MNRE opposes uniform DSM norms for renewable projects

New Delhi: The Ministry of New and Renewable Energy (MNRE) has urged the power regulator to retain a separate deviation settlement mechanism (DSM) for wind and solar projects, arguing that renewable generators should not be treated on par with conventional power plants.

In its comments on the draft Deviation Settlement Mechanism and Related Matters (Third Amendment) Regulations, 2026, the ministry said renewable energy generation is inherently weather-dependent and cannot be equated with controllable output from thermal or other conventional plants.

The draft regulations propose treating future wind and solar generators like other electricity sellers for DSM charges and changing the benchmark used for certain contract-rate calculations.


DSM is the framework under which generators and distribution companies are financially penalised for deviations between scheduled and actual power supplied or drawn from the grid.

The ministry said bringing renewables under the same DSM regime would increase financial risk, hurt project bankability and force developers to factor higher uncertainty into tariffs.

It recommended retaining a technology-specific, graded DSM framework for renewable projects, with deviations linked to available capacity and the readiness of forecasting systems, renewable energy management centres, scheduling platforms, ancillary markets and storage.

The ministry also sought exemptions or a longer transition period for smaller renewable generators, weather-based DSM calculations, and flexibility for developers to offset deviations through self-purchase or third-party mechanisms such as Grid India.