The Central Electricity Regulatory Commission (CERC) has unveiled a one-time framework that could unlock nearly 22 GW of stalled renewable energy projects by allowing developers to either repurpose, surrender or substitute connectivity obtained through legacy Letters of Award (LoAs). According to the latest regulatory order dated July 11, this comprehensive mechanism addresses a long-standing issue where developers secured interstate transmission system (ISTS) connectivity based on LoAs issued by Renewable Energy Implementing Agencies (REIAs) such as SECI, NTPC, NHPC and SJVN, but failed to sign power purchase agreements (PPAs) due to delays in corresponding power sale agreements (PSAs) with distribution companies. The order provides four choices to developers whose LoAs have remained without PPAs for over 12 months, with entities covered under the order having 60 days after publication of the final list by Central Transmission Utility of India Ltd (CTUIL) to exercise these options. Following consultations with 35 stakeholders and a public hearing, the commission has relaxed certain provisions of the General Network Access (GNA) regulations introduced in 2022.
According to data analysed by the CERC, REIAs issued LoAs aggregating 40.42 GW between 2019 and June 2025, however, PPAs have materialised for only 2.34 GW of this capacity. Connectivity linked to projects lacking PPAs currently stands at 22.05 GW, of which around 6.35 GW faces transmission planning constraints. The CERC estimates that approximately 15.7 GW of transmission connectivity could be released for other developers through this regulatory intervention, representing a significant opportunity to optimize grid infrastructure utilization. The problem originated from CERC's General Network Access (GNA) Regulations introduced in 2022, where renewable energy developers were allowed to obtain grid connectivity based on Letters of Award, but in many cases, distribution companies and buying utilities did not sign the corresponding Power Sale Agreements, leaving valuable grid infrastructure unused for long periods. As per the CERC, a substantial amount of renewable energy capacity has been awarded between 2019-2025 to power producers, but most of it does not yet have customers, resulting in transmission access being occupied by projects that may not move ahead.
The CERC has introduced a comprehensive relief mechanism with four distinct options for developers facing stranded transmission capacity. The first option allows developers to exit the state-backed LoA route without losing their grid connectivity by submitting a No Objection Certificate (NOC) from the issuing agency and providing a reduced Performance Bank Guarantee of ₹8 lakh per MW. These projects can then move forward as merchant or independently contracted projects, with a maximum commercial operation deadline of 24 months from CTUIL's acceptance of the application or the firm start date of connectivity, whichever is later. The second option enables developers to replace a stalled LoA with an active PPA linked to another project LoA, allowing common parent companies or subsidiaries to transfer project capacity while meeting a commercial operation timeline of up to 30 months from the date of conversion. The third option gives developers the opportunity to surrender their unused grid connectivity without any financial penalty, with CTUIL processing such requests and returning the applicable connectivity bank guarantees after settlement of transmission-related dues. The fourth option allows developers to continue under the existing GNA regulations, though they will remain subject to normal regulatory requirements including penalties and possible cancellation of connectivity if project milestones are not achieved.
The CERC has introduced a market-based mechanism for reallocating surrendered connectivity that ensures efficient utilization of stranded transmission capacity. Connectivity released under the surrender route will first be offered to projects already holding connectivity within the same substation cluster. Any remaining capacity will subsequently be auctioned by CTUIL through an open bidding process with a base price of ₹3 lakh per MW. Successful bidders will be required to furnish a Performance Bank Guarantee of ₹30,000 per MW, while proceeds from auctions and reallocations will be used to reduce monthly transmission charges payable by drawee Designated Inter-State Customers (DICs) under the Sharing Regulations. The framework also lays down detailed provisions for handling partial capacity conversions, excess installed capacity and multi-location renewable energy projects. Industry participants have largely welcomed the move, arguing that it could significantly improve transmission utilisation while giving developers greater flexibility amid changing market dynamics. The CERC order also reflects increasing regulatory concern over speculative booking of transmission connectivity, an issue that has become more pronounced as India's renewable capacity pipeline expands rapidly.
The surrendered connectivity will follow a structured distribution process designed to optimize grid infrastructure utilization. The CERC order emphasizes that "connectivity is a scarce resource and the need of the hour is to utilise stranded transmission capacity in a timely manner." The systematic approach ensures that grid capacity is allocated efficiently and effectively to projects with genuine generation potential. For India's renewable sector, which is targeting 500 GW of non-fossil fuel capacity by 2030, the release of nearly 22 GW of stranded connectivity could provide a meaningful boost to project execution and alleviate one of the industry's most pressing bottlenecks. Power producers can also retain transmission connectivity, provide additional bank guarantees, but develop the power project independently, providing multiple exit options for stranded projects. The commission has directed that all revenue generated from these auctions, along with any forfeited bidding deposits, will be used to reduce monthly transmission charges, ensuring that consumers and distribution utilities benefit from the efficient use of the national transmission network. The framework applies to entities that have obtained in-principle or final connectivity under the General Network Access (GNA) Regulations based on LoAs, including projects transitioned from the earlier 2009 Connectivity Regulations, covering LoAs issued by REIAs between January 1, 2019 and May 31, 2025.
