Land BG To LOA Conversion Denied: CERC Ruling Exposes Gaps In Renewable Energy Connectivity

Posted On - 29 May, 2024 • By - King Stubb & Kasiva

Summary

ACME Cleantech Solutions Private Limited (ACME Cleantech) petitioned the Central Electricity Regulatory Commission (CERC) seeking to convert their connectivity application for a 600 MW solar project from the Land BG route to the Letter of Award (LOA) route. They also requested a partial conversion and a reduction in the Land BG amount. CERC denied the petition due to limitations in the current Connectivity and General Network Access (GNA) Regulations, 2022.[1]

Case Timeline

  • November 29, 2023: ACME Cleantech submitted application number 2200000387 for connectivity on the Land BG route for their 600 MW solar project.
  • December 20 & January 07, 2024: ACME Cleantech requested CTUIL (Central Transmission Utility of India Limited) to convert their Land BG application to LOA route based on separate LOAs received for wind and solar components of a different project. They also sought a partial conversion for the solar component and a reduction in Land BG amount for the remaining capacity.
  • February 19, 2024: CTUIL rejected both conversion requests due to regulations not allowing conversion for applications without granted connectivity and the absence of provisions for partial conversion.
  • Later in 2024: ACME Cleantech petitioned CERC challenging CTUIL’s decision.
  • May 2024: CERC issued a final order denying ACME Cleantech’s petition.

Issue Raised

Can connectivity application on the Land BG route be partially converted to the LOA route under the current GNA Regulations?

Appellant’s Arguments (ACME Cleantech)

  • ACME Cleantech argued they had secured LOAs for separate wind and solar projects, and their connectivity application should be convertible to the LOA route based on these LOAs.
  • They requested a partial conversion for the solar component and a reduction in Land BG for the remaining capacity.

Respondent’s Arguments (CTUIL)

  • CTUIL argued that Regulation 11A(4) of the GNA Regulations only allows conversion for applicants with granted connectivity, which ACME Cleantech hadn’t received for application number 2200000387.
  • They further argued that the GNA Regulations don’t have provisions for partial conversion from Land BG to LOA route.

Judgment

CERC sided with CTUIL, denying ACME Cleantech’s petition. The commission’s rationale for denying ACME Cleantech’s petition to convert their connectivity application rested on two key legal and factual elements:

  • Lack of Granted Connectivity: CERC relied on Regulation 11A(4) of the GNA Regulations, 2022. This regulation explicitly states that only applicants who have been granted connectivity can seek conversion from the Land BG route to the LOA route. In this case, ACME Cleantech’s application (number 2200000387) hadn’t been approved for connectivity yet. While they argued they had secured LOAs for separate wind and solar projects, these LOAs were not relevant to the specific connectivity application under consideration.
  • Absence of Partial Conversion Provision: The commission acknowledged ACME Cleantech’s attempt to find an innovative solution by seeking a partial conversion for their solar component. However, the current GNA Regulations simply don’t have provisions for such a scenario. Converting only a part of the application from Land BG to LOA would create complexities in managing compliance and security deposits for the remaining Land BG portion. CERC likely felt that allowing such a partial conversion without proper regulatory framework could lead to administrative challenges.

Analysis

This case highlights the challenges faced by renewable energy developers due to limitations in the current GNA Regulations. While ACME Cleantech attempted an innovative solution by seeking conversion based on separate LOAs, the regulations lacked the flexibility to accommodate their request.

CERC acknowledged the need for improvement and directed its staff to propose amendments to the GNA Regulations for incorporating provisions for partial conversion of connectivity to a different route. This could potentially benefit future renewable energy projects by offering more flexibility in managing connectivity options. The case also emphasizes the importance of clear communication and adherence to regulations.  ACME Cleantech’s claim of having received connectivity was found to be inaccurate, potentially impacting their petition’s outcome.

[1] https://cercind.gov.in/2024/orders/09-MP-2024.pdf