the “Area Clearing Price” or ACP, which represents the price of electricity transacted on a power exchange after market splitting. The “Reference Charge Rate” or RR is also defined, which serves as a benchmark for calculating deviation charges for general sellers.

The amendment updates the mechanism for calculating the “Deviation-RE” or Absolute Error, which is the measure of the difference between actual generation and scheduled generation for renewable energy projects. It will now be calculated as the percentage error between the actual generation and scheduled generation, referenced against the project’s “Available Capacity” or AvC. The AvC refers to the cumulative capacity of operational turbines or inverters within a specific 15-minute time block.

For settlement purposes, the new framework introduces the concept of treating all wind, solar, hybrid, and stand-alone ESS projects as a “virtual pool” under the State Deviation Pool Account. The State Load Despatch Centre (SLDC) will be responsible for computing deviation charges for all such projects based on their schedules and actual generation data captured through interface meters. If a generator produces less energy than scheduled, it will have to pay deviation charges into the State Deviation Pool Account. Conversely, if a generator produces more than scheduled, it will receive payment from the same account. The rate applied for these deviation settlements will be the tariff specified in the Power Purchase Agreement (PPA) as approved or adopted by the Commission.

Additionally, the amendment strengthens the financial safeguards related to deviation settlements. The Quality Control Agency (QCA), which acts on behalf of project developers for forecasting and scheduling, must now furnish a new payment security mechanism to the SLDC in the form of a Bank Guarantee (BG). The required BG amount varies depending on the type of project. For stand-alone ESS projects, the BG is fixed at Rs 5,000 per MW, while for wind projects with or without ESS, it is Rs 40,000 per MW. The purpose of this guarantee is to ensure the timely payment of deviation settlement mechanism (DSM) charges. If a QCA fails to pay the required amount into the State Deviation Pool Account within 60 days, the SLDC is authorized to encash the bank guarantee. Through these new provisions, MPERC aims to enhance grid stability, ensure accurate forecasting, and support the integration of renewable energy and storage technologies. The amendment is expected to improve operational discipline among generators while paving the way for smoother renewable energy management and greater reliability in Madhya Pradesh’s power system.