UPERC Approves Pilot Project To Facilitate Interstate Peer-To-Peer (P2P) Trading Of RE

In a significant step toward enabling cross-border renewable energy trade, the Uttar Pradesh Electricity Regulatory Commission (UPERC) has approved a six-month pilot project to facilitate interstate peer-to-peer (P2P) trading of green energy under the India Energy Stack (IES) framework.

The approval follows a petition filed by the state discom-Pashchimanchal Vidyut Vitran Nigam Limited (PVVNL) seeking regulatory clearance for a pilot demonstration of interstate P2P transactions between prosumers in Uttar Pradesh and consumers in Delhi. The initiative is aligned with the India Energy Stack, a Digital Public Infrastructure framework launched by the Ministry of Power in June 2025 to accelerate digitalization of the power sector and promote consumer-centric electricity markets.

UP-1st In Regulatory Framework For P2P Trading 

Uttar Pradesh had become the first state to notify a regulatory framework for P2P rooftop solar trading in April 2023. However, scaling up transactions beyond intra-state boundaries posed regulatory and operational challenges. Existing guidelines in both Uttar Pradesh and Delhi were designed for intra-state transactions and did not address interstate settlement complexities, including cross-border billing, wheeling charge allocation, and treatment of system operation charges.

To bridge these gaps, the pilot leverages a digital architecture proposed by the India Smart Grid Forum, known as the Digital Energy Grid (DEG). The system enables prosumers and consumers to discover prices and execute day-ahead contracts using blockchain or other secure digital technologies. Financial settlements are routed through RBI-compliant payment gateways, while energy flows are validated through smart meter data integrated with distribution company systems.

Three Discoms To Work Together 

The pilot will involve three distribution licensees across two states: Pashchimanchal Vidyut Vitran Nigam Limited in Uttar Pradesh, and Tata Power Delhi Distribution Limited and BSES Rajdhani Power Limited in Delhi. The approval mirrors a corresponding order issued by the Delhi Electricity Regulatory Commission earlier this month, enabling reciprocal participation.

Under the order, UPERC has permitted the pilot for a period of six months covering Phase 1 and Phase 2 of the demonstration. The Commission has formally sanctioned the use of blockchain or other secure digital platforms for transaction management.

On the financial framework, wheeling charges of ₹1.01 per kWh will apply as per the prevailing tariff order. The Commission has agreed to an arrangement under which PVVNL may recover these charges from Delhi consumers purchasing power from Uttar Pradesh-based prosumers. In addition, transaction charges of ₹0.42 per kWh, inclusive of GST, have been approved and will be shared equally between the prosumer and the consumer.

Cross Subsidy Surcharge Waived Of

To support the demonstration, the Commission has waived the applicability of Cross Subsidy Surcharge (CSS) for energy transacted under the interstate pilot. It has also granted relaxation from penalties for under-injection by solar producers and under-drawal by consumers, while retaining penalty provisions for over-injection and over-drawal in accordance with existing regulations.

All participating consumers and prosumers will be required to use smart meters, regardless of whether they are on prepaid or postpaid billing plans. Energy charges can be settled directly between buyers and sellers on the digital platform, without routing through the DISCOM billing system, although licensees must issue monthly bills to prepaid consumers incorporating P2P transactions. Scheduling norms require participants to submit energy transaction schedules at least eight time blocks prior to supply, with no rescheduling permitted thereafter.

Limited In Scope 

The Commission emphasized that the pilot is limited in scope and intended primarily for regulatory learning. It observed that the initiative is designed to avoid any material adverse impact on grid security, system operations, consumer tariffs, or distribution company revenues.

The order effectively paves the way for what industry observers describe as India’s first structured interstate digital marketplace for rooftop solar energy, allowing households and small producers to trade green power across state boundaries through a secure digital infrastructure. If successful, the six-month experiment could lay the groundwork for a broader rollout of interstate peer-to-peer renewable energy trading under the India Energy Stack framework.