Renewable energy developers that miss project milestones will no longer necessarily lose their inter-state transmission connectivity immediately. The Central Electricity Regulatory Commission (CERC) has allowed eligible projects up to 12 months of additional time, in exchange for escalating compensation charges, potentially preventing substantially developed projects from being derailed by execution delays.
The new framework marks a shift from the existing General Network Access regime, under which failure to meet deadlines for land, financial closure or commercial operation can lead to connectivity being revoked and bank guarantees being encashed. CERC said a number of developers facing or anticipating such action had approached the regulator for additional time, including projects already at advanced stages of implementation.
“It is noted that such entities have been holding on to the Connectivity, a scarce resource; therefore, additional time should be allowed, with payment of compensation, irrespective of the reasons for such delay, in a graded manner,” CERC said.
The biggest relaxation relates to commissioning. Developers missing their commercial operation date can retain connectivity by paying a Milestone Extension Charge (MEC) of ₹3,000 per MW per day for the first six months. The charge increases to ₹3,300 in the seventh month, ₹3,600 in the eighth and ₹3,900 in the ninth before doubling to ₹6,000 per MW per day during months 10-12.
The extension cannot go beyond 12 months. If full or part capacity still fails to achieve commercial operation, connectivity for the corresponding capacity will be revoked.
CERC has also opened a paid extension window for earlier project milestones. Developers can get up to three additional months for land compliance, with charges rising from ₹1,000/MW/day to ₹1,200/MW/day. For financial closure, the maximum extension is six months, with MEC starting at ₹1,000/MW/day and rising to ₹1,300 in the sixth month.
The relief, however, will be restricted to projects that can demonstrate tangible progress.
“Such an extension is permissible only if the entity satisfies the eligibility criteria, viz., demonstrates the progress of the Project, and it is not a routine mechanism,” the Commission said.
For extensions related to land and financial closure, developers must have documents for at least 20% of the required land. Those seeking more time to commission projects need 75% land under the land or land-BG route and 50% under the LoA/PPA route, besides contracts for major equipment and civil and electrical works.
CERC also rejected requests to exempt projects where delays were outside developers’ control. The charge will apply “irrespective of the reasons for the delay”, with the regulator arguing that one developer holding connectivity can prevent another project from accessing the same transmission system.
Industry players see the move as reducing a major execution risk.
“This is a welcome and forward-looking step by CERC,” Srivatsan Iyer, Global CEO, Hero Future Energies, said. “By offering a structured, paid extension instead of automatic forfeiture, the regulator has given genuinely committed developers room to see their projects through.”
Iyer said land acquisition, financing and transmission readiness rarely progress in perfect sync, and the framework could reduce the “regulatory cliff risk” of losing years of development work because of delays.
CERC finalised the mechanism after receiving comments from stakeholders, including renewable developers, discoms, CTUIL and industry associations.