MERC Proposes Seven Regulatory Changes To Support 100 GW RE And 20 GW/100 GWh Storage In Maharashtra

The Maharashtra Electricity Regulatory Commission (MERC) has initiated a major overhaul of the state’s electricity regulations following the notification of Maharashtra’s Renewable Energy and Energy Storage Policy for 2025–26 to 2035–36. The proposed changes seek to align the regulatory framework with the state’s growing renewable energy capacity, rising peak demand, and increasing integration of variable solar and wind generation.

The state policy targets a 50% share of renewable energy in total electricity demand by FY 2029–30 and 65% by FY 2035–36. It also requires distribution licensees to procure energy storage capacity equivalent to at least 10% of their demand by FY 2035–36, with 85% of annual stored energy required to come from renewable sources. These targets could translate into around 100 GW of renewable energy capacity and 20 GW/100 GWh of energy storage capacity by FY 2035–36.

To implement the policy through enforceable regulations, MERC constituted a multi-stakeholder Working Group in April 2026. The Commission subsequently released seven draft regulations and amendments covering transmission connectivity, open access, rooftop renewable energy, battery storage, forecasting, renewable purchase obligations, and the state grid code.

The proposed Intra-State Transmission Connectivity and General Network Access Regulations, 2026, seek to align Maharashtra’s transmission framework with national GNA provisions. The draft replaces point-to-point access with capacity-based entitlements and introduces Solar-Hour, Non-Solar-Hour, and Full-Day access options. It also allows connectivity to be transferred or split.

The Distribution Open Access Regulations, 2026, propose a unified framework for conventional Open Access and Green Energy Open Access. Standalone energy storage systems that draw electricity only for intermediate storage would be exempt from transmission, wheeling, and cross-subsidy charges when the stored energy is consumed within Maharashtra.

For rooftop renewable energy systems, MERC has proposed mandatory battery storage for new installations above 100 kW. Such systems would need storage equivalent to 50% of renewable capacity for two hours or 25% for four hours. The draft also introduces Virtual Net Metering for residential consumers and public bodies.

Separate BESS regulations would establish operational, connectivity, and accounting rules for storage facilities functioning as both electricity consumers during charging and generators during discharge. The State Grid Code would also extend technical, scheduling, operational, and ancillary service requirements to BESS facilities.

MERC has also proposed changes to forecasting, scheduling, and deviation settlement. The framework would gradually shift between FY 2026–27 and FY 2030–31 toward calculating deviation errors based on scheduled generation rather than available capacity.

Another major change concerns renewable energy banking. The existing in-kind banking mechanism is proposed to be replaced with monetary charges comprising a fixed Banking and Standby Charge in Rs/kW/month and a variable Banking Charge in Rs/kWh on set-off energy. Banking provisions would vary according to contracted renewable capacity, with larger projects receiving more banking slots.

Projects of 10–100 kW would have four monthly banking slots, while 0.1–1 MW projects would receive eight slots. Projects between 1–5 MW would have 12 slots, and projects above 5 MW would have 24 slots. Systems up to 10 kW would not attract banking and standby charges under the proposed framework.

MERC stated that existing long-term contracts would continue to receive protection through grandfathering provisions. The proposed regulatory overhaul is intended to strengthen grid security, support renewable and storage investments, and improve cost allocation among electricity consumers.