Renewable Energy Sector Voices Strong Opposition to CERC's Transmission Connectivity Overhaul
The Central Electricity Regulatory Commission faces significant pushback from the renewable energy industry over its proposed changes to transmission connectivity rules. Private developers and power sector stakeholders have raised serious concerns about the regulator's staff paper released in late November.
Proposed Changes Spark Industry-Wide Concerns
CERC's proposal suggests a fundamental shift in how future renewable energy projects secure transmission connectivity. The regulator wants to grant connectivity only against signed power purchase agreements instead of the current system based on Letters of Award. This move aims to ensure better utilization of transmission infrastructure.
Currently, the General Network Access regulations allow multiple pathways for connectivity. Projects can secure access through Letters of Award, partial land acquisition, or bank guarantees. The proposed changes would eliminate these options, creating what industry players call unnecessary hurdles.
The PPA Dilemma and Infrastructure Underutilization
The proposals come at a critical time for India's renewable energy sector. Approximately 31.8 gigawatts of renewable capacity already has connectivity but lacks signed power purchase agreements. This situation leads to significant underutilization of transmission infrastructure.
The National Solar Energy Federation of India highlights a crucial problem. PPA signing processes remain administratively fluid and often face delays beyond developers' control. Making connectivity dependent on signed PPAs could turn the allocation process into what NSEFI calls a bureaucratic race rather than a merit-based system.
Industry Bodies Raise Multiple Red Flags
Major renewable energy implementing agencies have expressed strong reservations about the proposed changes. Solar Energy Corporation of India and National Hydro Power Corporation both oppose linking connectivity exclusively to signed PPAs.
NHPC argues this approach would make developing renewable projects through implementing agencies unfeasible. The company points out that PPAs between implementing agencies and developers only get signed after power sale agreements with buying entities are finalized. Without connectivity clarity at the Letter of Award stage, project commissioning timelines become uncertain.
SECI raises additional concerns about cost assessment and bid participation. Distribution companies want certainty on project timelines before signing power sale agreements, creating a circular problem that could stall project development.
Auction Mechanism Faces Criticism
CERC's alternative suggestion of an auction-based mechanism for connectivity allocation has drawn sharp criticism from private developers. Major players including Adani Green Energy, Tata Power, and Jindal India Renewable Energy have voiced strong objections.
Adani Green Energy argues that auctions fail to address core structural issues in the sector. The company points to persistent delays in transmission planning, augmentation, and commissioning that auctions cannot resolve.
Jindal India Renewable Energy warns about tariff implications. A twin auction structure for project awards and connectivity would inevitably push renewable energy tariffs higher, contradicting national goals of affordable green power.
Broader Sectoral Impacts and Emerging Models
The Indian Wind Turbine Manufacturing Association highlights another critical concern. While shifting to PPA-only eligibility might curb speculative blocking of transmission bays, it risks excluding emerging business models.
Merchant power projects, captive installations, commercial and industrial models, open-access arrangements, and storage-linked projects often cannot secure long-term PPAs at the outset. These innovative approaches could face exclusion under the proposed framework.
ACME Solar Holdings raises concerns about market concentration. Auctioning connectivity could lead to monopolization by financially stronger entities without ensuring timely project execution or optimal grid utilization. This approach might limit competition and discourage innovation from smaller developers.
The Way Forward for Renewable Energy Development
Tata Power offers a different perspective on the transmission underutilization issue. The company describes delayed PPA signing as a momentary problem rather than a structural flaw requiring radical framework changes.
Transmission infrastructure typically requires three to four years for development, while most renewable projects aim for commissioning within twenty-four months. Tata Power suggests that adequate administrative and regulatory measures should ensure timely transmission availability rather than treating it as a scarce resource.
The industry consensus appears clear. While improving transmission utilization remains important, the proposed changes could create more problems than they solve. Stakeholders continue to engage with the regulator, hoping for a balanced approach that supports India's renewable energy ambitions without creating unnecessary barriers.
