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• CERC has proposed a framework allowing renewable energy developers additional time to meet land, financial closure and commissioning milestones under GNA regulations through payment of Milestone Extension Charges (MEC).
• The draft procedure introduces graded per-MW daily compensation charges linked to delays in land acquisition, financial closure and commercial operation timelines.
• The proposal also outlines eligibility conditions, revocation triggers, bank guarantee treatment and relaxation mechanisms for renewable and storage project developers seeking connectivity extensions.
The Central Electricity Regulatory Commission (CERC) has issued a draft order proposing a structured mechanism for granting additional time to renewable energy and energy storage developers to meet key milestones under the General Network Access (GNA) Regulations through payment of Milestone Extension Charges (MEC). Advertisement
The draft framework seeks to address delays related to land acquisition, financial closure and commercial operation date (CoD) achievement for projects that have already received in-principle or final connectivity approvals. Under existing regulations, failure to meet such milestones can lead to revocation of connectivity and encashment of bank guarantees submitted by project developers.
According to the proposed framework, developers seeking additional time for submission of land documents or achieving financial closure would be required to pay MEC at INR 1,500 per MW per day. For delays in project commissioning and CoD achievement, the proposed charge has been fixed at INR 3,000 per MW per day. The compensation rates would increase progressively for extended delays beyond the initial permitted period.
The draft procedure proposes a maximum extension period of three months for submission of land documents, six months for achieving financial closure and up to 12 months for commissioning delays. For delays beyond the initial periods, compensation charges would rise in graded slabs, including escalation to INR 6,000 per MW per day for delays extending beyond nine months in achieving CoD.
CERC stated that the proposed compensation framework has been developed under its powers to relax regulations and remove operational difficulties under Regulations 41 and 42 of the GNA Regulations. The Commission observed that the existing framework currently mandates automatic revocation of connectivity in case milestone timelines are not achieved within stipulated periods.
The regulator also noted concerns raised by stakeholders regarding commissioning delays caused by pending readiness of ISTS substations and transmission infrastructure. Several developers had informed the Commission that trial runs and pre-commissioning activities could not begin until substations and bays are energised. In response, CERC proposed allowing at least two months from the GNA effective date for completion of trial operations and testing activities without levy of MEC charges.
The proposed framework also lays down eligibility conditions for availing extensions. Developers seeking additional time for land compliance must submit documents for at least 20% of the required land area, while entities seeking extension for financial closure would need to demonstrate higher levels of land availability depending on the connectivity route. For CoD-related extensions, developers must furnish full land documents, financial closure proof and EPC contract details.
Under the draft mechanism, entities seeking additional time would be required to approach the nodal agency at least 15 days before the original milestone deadline along with supporting documents. The proposal also clarifies that extension of milestones would not alter the firm start date of connectivity and developers would continue to remain liable for mismatch charges under existing sharing regulations.
CERC has invited stakeholder comments, suggestions and objections on the draft proposal before issuing a final order.
Source: CERC
5th Jun, 2025
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