The Central Electricity Regulatory Commission (CERC) has rejected a petition seeking relief from the submission of individual Connectivity-Bank Guarantee 2 (Conn-BG2) for projects utilizing shared transmission infrastructure. The Commission upheld the requirement under the GNA Regulations that every connectivity applicant must independently furnish financial security, ruling that a single guarantee from a lead generator does not exempt secondary project SPVs from providing project-specific security.
CASE BACKGROUND: SHARED CONNECTIVITY AT KALYANPUR POOLING STATION
The regulatory dispute involved wind power developers Enfinity Global Clean Energy, EG Solaire Power, and EG Pavan Surya Power, who are developing three separate 100 MW wind power projects in Gujarat. These projects were granted in-principle connectivity to the interstate transmission system (ISTS) through a common 220 kV terminal bay at the Kalyanpur Pooling Station.
At the time of the initial in-principle grant, the Central Transmission Utility of India Limited (CTUIL) had recorded a “NIL” requirement for Conn-BG2 for EG Solaire Power and EG Pavan Surya Power. This was predicated on the fact that Enfinity Global Clean Energy, as the lead generator, had already submitted a ₹3 crore bank guarantee, which was then perceived as sufficient to secure the shared physical asset.
However, following the implementation of the Third Amendment to the CERC (Connectivity and General Network Access to the Inter-State Transmission System) Regulations, 2022, effective September 9, 2025, the regulatory framework was modified. On December 5, 2025, CTUIL issued notices to EG Solaire Power and EG Pavan Surya Power directing each to furnish an individual ₹3 crore Conn-BG2. The developers challenged these notices, contending that the lead generator’s guarantee fully secured the infrastructure and that additional mandates constituted over-collateralization and a retrospective application of the amendment.
THE CERC RULING AND REGULATORY RATIONALE
In its order dated July 7, 2026, the CERC rejected the developers’ petition, establishing the following regulatory principles:
- Application of Regulation 37.10(b): The Commission ruled that transitional provisions require all connectivity applications pending at the in-principle stage to comply with the revised regulatory framework. Because the petitioners had not finalized or completed the bank guarantee submission process before the Third Amendment took effect on September 9, 2025, they were bound by the updated requirements.
- Financial Security vs. Construction Cost: The Commission clarified that Conn-BG2 is a standard financial security mechanism rather than a direct reimbursement for the physical construction cost of a terminal bay. The guarantee serves to mitigate “per applicant risk,” ensuring financial assurance against project-specific defaults.
- Standard Benchmark: The ruling emphasized that the guarantee amount (₹3 crore for 220 kV bays) is a regulatory benchmark for financial assurance. Therefore, requiring individual guarantees from every entity sharing a bay does not constitute “unjust enrichment” or “over-collateralization,” as the risk is assessed per applicant rather than per physical asset.
TECHNICAL AND REGULATORY IMPACT
The CERC decision reinforces strict compliance standards for the renewable energy sector:
- Mandatory Individual Guarantees: Developers must provide individual bank guarantees for every project sharing a transmission bay. Shared infrastructure does not exempt secondary projects from the standard benchmark guarantee requirements.
- Strict Submission Timelines: Under Regulation 8.2(c), Connectivity Bank Guarantees (Conn-BG1, BG2, and BG3) must be submitted within one month of the intimation of the in-principle grant. Failure to adhere to this timeline results in the automatic closure of the connectivity application and the forfeiture of application fees.
- Consequences of Non-Compliance: The severity of these timelines was demonstrated in Petition No. 89/MP/2025 (Tata Power Renewable Energy Limited vs. CTUIL), where an inadvertent four-day delay necessitated a formal condonation plea to prevent application closure.
- Queue Integrity: The ruling affirms the principle of post-grant finality. Per the precedent in Project Nine Renewable Power Private Limited vs. CERC, the regulatory framework does not support the shifting or reallocation of connectivity between substations post-grant, as the priority system is strictly determined by application timestamps.
OFFICIAL SOURCES & CITATIONS
- CERC Order in Petition No. 89/MP/2025 (Tata Power Renewable Energy Limited vs. CTUIL)
- CERC Connectivity and General Network Access (GNA) Regulations, 2022 and Third Amendment (2025)
- Petition under Sections 79(1)(c) and (f) of Electricity Act 2003 (Avaada Energy Private Limited)
- CERC Rejects Renewable Energy Firms’ Plea Against Separate Bank Guarantees For Shared Grid Connectivity – WindInsider
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