CERC Proposes Third Amendments To Enhance Inter-State Transmission And GNA Regulations

Introduction

The Central Electricity Regulatory Commission (CERC) has released a draft notification on 31st July 2024, proposing the third amendment to the Connectivity and General Network Access (GNA) to the inter-State Transmission System (ISTS) Regulations, 2022.[1] The proposed amendments are a crucial step in refining the existing regulatory framework to better support India’s evolving electricity transmission needs, particularly as renewable energy generation continues to grow. The amendments aim to enhance coordination, streamline processes, and introduce greater flexibility in the regulatory system.

Explanation (Key Points)

• The draft notification introduces a variety of new definitions, processes, and clauses, designed to optimize the management of India’s inter-State transmission system. Among the most notable changes is the concept of a “Complex of ISTS substations” or a “Cluster of ISTS substations.” This refers to groups of ISTS substations, which are geographically close and planned by the Central Transmission Utility (CTU) to improve transmission network coordination and planning. By introducing this concept, the amendments seek to promote better organization and more strategic placement of infrastructure.
• One of the significant revisions pertains to the withdrawal process for Connectivity or GNA applications. The amendments clearly define conditions under which applicants can withdraw their requests and how their Bank Guarantees (BGs) will be treated in various scenarios. For example, if an application is withdrawn before the in-principle grant of Connectivity or GNA, 50% of the application fee will be forfeited, while the remaining amount, along with the BG, will be refunded within 15 days. The notification also accounts for partial withdrawals and specifies conditions under which these will be accepted. This clarification provides greater transparency and certainty for applicants, thereby reducing potential disputes.
• A key focus of the draft notification is the facilitation of connectivity for Renewable Energy Generating Stations (REGS). Under the amendments, REGS with installed capacities of 5 MW and above will now be able to apply for connectivity to the Bhakra Beas Management Board (BBMB) transmission network. This application must be accompanied by a system study conducted by the State Load Dispatch Centre (SLDC). For smaller REGS, those with capacities under 5 MW, direct application to the BBMB SLDC is possible, and the approval will be forwarded to the Nodal Agency for records. This move underscores the commission’s recognition of the growing importance of renewable energy in the national grid and seeks to smooth the path for their integration.
• Phased Connectivity applications for Renewable Power Park Developers are another notable addition to the regulatory framework. Developers authorized for more than 500 MW can now apply for Connectivity in stages, starting with an initial 500 MW and subsequently in increments of 50 MW or more. This provision offers more flexibility for developers, allowing them to align their connectivity requirements with their project development timelines.
• Further amendments address land requirements for REGS applications, stipulating that the required quantum of land per MW will be periodically updated on the CTU’s website based on feedback from stakeholders and technological advancements. This ensures that land-use requirements reflect the latest standards and practices, providing clarity to developers while accommodating industry evolution.
• The amendment also revises the procedures for the submission and forfeiture of BGs. New types of guarantees, Conn-BG1 (Rs 50 lakhs) and Conn-BG2 (covering the cost of augmentation, terminal bays, and associated works), are introduced. These guarantees must be furnished within a month of the in-principle grant of Connectivity. Failure to do so will result in the application’s closure and the forfeiture of associated fees.
• Additionally, the notification outlines new timelines for processing and approving Connectivity applications. The Nodal Agency must provide a timeline for the completion of augmentation and firm dates for Connectivity within six months of receiving the necessary BGs. Any delays must be communicated to the applicant and the Central Commission, alongside a revised timeline, ensuring transparency and accountability in the process.

Conclusion

The third amendment proposed by CERC to the Connectivity and GNA regulations reflects the commission’s ongoing efforts to streamline and enhance India’s inter-State electricity transmission system. By refining the processes, introducing greater flexibility for renewable energy integration, and improving coordination and planning, these amendments aim to ensure the regulatory framework can adapt to the rapid changes occurring in the power sector. As the amendments are currently open for stakeholder feedback, the final regulations will likely benefit from collaborative input, making them more robust and aligned with India’s long-term energy transition goals.

[1] https://www.cercind.gov.in/2024/draft_reg/DR-GNA-Regulations-3rd-Amendment.pdf