CERC proposes one-time exit for stranded RE transmission connectivity
The Central Electricity Regulatory Commission (CERC) has issued a draft order proposing a one-time mechanism to address inter-state transmission system connectivity granted to renewable energy projects that have not signed power purchase agreements (PPAs) within the stipulated period. The proposal aims to release blocked transmission capacity and reallocate it to projects ready for execution.
The draft order, issued in Petition No. 11/SM/2026, notes that significant connectivity granted against Letters of Award (LoAs) by Renewable Energy Implementing Agencies remains unutilised due to delays in executing PPAs, largely linked to the non-signing of Power Supply Agreements by buyers. The Ministry of Power had earlier recommended allowing a one-time surrender of such connectivity without forfeiture of bank guarantees for legacy LoAs as of March 31, 2025.
Under the proposed framework, entities holding connectivity linked to LoAs where PPAs have not been signed for over 12 months will need to select one of three options within one month of a list published by the Central Transmission Utility of India Limited.
Option I allows entities to retain connectivity without exiting the LoA route, subject to committing to project commissioning. This requires submission of a performance bank guarantee of Rs 10 lakh per MW along with land acquisition and financial closure documents within revised timelines. The scheduled commercial operation date (SCOD) is capped at 18 months.
Option II permits substitution of the original LoA with a PPA secured under another LoA, issued by the same or a different agency. In such cases, the SCOD will align with the PPA timeline, subject to a maximum of 30 months from the date of conversion.
Option III enables full surrender of connectivity, with return of all connectivity-related bank guarantees. Capacity freed under this option will first be offered for reallocation to entities already connected to the same substation cluster at a base price of Rs 3 lakh per MW. Any remaining capacity will be auctioned through a transparent bidding process based on increasing price offers, with detailed procedures to be issued by CTUIL.
CERC has invoked its powers under Regulations 41 and 42 of the General Network Access (GNA) Regulations to introduce the measure as a one-time exercise to prevent continued locking of transmission capacity.
Stakeholders have been invited to submit comments by May 21, 2026. The Commission will conduct a public hearing before issuing a final order. CERC has also directed implementing agencies, including NTPC, NHPC, SJVN, and Solar Energy Corporation of India, to submit details of delayed LoAs within seven days, while CTUIL has been tasked with compiling and publishing the connectivity status.
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