The Central Electricity Regulatory Commission’s (CERC) compensation-based mechanism allowing RE developers additional time to meet key connectivity milestones will help long gestation complex projects such as pumped hydro and RE plus storage.The issue relates to the regulator’s order, earlier this month, regarding the procedure to levy compensation charges for additional time to achieve milestones under the CERC’s (Connectivity and General Network Access to the inter-State Transmission System) Regulations, 2022.These connectivity milestones are submission of documents for 50 per cent of the land required for the connectivity sought; achieving financial closure and project commissioning.The CERC has now replaced the automatic revocation of grid connectivity for delayed renewable energy projects with a compensation based mechanism. Roughly 5,300 megawatt (MW) of RE projects face revocation of connectivity till October 2026 for failing to commission the project.Commenting on CERC’s new graded compensation mechanism for renewable energy projects, Moody’s Ratings said the regulator’s mechanism is a modest credit positive for the Indian renewable energy (RE) sector. By replacing the previous ‘comply-or-lose-connectivity’ regime with a payable Milestone Extension Charge (MEC), it converts a binary tail risk into a quantifiable cost and lets advanced-stage projects preserve scarce transmission connectivity, it added. “The benefit is clearer for long-gestation complex projects (e.g. pumped hydro, large RE+storage) exposed to evacuation-infrastructure delays; it is broadly neutral for on-schedule developers and offers little relief to weaker projects, for which the charges could add cost,” it emphasised.For additional time to submit land documents, a developer must have documents for a minimum 20 per cent of the land required and needs to submit at least 15 working days before the original compliance deadline ends.The deadline and criteria for submitting land documents also apply for seeking extension on financial closure.Similarly, to get extension on the commercial operation date (CoD), developers who are following the land or land-bank guarantee route should have documents for a minimum 75 per cent of the land. Developers under the letter of award (LoA) or power purchase agreement (PPA) route should have documents for at least 50 per cent of the required land for the project.The regulator observed that achieving CoD (project commissioning) is the critical and ultimate milestone towards ensuring the effective and timely utilisation of connectivity and the linked transmission system.It pointed out that a number of entities that were either served revocation notices or, in anticipation of getting such notices for failure to achieve the milestones, filed petitions seeking additional time to achieve the milestones. The entities seeking such time are at various stages of implementation of the project, including some at an advanced stage of implementation.A number of such cases have been disposed of by this Commission, giving additional time on payment of compensation. It is noted that there is 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 (GNA) Regulations, it added.“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,” the regulator said in its suo motu order.However, to get the extension, RE developers have to meet certain eligibility criteria and show project progress.Published on August 24, 2026