2 weeks ago
CERC lets renewable developers pay to keep grid connections
In India, companies build big solar and wind farms that need permission to connect to the electricity grid.
Sometimes a company is late finishing its project, and before, it could lose that permission right away.
A special electricity court called CERC has made a new rule: a late company can pay a daily fee and keep its grid permission a little longer.
The fee gets bigger the longer the company is late, but it must first show it has bought some land and started working.
Different types of delay have different fees and time limits.
The money collected is used to lower electricity transmission charges for other power buyers.
If a company still does not finish in time, it loses its permission and its bank guarantee.
This rule gives almost-finished projects a fair chance to be completed.
CERC's new mechanism lets renewable projects that miss milestones retain grid connectivity by paying escalating daily compensation charges.
Developers pay Rs 1,000 per MW per day for land and financing extensions and Rs 3,000 per MW per day for commissioning delays, rising to Rs 6,000.
Extensions of up to three months (land), six months (financing) and 12 months (commissioning) are available to eligible projects.
CTUIL data shows at least 5.3 GW of renewable capacity faces connectivity revocation up to October for missing the commercial operation date.
CERC rejected waivers for delays outside developers' control, while developers had sought up to 18 months and discoms demanded stricter terms.
- Who
- The Central Electricity Regulatory Commission (CERC), renewable energy developers, distribution companies and grid agency CTUIL in India.
- What
- CERC introduced a compensation-based mechanism that allows renewable projects missing project deadlines to retain inter-state grid connectivity by paying daily charges for extra time.
- Where
- India, covering the inter-state transmission system.
- When
- Exact date not specified in the articles; the mechanism addresses connectivity revocations expected up to October.
- Why
- Because grid connectivity is a scarce resource, and CERC wanted a uniform process for developers who had made progress and needed more time, instead of deciding cases one by one.
Renewable developers seeking leniency
Distribution companies and strict-compliance advocates
Exemptions for uncontrollable delays
Renewable developers seeking leniency
Projects delayed by factors outside their control, such as PPA signing or transmission infrastructure, should be exempt from compensation charges.
Distribution companies and strict-compliance advocates
Charges apply regardless of the reason for delay, since holding connectivity without progress blocks other projects from scarce grid capacity.
Charge levels and extension length
Renewable developers seeking leniency
Developers asked for lower daily charges, a lower minimum land requirement and more time, in some cases up to 18 months.
Distribution companies and strict-compliance advocates
Discoms asked for higher charges and stricter conditions so that the extension mechanism does not become a routine way to avoid deadlines.
Key facts
- Regulator
- Central Electricity Regulatory Commission (CERC)
- Commissioning delay charge
- Rs 3,000/MW/day, rising to Rs 6,000/MW/day in months 10-12
- Land/financing extension charge
- Rs 1,000/MW/day, rising to Rs 1,200-1,300
- Maximum extensions
- 3 months (land), 6 months (financing), 12 months (commissioning)
- Capacity facing revocation
- At least 5.3 GW up to October (CTUIL data)
- Eligibility – land
- 20% land for land/financing; 50-75% land for commissioning depending on route
- Use of compensation
- 100% of CoD fees and 50% of land/financing fees cut Monthly Transmission Charges under Sharing Regulations 2020
- Stakeholder comments
- 42 stakeholders, including developers, discoms, CTUIL and industry bodies
Quotes
Srivatsan Iyer
Global CEO, Hero Future Energies
“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”
financialexpress.com
indianexpress.com
“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”
indianexpress.com
Sources
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