The Central Electricity Regulatory Commission (CERC) has granted conditional relief to renewable energy developers whose interstate transmission system connectivity was revoked due to delays in project commissioning.

The Commission held that the Central Transmission Utility of India (CTUIL) acted in accordance with the Connectivity and General Network Access Regulations, 2022, when it issued revocation notices.

However, given the advanced stage of project development and the circumstances leading to the delays, the Commission exercised its regulatory powers to relax certain provisions and extend the validity of connectivity.

Background

The case related to several renewable energy projects. Serentica Renewables India 4 challenged the revocation of connectivity for a 200 MW wind project. ReNew Green Energy Solutions and its special purpose vehicle, ReNew Green MHP One, contested the revocation of connectivity for a 117 MW wind project. Another petition related to the revocation of connectivity for multiple projects, including a 100 MW solar project and wind projects of 76 MW and 48 MW capacity.

According to the developers, connectivity for these projects was originally granted under the 2009 connectivity regulations and later transitioned to the General Network Access framework introduced in 2022.

They argued that the CTUIL had issued show-cause notices in January 2025 and subsequently issued revocation notices in March 2025 on the ground that the projects had not achieved commercial operation within the time allowed under the GNA Regulations.

The petitioners argued that the delays in commissioning were caused by factors beyond their control. These included land conversion issues, right-of-way constraints, excessive rainfall, delays in obtaining approvals, and challenges related to project implementation, such as micro-siting of wind turbines.

The developers submitted that they had made substantial progress toward project completion and had already invested significant amounts in the projects. They stated that revoking connectivity at this stage would result in the loss of major investments and undermine the development of renewable energy capacity.

The developers also argued that the six-month period prescribed under GNA Regulations should be counted from the start date of connectivity rather than from the scheduled commercial operation date indicated in earlier applications.

They contended that calculating the period from the earlier date would create an impractical situation where a project could be expected to achieve commercial operation even before the connectivity became operational.

CTUIL opposed these arguments and maintained that its actions were fully consistent with the regulatory framework. It stated that under the GNA Regulations, connectivity can be revoked if a generating station fails to achieve commercial operation within six months after the scheduled commercial operation date indicated in the connectivity application.

According to CTUIL, the developers themselves had declared the commissioning timelines in their Stage II connectivity applications and subsequently failed to meet them. The utility also stated that connectivity had already been revoked and that the bank guarantees submitted by the developers had been encashed in accordance with the applicable regulations.

CTUIL argued that the transition of connectivity from the earlier regulatory framework to the GNA regime did not change the scheduled commercial operation date declared by the developers. As a result, failure to commission the projects on time justified revocation of connectivity.

Commission’s Analysis

The Commission examined the submissions of both the petitioners and the CTUIL and reviewed the project timelines, connectivity agreements, and relevant provisions of the GNA Regulations. It noted that the petitions involved similar issues regarding the revocation of connectivity due to the non-commissioning of projects within the stipulated timelines.

Under the regulatory framework, connectivity to the interstate transmission system may be revoked if the connectivity and corresponding general network access have become effective, but the generating station fails to achieve commercial operation within six months of the scheduled commercial operation date declared in the connectivity application. The Commission observed that this provision is intended to ensure that developers do not hold transmission capacity indefinitely without bringing projects into operation.

The Commission also examined the sequence of events in the present cases. The developers had applied for Stage II connectivity and specified commissioning schedules in their applications. These schedules formed the basis for determining the timelines under the GNA Regulations. The Commission noted that the petitioners had not disputed the data submitted by the CTUIL regarding these timelines.

At the same time, the Commission took note of the developers’ submissions on the progress achieved in the construction and commissioning of their projects. It noted that the petitioners had made significant investments and that several components of the projects were already completed or close to completion.

The Commission concluded that the CTUIL’s revocation of connectivity was in accordance with the provisions of the GNA Regulations. However, it also observed that effective compliance monitoring by the transmission utility should ensure that delays and revocation triggers are identified and addressed in a timely manner.

Considering the projects’ advanced stage and the potential loss of renewable energy capacity if connectivity were revoked, the Commission decided to exercise its regulatory powers to relax the applicable provisions. It held that the connectivity covered under the revocation notices would not stand revoked, subject to specific conditions.

The Commission clarified that the relaxation would operate subject to a compensation mechanism for delayed commissioning. It directed that 50% of the total connectivity bank guarantees be treated as compensation for the first three months from the revocation trigger date. For delays from three to six months beyond the trigger date, compensation would be payable on a per-day basis in proportion to the uncommissioned capacity.

For delays beyond six months and up to twelve months, the applicable per-day compensation rate would increase by 10% each month. For delays from twelve to fifteen months, compensation would be payable at 200% of the applicable rate.

CTUIL was directed to adjust the compensation against the encashed bank guarantees and, once that amount is exhausted, to raise monthly bills. If the compensation remains unpaid for three months from the date of billing, CTUIL must revoke the connectivity in accordance with the GNA Regulations.

The Commission also imposed an outer limit on the extension. The developers were granted a maximum delay window of fifteen months from the revocation trigger date to achieve commercial operation, failing which connectivity would be revoked for the corresponding uncommissioned capacity.

The petitioners were further directed to re-furnish the encashed connectivity bank guarantees within one month of the order, failing which the connectivity would stand revoked.

CERC had earlier upheld CTUIL’s decision to cancel transmission connectivity for 300 MW wind projects in Gujarat since it had failed to demonstrate any progress in land acquisition or financial closure for the projects.

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