CERC allows delayed RE projects to retain ISTS connectivity with penalty

The Central Electricity Regulatory Commission (CERC), through its order dated March 2, 2026, has allowed three renewable energy developers—Serentica Renewables India 4 Pvt. Ltd., ReNew Green Energy Solutions Pvt. Ltd., and ReNew Green (MHP One) Pvt. Ltd.—to retain inter-state transmission system (ISTS) connectivity despite delays in achieving commercial operation. The relief is subject to payment of compensation. Following the order, the Central Transmission Utility of India Limited (CTUIL) has calculated and published the compensation payable by each developer.

Revocation and legal dispute
CTUIL had revoked connectivity for the projects citing non-compliance with timelines under Regulation 24.6 of the Connectivity and General Network Access (GNA) Regulations, 2022. The developers challenged the action, arguing that as transition cases from the 2009 Connectivity Regulations, the six-month timeline for achieving commercial operation date (COD) should be counted from the revised start date of connectivity under the GNA framework.

CTUIL maintained that upon transition under Regulation 37, the developers became connectivity grantees under the GNA Regulations and were therefore subject to Regulation 24.6.

CERC findings
CERC held that transitioning entities are governed by the GNA Regulations. However, it identified a procedural gap, noting that while CTUIL updated connectivity start dates during transition, revised scheduled commercial operation dates (SCOD) were not obtained. The Commission concluded that SCOD should align with the revised start date of connectivity.

Given that the projects were at advanced stages of execution, CERC exercised its powers under Regulations 41 and 42 to allow retention of connectivity subject to a structured compensation mechanism.

Compensation framework
The Commission directed that 50% of the connectivity bank guarantees (Conn-BGs) be paid as upfront compensation for the first three months beyond the revised trigger date. For delays between three and six months, compensation is calculated on a daily basis (RATE6).

For delays between six and twelve months, the rate increases by 10% per month. For delays between twelve and fifteen months, compensation rises to 200% of the base rate. Connectivity will be revoked for any capacity not commissioned after fifteen months.

CTUIL calculation and project status
In compliance with the order, CTUIL issued a determination on March 17, 2026, detailing compensation amounts and deposits made against encashed Conn-BGs.

ReNew Green (MHP One) Pvt. Ltd. deposited Rs 5.84 crore. ReNew Green Energy Solutions Pvt. Ltd. deposited Rs 2.5 crore, Rs 2.02 crore, and Rs 1.4 crore across three applications. Serentica Renewables India 4 Pvt. Ltd. deposited Rs 7.5 crore.

Revocation notices for ReNew entities were issued on March 10, 2025, while Serentica’s revocation letter was issued on December 30, 2025.

Based on submissions to CTUIL, ReNew has achieved COD for part of its capacity and submitted supporting documents, while Serentica has not yet achieved COD for its project.

Compliance requirements
CTUIL will adjust compensation from encashed Conn-BGs and return any surplus for commissioned capacity. For uncommissioned capacity, balances will be retained and adjusted monthly. If the encashed amount is exhausted, CTUIL will raise monthly bills, with late payment surcharge applicable.

Developers are required to re-furnish Conn-BGs within one month of the order. Connectivity will be revoked if compensation remains unpaid for three months or if delays exceed fifteen months.

CERC directed that compensation collected be used to reduce transmission charges under the Sharing Regulations, 2020, while clarifying that liabilities under these regulations remain unchanged.

The featured photograph is for representation only.