The Central Electricity Regulatory Commission (CERC) has notified the Connectivity and General Network Access (GNA) to the Interstate Transmission System (Third Amendment) Regulations, 2025.

The new rules modify several aspects of the Principal Regulations of 2022, introducing expanded definitions, revised procedures for application withdrawals, restructuring of bank guarantee requirements, rules for connectivity to interstate transmission system (ISTS) substations, and detailed compliance obligations for renewable generating stations and energy storage systems.

Expanded Definitions and New Concepts

The amendment introduces multiple new definitions crucial for operating interstate connectivity. A cluster of ISTS substations is defined as one or more substations grouped together and approved by the Central Transmission Utility (CTU) based on criteria such as geographical proximity, technical feasibility, planning requirements, and topographical considerations.

This provision aims to improve planning and rationalize connectivity requests by grouping substations that are technically and geographically aligned.

Another important definition is that of a connectivity grantee, which is now formally recognized as an entity that has been issued a final connectivity grant and has signed the Category-1 connection agreement under Regulation 10. This provides a clear legal and regulatory standing to such entities.

The amendment also introduces the definition of the regional load despatch centre (RLDC) for the region in which the state is geographically located. It also defines solar and non-solar hours as distinct scheduling blocks. Solar hours are to be declared weekly by the National Load Despatch Centre (NLDC) based on anticipated solar insolation for each state or part thereof, while non-solar hours refer to all other blocks of the day.

Correspondingly, the regulations introduce solar and non-solar hour access to regulate injection scheduling rights. Solar hour access permits injection during solar hours for the quantum of connectivity granted, and during non-solar hours for non-solar sources within the connectivity limit, along with drawal rights throughout the day.

Non-solar hour access provides injection scheduling rights only during non-solar hours and full-day drawal rights. These provisions aim to align transmission scheduling with the variability of renewable energy generation.

Refund of Bank Guarantee

Under the regulations, if an application is withdrawn before the in-principle grant, 50% of it is forfeited, while the remaining fee and bank guarantees will be refunded within fifteen days.

Once in-principle connectivity is granted, withdrawals will attract stricter financial consequences. Withdrawal before the final grant will result in the full forfeiture of the application fee and the forfeiture of 5% of the bank guarantee, with the encashment of the Connectivity Bank Guarantee 1 (Conn-BG1). The treatment of Conn-BG2 depends on whether augmentation or terminal bays have been awarded.

After the final connectivity grant but before signing the agreement, the penalty will increase to 15% of the bank guarantee, along with full forfeiture of the application fee and encashment of Conn-BG1. These provisions aim to prevent speculative applications from blocking transmission capacity.

Connectivity Small Renewable Projects

Another significant provision is the declaration of the Bhakra Beas Management Board (BBMB) system as part of the ISTS. Renewable energy generating stations and energy storage systems (ESS) can now apply for connectivity to the BBMB transmission networks.

Projects between 5 MW and 50 MW will be eligible to apply to the nodal agency, accompanied by a fee of ₹500,000 (~$5,632.35), supported by a system study conducted by the BBMB. These entities must submit letters of award (LoA), power purchase agreements (PPAs), land documents, or bank guarantees in lieu of land, and provide Conn-BG1, Conn-BG2, and Conn-BG3, along with one-time GNA charges.

For projects below 5 MW, connectivity may be sought by applying directly to BBMB SLDC, subject to approval and payment of ₹500,000 (~$5,632.35)/project, but without the requirement of land or bank guarantees. Within 60 days of notification, NRLDC must publish separate procedures for scheduling and accounting of such projects.

Hybrid Projects

The amendment introduces differentiated connectivity rules for renewable projects. Wind-based projects or standalone ESS with a capacity of 50 MW and above can apply for either non-solar hour access at designated substations or for full-day access.

Solar projects and renewable hybrids, which combine solar with other sources, will be generally treated as entities with solar hour access, unless the non-solar capacity available is less than 50 MW, in which case they will retain full-day access.

The regulations include worked-out examples to demonstrate how installed capacities will be split between solar hour and non-solar hour scheduling, removing ambiguity for developers.

Additional Capacity

Existing connectivity grantees have been given the flexibility to install additional capacity, including generation and storage, within the connectivity quantum already granted, without augmenting the ISTS.

This will be subject to approval from the nodal agency and compliance with the grid code. Net injection or drawal cannot exceed the granted quantum, and fresh bank guarantees, including Conn-BG1 and Conn-BG3, must be submitted within one month of in-principle approval.

Except for hydro or pumped storage projects, the scheduled commercial operation date for such capacity must not be later than 24 months from the date of approval. One-time GNA charges will be exempted for additional capacity.

Financial Requirements

The amendment rationalizes financial requirements for connectivity, introducing a new category for substations below 132 kV, with Conn-BG2 fixed at ₹10 million (~$112,670.3). Conn-BG1 will continue at ₹5 million (~$56,335.15), while Conn-BG2 for other cases will be equal to the estimated cost of augmentation or terminal bays.

RBI-recognized scheduled commercial banks must issue bank guarantees in favour of the CTU. Failure to provide bank guarantees within one month will lead to application closure.

Land and Project Costs

Land requirement per MW and estimated project cost per MW will be published by CTU and updated periodically in consultation with the Central Electricity Authority. Developers can change land parcels once by following a detailed process, but must ensure that valid documents always cover at least 50% of the land requirement. Applications using the same land for multiple projects are strictly prohibited.

Change of Source Rules

The amendment allows developers to change their renewable energy source. For example, from solar to wind or hybrid, within 18 months of in-principle connectivity or 18 months before effective GNA, whichever is later. Such changes can only be made once.

The nodal agency may require fresh system studies and must approve or reject within thirty days. However, changes that require more land than originally detailed will not be permitted unless driven by LoA or PPA terms.

Connectivity and Compliance Monitoring

Once final connectivity is granted, developers must sign a Category-1 connectivity agreement within 30 days. Failing to do so can result in grant revocation. A Category-2 agreement, containing detailed technical connection data, must be signed before physical connection.

The regulations stipulate that no injection will be permitted before the Category-2 agreement is signed. Failure to sign agreements within the stipulated timeframes will result in bank guarantees forfeiture and connectivity revocation.

The nodal agency will be tasked with monitoring compliance with land and financial closure requirements under Regulation 11A and publishing these details on its website.

RLDCs must monitor utilization of granted connectivity and GNA, with the NLDC submitting consolidated quarterly reports to CERC. Non-optimal utilization will prompt corrective measures in accordance with procedures to be established.

Reallocation of Vacant Bays

To ensure optimal utilization of the transmission system, the regulations provide for the reallocation of terminal bay capacity that will become vacant due to the withdrawal or revocation of connectivity.

Such reallocations will be restricted to within the same ISTS substation cluster and must maintain the original start date of connectivity. Priority will be determined based on the original date and time stamp of applications, with long-term access and Stage-II grantees under the 2009 Regulations given precedence. Entities can avail reallocation only once.

Recently, CERC proposed tightening the deviation settlement mechanism rules for wind, solar, and hybrid projects, effective from 2026.

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