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					</table>As a conditional relief measure for renewable energy developers granted grid connectivity access, the Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) recently introduced a standardized mechanism that allows them additional time to meet land, financial closure, and commercial operation milestones by paying milestone extension charges.
Policy Impact 
While developers get more time to meet the milestones, opting to use the full 12-month extension window comes at a hefty price. For example, a 300 MW renewable energy project utilizing the full extension window for delayed commercial operation could incur ~₹421 million (~$4.40 million) in milestone extension charges (MEC). This is even before accounting for applicable mismatch charges or contractual liabilities under its power purchase agreement (PPA).
However, developers under the new general network access regime will avoid losing grid access if they fail to meet the prescribed deadlines. The extra time does not reset several other timelines governing the project.
This could make the cost of a delay potentially bigger than the MEC itself.
The CERC introduced the mechanism after several entities facing or anticipating connectivity revocation sought additional time to meet GNA milestones. Some projects had already reached advanced stages of implementation.
The Commission decided that projects demonstrating sufficient progress should have an opportunity to retain connectivity by paying compensation. Its reasoning hinges on the scarcity of connectivity. A delayed project can prevent another project from accessing the transmission system.
What it Does Not Change
The significance of the mechanism lies partly in what an extension does not change.
The CERC has expressly retained the original firm start date of connectivity, even when additional time is granted to meet a milestone. The developer consequently remains liable for applicable mismatch charges under the Sharing Regulations.
The additional time also does not modify or dilute obligations under a PPA, including provisions concerning liquidated damages.
A project can therefore receive additional time to achieve commercial operation while still facing liabilities tied to other project timelines.
This requires developers to independently manage their land and financial closure milestones, commercial operation requirements, firm start date of connectivity, and contractual commissioning schedule.
The impact is particularly relevant when delays begin early in development. Land acquisition delays can affect financial closure, procurement, and construction, eventually pushing commissioning beyond its prescribed deadline.
CERC treats these milestones independently. If a developer requires additional time for more than one milestone, MEC must be paid separately for each extension. A single underlying project delay can therefore result in charges at multiple stages.
The Cost Rises Quickly
Financial exposure becomes substantial as project capacity and delay duration increase.
For land compliance, the MEC starts at ₹1,000 (~$10.45) /MW/day for the first 30 days, increases to ₹1,100 (~$11.50) /MW/day for the second 30-day period, and ₹1,200 (~$12.54) /MW/day for the third.
A 300 MW project using the entire three-month land extension would consequently pay ₹29.7 million (~$310,442).
Financial closure can be extended by up to six months. MEC remains ₹1,000 (~$10.45) /MW/day for the first three months before increasing to ₹1,100 (~$11.50)/MW/day in the fourth month, ₹1,200 (~$12.54)/MW/day in the fifth, and ₹1,300 (~$13.59)/MW/day in the sixth.
For a 300 MW project using all six months, the resulting MEC would be ₹59.4 million (~$620,884).
COD delays carry considerably greater exposure.
CERC has set the base charge at ₹3,000 (~$31.36)/MW/day for the first six months. It increases to ₹3,300 (~$34.49) /MW/day in the seventh month, ₹3,600 (~$37.63)/MW/day in the eighth, and ₹3,900 (~$40.77)/MW/day in the ninth. From the tenth through twelfth months, the charge rises to ₹6,000 (~$62.72)/MW/day
A 300 MW project using the full 12-month extension would therefore pay approximately ₹421.2 million (~$4.40 million).
These charges apply to the capacity that has not achieved COD. Partial commissioning can therefore reduce the quantum on which subsequent COD extension charges apply.
Delays Beyond a Developer&#8217;s Control Still Attract MEC
Who bears the cost when the developer did not cause the original delay?
Stakeholders wanted an exemption from, or a reduction in, charges for delays caused by force majeure and other circumstances beyond the developers&#8217; control.
CERC rejected an attribution-based exemption from the standardized mechanism.
It held that MEC is payable irrespective of the reason for the delay. It reasoned that connectivity remains a scarce resource regardless of what caused the project to fall behind schedule.
The framework therefore places the immediate cost of retaining connectivity on the entity holding it. It does not itself distinguish between developer-caused delays and uncontrollable delays.
CERC also clarified that MEC payments cannot be treated as a change-in-law event.
Why Developers May Still Pay
The alternative to paying MEC can carry larger consequences for projects that have already committed capital and made substantial development progress.
The MEC mechanism gives progressing projects the option to retain connectivity while completing the remaining work.
Eligibility requirements are designed to restrict that option to projects demonstrating measurable progress.
A developer seeking additional time for land compliance must already have documents covering at least 20% of the required land. A 20% land threshold also applies to financial closure extensions for the applicable routes.
The threshold rises substantially for COD extensions. Projects under the Land or Land Bank Guarantee route must demonstrate land availability covering at least 75% of the requirement, while projects under the Letter of Award or PPA route must demonstrate at least 50%.
Recovering a Delay Has a Financial Reward
The framework rewards developers for recovering project schedules.
When a project achieves commercial operation on time. 50% of the MEC paid for additional time relating to land and financial closure, corresponding to the capacity commissioned within the permitted period, can be returned without interest.
Developers can also ask the Central Transmission Utility of India (CTUIL) to retain the unused MEC already paid for one milestone and adjust it against the MEC required for another milestone.
Clearing Connectivity Held by Stalled Projects
The mechanism also changes how CTUIL can deal with delayed projects.
Instead of relying on individual proceedings whenever a project seeks relief from an approaching milestone, CTUIL now has standardized eligibility criteria, processing timelines, and charges for determining whether a project can retain connectivity.
Once CTUIL approves additional time and communicates the applicable MEC, the developer must make the prescribed payment within three working days. Failure to do so leaves connectivity subject to the existing GNA Regulations.
The proceeds also feed back into transmission charges. The ERC has directed that 100% of MEC collected for COD extensions and 50% collected for land and financial closure extensions be used to reduce monthly transmission charges.
The remaining 50% collected for land and financial closure extensions will be held separately because it may have to be returned to developers that subsequently meet the prescribed COD conditions. Amounts that do not qualify for refund will ultimately also be used to reduce monthly transmission charges.

CERC’s Connectivity Relief a Double-Edged Sword for Delayed Renewable Projects

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					</table>The Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/">CERC</a>) has introduced a standardized mechanism allowing renewable energy and other eligible connectivity grantees additional time to meet land, financial closure, and commercial operation milestones under the general network access (GNA) regulations by paying milestone extension charges (MEC).
Under the existing GNA Regulations, failure to submit the required land documents, achieve financial closure, or achieve commercial operation on time can result in grid connectivity revocation.
The Commission noted that several entities, including those with projects in advanced stages of implementation, facing revocation had sought additional time.
It said since connectivity is a scarce resource, only projects demonstrating progress should be allowed more time, with compensation payable for the extension period.
For extensions related to land documentation, the entity must submit land documents covering at least 20% of the total land required for the connectivity capacity at least 15 working days before the original compliance deadline.
The additional period for meeting the 50% land documentation requirement can extend up to three months. The MEC will be ₹1,000 (~$10)/MW/day during the first month, ₹1,100 (~$11)/MW/day during the second month, and ₹1,200 (~$12)/MW/day during the third month.
If the entity fails to meet the land requirement within the three-month extension, its connectivity will be revoked. The land bank guarantees will be encashed, while the connectivity bank guarantees will be treated in accordance with the applicable GNA Regulations.
For extensions to achieve financial closure, entities under the Land BG route or letter of award and power purchase agreement route must also submit land documents covering at least 20% of the total land required.
CERC has permitted a maximum additional period of six months for financial closure. MEC will be ₹1,000 (~$10)/MW/day for the first three months, ₹1,100 (~$11)/MW/day during the fourth month, ₹1,200 (~$12)/MW/day during the fifth month, and ₹1,300 (~$13)/MW/day during the sixth month.
Failure to achieve financial closure within the additional six-month period will result in connectivity revocation and treatment of bank guarantees under the GNA Regulations.
CERC has prescribed higher extension charges for delays in achieving commercial operation.
Entities under the Land or Land BG route must submit land documents covering at least 75% of the required land to qualify for an extension of the commercial operation deadline. Entities under the Letter of Award or PPA route must demonstrate land availability covering at least 50% of the requirement.
They must also furnish details of contracts executed for the supply of major equipment and for civil and electrical works, either separately or under an Engineering, Procurement, and Construction contract.
The MEC for delayed commercial operation will be ₹3,000 (~$31)/MW/day for the first six months. The charge will increase to ₹3,300 (~$34)/MW/day in the seventh month, ₹3,600 (~$37)/MW/day in the eighth month, and ₹3,900 (~$40)MW/day in the ninth month.
For the tenth through twelfth months, the charge will increase to ₹6,000 (~$62)/MW/day.
The maximum extension permitted for achieving commercial operation will be 12 months from the stipulated deadline. Compensation will apply to the capacity that has not achieved commercial operation.
If the project fails to achieve commercial operation for the full or partial capacity within the extended period, connectivity corresponding to the uncommissioned capacity will be revoked.
Entities seeking extensions must approach the Central Transmission Utility of India (CTUIL) in advance and submit the required documents at least 15 working days before the applicable milestone deadline.
CTUIL will have seven working days to scrutinize the documents and identify deficiencies. The applicant will then have seven working days to rectify them. CTUIL will subsequently determine whether the eligibility criteria have been met and communicate the applicable MEC.
The entity must pay the prescribed charges within three working days of CTUIL&#8217;s intimation. Failure to do so will result in closure of the extension request, and connectivity will then be treated according to the GNA Regulations.
The MEC must generally be paid 15 days in advance on a per-day basis. Entities can choose to make advance payments covering a longer expected delay.
If the applicable milestone is achieved before the end of the period for which MEC has already been paid, CTUIL must refund the charge corresponding to the unused days within 15 days, without interest.
Developers can also request that CTUIL retain the remaining MEC amount and adjust it against charges payable for extensions relating to another milestone.
Where an entity requires additional time for more than one milestone, MEC will be payable separately for each milestone.
However, if the project achieves commercial operation within the stipulated deadline plus the additional period permitted under the order, 50% of the MEC paid for land or financial closure extensions corresponding to the capacity commissioned within the prescribed period will be refunded.
CERC has also provided that where the connectivity revocation date under Regulation 24.6 falls within two months of the GNA effective date, the commercial operation deadline will be extended so the entity receives at least two months beyond the GNA effective date to achieve commercial operation.
No MEC will apply during this additional period, although it will count toward the overall maximum 12-month extension.
The Commission clarified that the extension mechanism will apply irrespective of the reason for the delay.
The Commission also clarified that payment of MEC will not be treated as a change-in-law event.
Additional time granted under the procedure will not modify or dilute contractual obligations under PPAs, including provisions relating to liquidated damages.
The firm start date of connectivity will also remain unchanged despite any milestone extension. The entity will remain liable for applicable mismatch charges under the Sharing Regulations.
CERC said 50% of the MEC collected for land and financial closure extensions and 100% of the MEC collected for commercial operation extensions will be used to reduce monthly transmission charges under the Sharing Regulations.
CTUIL will hold the remaining 50% collected for land and financial closure extensions separately until it is either refunded to eligible developers or used to reduce monthly transmission charges.
Renewable energy developers <a href="https://www.mercomindia.com/developers-flag-risks-in-cercs-network-access-delay-charges-proposal" target="_blank" rel="noopener">raised</a> concerns over the proposed charges, arguing that the framework could penalize projects for delays beyond their control and seeking lower charges and exemptions in certain cases.
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CERC Allows Paid Grid Connectivity Deadline Extensions for Renewable Projects

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					</table>The Central Electricity Regulatory Commission’s (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) proposed framework for milestone extension charges could bring greater discipline to the General Network Access (GNA) regime.
However, renewable energy developers say the final framework must distinguish between developer-driven delays and those resulting from transmission readiness, power purchase agreement (PPA) execution, financing, land approvals, and statutory clearances.
CERC has <a href="https://www.mercomindia.com/cerc-proposes-compensation-framework-for-delays-in-meeting-gna-milestones" target="_blank" rel="noopener">proposed</a> milestone extension charges (penalty fees developers pay when seeking extra time to meet mandatory project deadlines) of ₹1,500 (~$15.54)/MW/day for additional time to submit land documents in the first month. The charge will rise to ₹1,650 (~$17.09)/MW/day in the second month and ₹1,800 (~$18.65)/MW/day in the third month.
For financial closure, the charges proposed are ₹1,500 (~$15.54)/MW/day for the first three months, with escalation in the fourth, fifth, and sixth months. For commercial operation date (COD) delays, the charges are ₹3,000 (~$31.08)/MW/day for the first six months, then ₹6,000 (~$62.16)/MW/day for the next six months. Where revocation is triggered within two months of the GNA&#8217;s effective date, no milestone extension charges will apply for the first two months.
The Commission said developers need time for trial runs, pre-commissioning tests, and integration activities, which can be carried out only after the relevant bay and substation are charged.
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/06/CERC-MEC.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-96058 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/06/CERC-MEC.png" alt="CERC MEC" width="558" height="341" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/06/CERC-MEC.png 558w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/06/CERC-MEC-300x183.png 300w" sizes="auto, (max-width: 558px) 100vw, 558px" /></a>
Extension Charges  Necessary but Incomplete
According to Vinay Pabba, CEO of <a href="https://www.vibrantenergy.in/" target="_blank" rel="noopener">Vibrant Energy</a>, the genesis of this proposal lies in a structural tension that has been building within the GNA framework since its notification in June 2022. “When CERC introduced the GNA Regulations, it made a deliberate policy choice to move away from the earlier long-term open access regime and create a more disciplined, milestone-linked connectivity framework.”
He noted that the GNA framework attracted a large volume of connectivity applications, many of which were filed without commensurate project preparedness in terms of land acquisition, offtake arrangements, or equity mobilization. The escalating milestone-extension charge structure imposes a financial carrying cost for continued occupancy of connectivity slots without corresponding project advancement.
Another developer noted that several bona fide projects have faced genuine headwinds, including protracted land acquisition, extended tender-to-PPA timelines, and, in several cases, delays in ISTS substation commissioning by the Central Transmission Utility itself. A blanket revocation policy applied without such distinction would have been commercially harsh and counterproductive to India’s renewable energy deployment targets.
Developers Mercom spoke with were unanimous in saying that the eligibility thresholds in the draft procedure, including the minimum land document compliance required before accessing the milestone extension charges window, can help filter out speculative applicants while preserving relief for developers that have demonstrated project commitment.
External Delays a Concern
Pabba said the framework would improve discipline only partially because it cannot address delays outside a developer’s control. “The milestone extension charges framework, as currently proposed, does not, and structurally cannot, address the underlying causes of delay that are exogenous to the developer.”
Land acquisition remains <a href="https://www.mercomindia.com/indias-solar-open-access-expansion-hit-by-land-roadblocks" target="_blank" rel="noopener">dependent</a> on state-level revenue administration, inter-departmental coordination, and community acceptance. Financial closure timelines are influenced by lenders&#8217; risk appetites, which often depend on offtake certainty. Statutory clearances for forest, environment, and defense approvals also follow timelines that developers can pursue but cannot compel.
The other developer argues that delays caused by transmission readiness, PPA execution, state approvals, and statutory clearances should not be treated on a par with matters within the developer’s control.
No Time for Trial Runs
Transmission readiness remains the most critical concern. The draft order acknowledges the specific hardship for developers, noting that GNA takes effect on the same day the substation achieves COD, leaving no time for trial runs or pre-commissioning activities.
“The Commission’s response, a two-month milestone extension charges -free window post-GNA effective date, is a welcome, if modest, relief,” Pabba said.
The broader issue of systemic delays in the commissioning of interstate transmission system substations by the Central Transmission Utility remains insufficiently addressed.
The developer also argued that penalizing a developer for delays attributable, even in part, to the transmission utility’s execution failures raises legitimate questions of regulatory equity.
They have also sought clarity on how the final procedure will address cases in which ISTS infrastructure delays prevent evacuation or commissioning despite project readiness. Developers also argue that the milestone extension charges clock should start only after the associated transmission system is ready for use.
Calls for Causation-Based Relief
Pabba said the final framework should distinguish between developer-attributable delays and delays caused by external factors, including renewable energy implementing agencies, distribution companies, state authorities, lenders, Central Transmission Utility, and transmission licensees.
The draft adopts a position that is explicit and deliberately blunt, which is that compensation charges shall apply ‘irrespective of the reasons for such delay.’ The Commission’s rationale is understandable. Connectivity is a scarce resource, and the system cannot afford indefinite forbearance regardless of causation. However, conflating developer-attributable delays with delays caused by external institutional failures is counterproductive.
“Where delay is demonstrably attributable to an external agency, milestone extension charges liability should either be suspended or the extension period should not count against the developer’s maximum allowable additional time,” Pabba said.
Delay Costs Could Affect Future Bids
The cost implications of the framework could affect future bidding. Developers may need to price the exposure to milestone extension charges as a contingent liability in project cost models.
“Given the compressed bid margins that characterize India’s renewable energy auctions, where L1 and L2 bids are often separated by fractions of a paisa, even a modest milestone extension charges liability on a large project can meaningfully impair returns. The rational developer response is to build a risk premium into bids, exerting upward pressure on discovered tariffs,” Pabba said.
The developer also added that lenders may factor exposure to milestone extension charges into credit assessments by imposing higher debt service reserve requirements or tighter covenants. Where milestone extension charges arise from delays caused by distribution companies or renewable energy implementing agencies, developers may seek recovery through change-in-law provisions in power purchase agreements, thereby increasing litigation risk.
They also warn that a fault-neutral milestone extension framework could raise the cost of capital for projects in which delay risks are linked to external agencies rather than developer performance.
Smaller Developers at Risk
The proposed charges may affect smaller developers more than large renewable energy companies.
“For a smaller, single-project or limited-portfolio developer, the same charges, at ₹3,000 (~$31.08) to ₹6,000 (~$62.16)/MW/day across a meaningful capacity quantum, can rapidly escalate into a sum that threatens financial closure itself, creating a perverse spiral where the penalty for delay accelerates the very default it seeks to prevent,” Pabba said.
This could lead to market consolidation, reduced bidding competition, and upward pressure on tariffs if smaller and mid-sized developers reduce participation or sell distressed assets to larger players. As a solution, CERC could consider a tiered, milestone-extension-charge structure based on project size, or a cap on aggregate milestone-extension-charge liability as a proportion of project equity.
Overlapping Charges
Another concern highlighted by the developer is the possibility of overlapping charges. CERC’s draft procedure states that additional time allowed under the milestone extension charges mechanism will not change the firm start date for connectivity, and the entity will remain liable to pay applicable mismatch charges under the Sharing Regulations, 2020.
However, the potential for simultaneous milestone extension charges and mismatch charge liability on the same capacity for overlapping periods requires explicit clarification. “The cumulative financial burden of dual levy, if not addressed, could render the relief window commercially unviable for a significant number of entities,” said Pabba.
Developers say the final procedure should clarify whether milestone extension charges and mismatch charges can apply simultaneously, and whether an adjustment mechanism will be available when both levies arise from the same delay period.
Developers Seek Transmission Accountability
Pabba recommended five changes before CERC finalizes the procedure: causation-based differentiation, symmetric accountability for CTU and renewable energy implementing agencies, a more gradual COD charge escalation curve, a tiered or capped milestone extension charge structure for smaller developers, and clarity on the overlap between milestone extension charges and mismatch charges.
Developers argue that milestone extension charges are necessary but not sufficient. For the framework to be truly effective and equitable, it must be accompanied by a symmetric accountability mechanism on the transmission side, clear timelines and consequence frameworks for the Central Transmission Utility during substation commissioning, and a structured force majeure carve-out that distinguishes developer-attributable delays from systemic, externally driven ones.
The developers also said that any connectivity capacity freed up through stricter milestone compliance or revocation should be reallocated efficiently to serious applicants, including green hydrogen developers with demonstrable project readiness. Since green hydrogen developers are not permitted to obtain ISTS connectivity for associated renewable projects solely on the basis of a letter of award (LoA) for green hydrogen production, such developers must either use a valid power-procurement LoA/PPA route or apply through the land/land-bank guarantee route under the GNA Regulations.
Allowing eligible and prepared green hydrogen projects to access freed-up transmission capacity through these routes could support better utilization of scarce connectivity capacity while advancing India’s green hydrogen targets.

Developers Flag Risks in CERC’s Network Access Delay Charges Proposal

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