Power regulator allows renewable energy projects to retain grid access by paying compensation

The latest order comes as some renewable energy developers have approached the CERC seeking additional time to achieve the milestones after receiving notices from CTUIL.

“The entities seeking such time are at various stages of implementation of the project, including some at an advanced stage of implementation. Several such cases have been disposed of by this commission, giving additional time on payment of compensation,” the order read.

It stressed the need for an immediate requirement to handle such cases uniformly, in which entities have made progress towards project implementation and are seeking additional time to meet the milestones under the General Network Access Regulations.

“It is noted that such entities have been holding on to the connectivity, a scarce resource; therefore, additional time should be allowed, with payment of compensation, irrespective of the reasons for such delay, in a graded manner to ensure the earliest compliance with the milestones,” it added.

Eligibility to qualify for extension

In its order, CERC specifies that developers must meet strict eligibility criteria, such as securing a minimum percentage of required land, to qualify for these extensions. Compensation would be levied based on the specific milestone for which an extension is sought, with rates generally increasing over time to encourage early compliance.

Clean energy developers will have to pay Rs ⁠1,000 per megawatt (MW) per day to obtain extra time for land and financing requirements, while Rs 3,000 per MW per day for delays in starting commercial operations.

To qualify for an extension, an entity must demonstrate project progress by meeting minimum thresholds at least 15 working days prior to the original milestone deadline. For land and financing extensions, the developer must furnish land documents for at least 20% of the required land. For extensions in commercial operation date, entities would be required to furnish land documents of 50% to 75% of the required land depending on the project type.

Developers can ⁠get up to three additional months to complete land requirements, six months to secure financing and as much as 12 months to commission ⁠projects, it read. If these projects still fail to meet the deadlines, they risk losing their grid connectivity and associated bank ⁠guarantees.

The order also clarified that 100% of compensation collected for the delay in commercial operations and 50% of compensation collected for land and finance-related deadline extension would be utilised to reduce the Monthly Transmission Charges for other users under the Sharing Regulations, 2020.