INDIA Trends and Developments Contributed by: Poonam Verma Sengupta, Aditya Gupta, Sakshi Kapoor and Rajesh Jha, JSA
Together, the MNRE proposal and the CERC proceed- ings seek to address the disconnect between connec- tivity allocation and project development. Their out- come is likely to be significant for developers holding LoA-based connectivity and for future allocation of transmission access under the GNA framework. Strengthening project delivery and implementation discipline Addressing stranded connectivity is only a part of the challenge. Connectivity must ultimately translate into project implementation. The GNA framework therefore links retention of connectivity to achievement of pre- scribed milestones relating to land acquisition, finan- cial closure and commissioning. These milestones relate to submission of land docu- ments, achievement of financial closure and com- missioning. Failure to achieve these milestones may result in revocation of connectivity and encashment of applicable bank guarantees. Project delays may arise due to factors such as land acquisition, statutory approvals etc which are beyond the control of the developers. Recognising this, CERC, in its suo motu Order dated 15 April 2026 in Petition No. 5/SM/2026, has proposed a framework permit- ting extension of milestone timelines upon payment of Milestone Extension Charges (MECs). The proposed framework introduces a structured mechanism for grant of additional time for achieve- ment of land, financial closure and commissioning milestones. The proposed MEC starts at INR1,500 per MW per day for delays relating to land and finan- cial closure milestones and INR3,000 per MW per day for delays in achieving commercial operation. These charges increase with the duration of delay and are coupled with defined limits on the period for which extensions may be granted. The proposal reflects a move towards a more calibrated framework that com- bines implementation discipline with limited regulatory flexibility. While the MEC proposal addresses delays from the perspective of connectivity retention under the GNA framework, project delays may also affect eligibility for ISTS charge waiver benefits. Recognising this, CERC
amended the CERC (Sharing of Inter-State Transmis- sion Charges and Losses) Regulations, 2020 on 26 June 2025 to permit extension of the Scheduled Com- mercial Operation Date (SCOD) for renewable energy generating stations and BESS projects eligible for ISTS charge waivers and having a SCOD on or before 30 June 2025. The extension may be granted where the delay is attributable to force majeure events, non- availability of the transmission system or reasons not attributable to the project developer. Such extensions may be granted up to two times, with each extension not exceeding six months. Where a project is backed by a PPA awarded through tariff-based competitive bidding under Section 63 of the Electricity Act, 2003, the extension is granted by the relevant REIA, distribution licensee, authorised agency or MNRE, as applicable. In other cases, the extension is considered by CERC. To operational- ise this framework, CERC constituted a committee through its Office Order dated 30 July 2025 to exam- ine extension requests by developers and make rec- ommendations to CERC. Together, these developments reflect the regulatory focus on ensuring that connectivity translates into timely project execution. They also demonstrate a willingness to accommodate genuine implementation challenges while preserving discipline in the use of transmission infrastructure. Grid integration and operational discipline As renewable energy assumes a larger share of the generation mix, regulatory attention is focused on the operational challenges associated with generation. In this context, CERC’s suo motu Order dated 13 March 2026 in Petition No. 1/SM/2026 proposes revi- sions to the congestion charge framework applicable to entities contributing to transmission congestion. The proposal seeks to strengthen scheduling disci- pline through congestion charges of 1.5 times the applicable Deviation Settlement Mechanism (DSM) rate, subject to a floor of INR3/kWh and a ceiling of INR10/kWh. CERC has also continued to refine the DSM frame- work. Through its suo motu Order dated 31 March
146 CHAMBERS.COM
Powered by FlippingBook