CERC introduces compensation for delayed renewable energy connectivity milestones

The Central Electricity Regulatory Commission (CERC) has issued a suo motu order establishing a compensation mechanism for renewable energy developers. This mechanism allows eligible developers to obtain extensions for key connectivity milestones under the 2022 CERC Regulations regarding connectivity and general network access to the Inter-State Transmission System.

The extensions apply to the submission of land documents, achievement of financial closure (FC), and the commercial operation date (COD). Developers must pay milestone extension charges (MEC) to qualify. Rates start at Rs 1,000 per MW per day for land and FC extensions, and Rs 3,000 per MW per day for COD extensions, with rates increasing for longer delays.

Permitted extension periods are capped at three months for land compliance, six months for financial closure, and 12 months for the commercial operation date. Failure to meet milestones within these extended periods may result in the revocation of connectivity and the encashment of bank guarantees. If a project achieves its COD without needing the full extension, 50 per cent of the paid MEC will be refunded, calculated on a pro-rata basis for partial COD. The CERC has directed that MEC proceeds be used to reduce monthly transmission charges.