KERC Notifies DSM Regulations 2026, Tightens Forecasting Norms For Solar, Wind And Hybrid Projects In Karnataka

The Karnataka Electricity Regulatory Commission (KERC) has notified the Forecasting, Scheduling and Deviation Settlement Mechanism (DSM) Regulations, 2026, introducing a new framework for wind, solar, and wind-solar hybrid energy projects across the state. The regulations were published in the Karnataka Gazette on June 22, 2026, and replace the earlier DSM regulations that had been in force since 2015.

The new rules have been introduced as Karnataka continues to strengthen its position as one of India’s leading renewable energy states. The state has an estimated renewable energy potential of 1,55,074 MW and, as of April 2026, has installed renewable energy capacity of 22,045.69 MW. This includes 10,585.84 MW of solar power, 7,870.81 MW of wind power, and 738.30 MW of wind-solar hybrid capacity.

With renewable energy contributing a growing share of the state’s electricity mix, maintaining grid stability has become increasingly important. Since renewable sources depend on weather conditions, sudden variations in generation can create challenges for balancing power demand and supply. To address these concerns, KERC has introduced stricter forecasting and scheduling requirements along with revised deviation charges.

Under the new regulations, solar power generators will now be allowed a deviation band of only ±5% from their scheduled generation, compared to ±10% under the previous framework. The commission stated that this tighter limit is intended to encourage the use of advanced forecasting and weather-monitoring technologies. Wind and hybrid projects will continue to operate within a ±10% deviation band, while Energy Storage Systems (ESS) will be subject to a zero-tolerance limit.

The commission has also revised the method for calculating deviation settlement charges. Instead of using actual generation as the reference point, the charges will now be calculated based on scheduled generation. According to KERC, this change is intended to protect electricity consumers from bearing additional costs arising from inaccurate forecasting or deliberate mis-declaration by generators. At the same time, to provide relief against unavoidable weather-related fluctuations, annual deviation charges have been capped at 3 paise per unit of total annual generation. Any amount collected beyond this limit will be adjusted in future billing cycles without interest.

Several operational changes have also been incorporated following stakeholder consultations. The timeline for revising generation schedules has been shifted from the 4th time block to the 7th or 8th time block, aligning Karnataka’s practices with the provisions of the Indian Electricity Grid Code (IEGC), 2023.

KERC has excluded power buyers from the DSM framework, citing real-time data limitations and concerns about double penalization. The commission also rejected demands to exempt projects under the PM KUSUM feeder solarization scheme, noting that such projects account for nearly 15% of the state’s renewable capacity and that exemptions could negatively affect grid security.

The State Load Despatch Centre (SLDC) will be responsible for energy accounting under the new framework. Developers and Qualified Coordinating Agencies (QCAs) will be required to install Special Energy Meters and real-time telemetry systems to ensure accurate monitoring and compliance. Delays in payment of deviation charges beyond ten days will attract an interest rate of 0.04% per day.

KERC further stated that funds collected through the State Deviation Pool Account will be utilized for strengthening transmission infrastructure, deploying reactive power equipment, and supporting technical upgrades. The commission has also warned that any form of gaming or intentional mis-declaration aimed at securing unfair commercial benefits will attract strict investigation and legal action.