UPERC Proposes Tighter Norms For Banking Renewable Energy

UPERC Proposes Tighter Norms For Banking Renewable Energy

In a significant shift likely to impact investment decisions in Uttar Pradesh’s energy sector, the Uttar Pradesh Electricity Regulatory Commission (UPERC) has proposed sweeping changes to the banking provisions for captive and renewable energy projects under its Draft (Captive and Renewable Energy Generating Plants) Regulations, 2024.

The new draft regulation, which will replace the 2019 framework, proposes a near-total withdrawal of energy banking for new non-renewable captive plants commissioned after March 31, 2024, and a highly conditional, capacity-limited banking allowance for renewable captive plants. This move signals a clear intent to reduce what discoms view as a revenue leakage while tightening grid discipline and enhancing operational predictability.

25% Caping on Injected Power 

Under the proposed norms, banking for existing non-renewable captive plants will only be permitted for one year following the notification of the new regulations, with a monthly banking cap of 25% of injected energy. Renewable Energy (RE) captive plants – excluding bagasse and municipal solid waste (MSW) projects – will also face monthly banking limits: either 25% of injected energy or 30% of the captive user’s total drawl from the discom, whichever is higher.

Notably, MSW plants and Small Hydro Projects will not be allowed to bank energy at all, while bagasse-based plants get a quarterly ceiling of 49% for banking, with limited carry-forward privileges.

RECs For Lapsed Banked RE

Despite the tightening, the Commission has retained 100% banking on a 15-minute time block basis, but with usage restrictions—off-peak banked energy can only be withdrawn in off-peak hours. Unused banked energy beyond defined ceilings will lapse without compensation, although renewable energy plants may receive Renewable Energy Certificates (RECs) for such lapses.

The regulations also propose banking charges at withdrawal—8% for solar, wind, and hybrid RE sources, and 12% for all other captive sources—levied on energy banked at the consumption end.

By curbing banking flexibility, UPERC is aiming to balance consumer interests, discom financial health, and grid reliability, while promoting direct consumption and timely scheduling of power. Industry stakeholders now have a limited window to respond before the rules are finalized.