India’s electricity market regulator, the Central Electricity Regulatory Commission (CERC), has issued a suo motu order introducing a one-time mechanism to release interstate transmission connectivity reserved for renewable energy projects that received Letters of Award (LoAs) but failed to secure power purchase agreements (PPAs).
The move could make up to 15.7GW of grid connectivity available for other developers, according to the commission.
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The order addresses projects that obtained connectivity under the General Network Access (GNA) Regulations, which set rules for grid access, using LoAs issued by Renewable Energy Implementing Agencies (REIAs), including SECI, NHPC, NTPC and SJVN.
The framework allowed developers to seek transmission connectivity before signing PPAs on the assumption that the LoAs would subsequently culminate in the signing of PPAs and power sale agreements (PSAs).
However, CERC said many projects did not progress because buyers failed to sign PSAs, leaving transmission connectivity reserved for projects that did not reach commercial operation.
According to data analysed by the commission, REIAs issued LoAs for 40.42GW between 2019 and June 2025, while PPAs were signed for only 2.34GW. LoAs granted to projects without signed PPAs totalled 22.05GW of capacity, of which around 15.7GW could be released or utilised under the new mechanism.
The Commission has introduced three optional pathways for affected developers. They may retain their connectivity while exiting the LoA route and pursue project development through another eligible route, substitute the original LoA with a PPA signed under another LoA, or voluntarily surrender the connectivity.
Developers may also choose not to opt for any of the pathways and continue to be governed under the existing GNA Regulations.
CERC said it was relaxing provisions of the GNA Regulations under its powers to remove obstacles to securing grid connections and issuing the mechanism under its suo motu powers to ensure better utilisation of scarce interstate transmission infrastructure.
The commission added said the objective is to prevent transmission capacity from remaining stranded and enable projects with firm contractual arrangements to access the interstate transmission system more efficiently.
The order follows recommendations from the Ministry of Power, which proposed a one-time measure for legacy LoA-based projects where PPAs and PSAs had not been executed. It also follows multiple rounds of stakeholder consultation, including a staff paper, a draft order and a public hearing.
Earlier this month, Indian credit rating agency ICRA said the country’s power transmission sector is entering a multi-year investment cycle, with capital expenditure expected to reach INR5-6 trillion (US$52-62 billion) between FY2027 and FY2032. The spending will support grid expansion and new transmission corridors to integrate more than 900GW of non-fossil fuel capacity by 2035-36, although land acquisition and right-of-way challenges continue to delay projects and contribute to renewable energy curtailment.
