The Central Electricity Regulatory Commission (CERC) has proposed a one-time relief mechanism for renewable energy developers whose projects have stalled after securing interstate transmission connectivity but failing to sign power purchase agreements. The draft seeks to unlock large amounts of unused grid capacity tied to delayed solar, wind and hybrid projects and to allow developers to retain or repurpose connectivity rights.

Over recent years, many developers secured connectivity based on Letters of Award (LoAs) issued by implementation agencies such as SECI, NTPC, NHPC and SJVN, but in many cases, PPAs were not executed, leaving transmission capacity stranded. The regulator has proposed three pathways for affected developers, including a route enabling continuation of projects with a fresh performance bank guarantee of Rs one million (mn) per Megawatt (MW) and revised timelines for land acquisition, financial closure and commissioning.

A second pathway would permit substitution of the original LoA with a different PPA obtained under another renewable tender, while a third would allow surrender of connectivity so the Central Transmission Utility of India Ltd (CTUIL) can reallocate or auction the capacity. The draft introduces auction-based allocation after initial reallocation, with a proposed base auction price of Rs three lakh per MW, equivalent to Rs zero point three million (mn) per MW, linked to guarantees otherwise encashed when connectivity is revoked.

Successful bidders for operational connectivity may be required to commission projects within 12 months, while projects tied to under-construction transmission links may receive up to 24 months, and failure to meet milestones could trigger cancellation and encashment of guarantees. The Ministry of Power had earlier recommended one-time relaxation for legacy projects and industry reaction has been mixed, with some developers warning that additional guarantees could strain smaller firms, while others welcome measures that may improve transmission utilisation. CERC has invited comments on the draft by May 15 and plans a public hearing before finalising the mechanism.