Private developers and other power sector stakeholders have raised concerns over proposals by the Central Electricity Regulatory Commission (CERC) to revamp the framework for granting transmission connectivity to future renewable energy projects.In a staff paper released on November 25, the regulator proposed that future transmission connectivity be granted only against signed power purchase agreements (PPA), instead of Letter of Awards (LoAs) for efficient utilisation of transmission infrastructure. It has alternatively suggested an auction-based mechanism for allocating connectivity, coupled with firm commissioning timelines. Letter of Awards is an official letter issued to a successful bidder confirming the formal award of a project, contract, or allocation of capacity following a competitive bidding process.However, private developers, industry bodies, and REIAs have flagged concerns over the proposed changes, citing potential implications for project execution, tariffs and market competition.The proposals come against the backdrop of around 31.8 gigawatts (GW) of renewable capacity that has already been granted connectivity but is yet to secure PPAs, leading to underutilisation of transmission infrastructure.Lack of PPA signing is becoming a major hurdle in India’s renewable energy sector, with at least 42 GW of RE capacity still without PPAs. In November, rating agency ICRA maintained that the decline in project award and delays in signing PPAs for large RE capacity “reflects the concerns on execution related to available transmission connectivity for the RE sector.”Typically, developers secure LoAs from Renewable Energy Implementing Agencies (REIAs) — such as SECI, NTPC, SJVN and NHPC — which act as intermediary procurers by buying power from generators through long-term PPAs and selling it to end buyers through back-to-back power sale agreements (PSAs). Developers often begin project execution only after PPAs are signed, and delays in PPA execution therefore leave connectivity granted at the LoA stage underutilised.If implemented, the proposals would mark a significant departure from the existing framework under the General Network Access (GNA) regulations, which currently allow renewable projects to secure connectivity through multiple routes — including on the basis of LoAs or PPAs, partial land acquisition, or bank guarantees furnished in lieu of land documents.Story continues below this adIn their submissions to the regulator between December 24 and 27, stakeholders cautioned that the proposals could create new challenges, including higher tariffs due to dual auctions, concentration of connectivity with financially stronger players, difficulties for intermediary procurers, and limited accommodation for merchant power as well as captive and industrial renewable energy projects.REIAs flag PPA-linkageTwo REIAs — Solar Energy Corporation of India (SECI) and National Hydro Power Corporation (NHPC) — in their comments to the CERC opposed the proposal that suggested connectivity be granted to RE projects only against signed PPAs.In its submissions, NHPC said the proposal would make it “unfeasible” to develop RE Projects through REIAs. Signing a PPA requires an assured buyer for power. Therefore, PPAs between REIAs and developers are signed after the signing of PSAs between REIAs and buying entities.NHPC said if connectivity is not granted at the LoA stage, there will be no clarity on when a project can be commissioned. While the scheduled date of commercial operation (SCOD) under the Request for Selection (RfS), LoA or PPA is usually set at 24 months from the signing of the PPA, the actual start date of transmission connectivity would remain uncertain.Story continues below this ad“But, due to no visibility on the availability of connectivity for the projects for which LoA have been issued, Buying entities would not be in a position to take decision on providing consent for PSA,” the company said in its submissions.SECI said that in the absence of clarity on the location of transmission connectivity and the corresponding land, it would be difficult to accurately assess project costs and timelines, which could hit participation in bids. It added that discoms would also want certainty on project timelines before signing PSAs, and suggested that a suitable mechanism be worked out to address these issues.The National Solar Energy Federation of India (NSEFI) said PPA signing is “administratively fluid” and often delayed by factors beyond a developer’s control. “Making this the criterion turns connectivity allocation into a “bureaucratic race” rather than a merit-based system, disadvantaged developers who won bids earlier but faced administrative bottlenecks,” it added.It also flagged “double-auction risk” in case of an auction mechanism for future connectivity. “The “connectivity premium” paid in an auction is a sunk cost that will inevitably raise the final renewable energy tariff, defeating the national goal of affordable green power,” NSEFI said in its submissions.Story continues below this adThe Indian Wind Turbine Manufacturing Association (IWTMA), meanwhile, maintained that while shifting to a PPA-only eligibility criterion could help curb speculative blocking of transmission bays, it risks excluding emerging business models which often cannot secure long-term PPAs at the outset. These include merchant power, captive, commercial and industrial (C&I) models, as well as open-access and storage-linked projects.Queries were sent to the Ministry of New and Renewable Energy, NHPCL, SECI, and the industry bodies and companies mentioned in this report. However, responses were not received till the time of publishing this report.Industry pushback on auction mechanismSeveral private developers raised concerns over the proposal to grant future grid connectivity exclusively through an auction mechanism, arguing that it fails to address core structural issues in the sector.In its submission, Adani Green Energy said auctions do little to resolve persistent delays in transmission planning, augmentation and commissioning. “The sector is witnessing the challenge of delayed transmission capacity planning, augmentation and commissioning. Adopting an auction mechanism in no way addresses such concerns,” the company said. It also flagged risks related to cost recovery and cost escalation under an auction-based framework.Story continues below this adJindal India Renewable Energy said that a twin auction structure — one for project award and another for connectivity — would ultimately push tariffs higher. Torrent Green Energy echoed similar concerns, cautioning that an auction-only approach could impose a “double financial burden” on renewable energy projects, adversely impacting their viability. “The auction process can create stranded PPAs without connectivity and stranded connectivity without PPAs, defeating the intended objective,” the company said in its submissions.Tata Power, too, opposed the auction mechanism for future connectivity, describing the underutilisation of transmission lines due to delayed signing of PPAs as a “momentary” issue. It said transmission infrastructure typically takes three to four years to develop, while most renewable energy projects are expected to get commissioned within 24 months. “There cannot be a prior presumption that transmission is a ‘scarce’ resource. Instead, adequate and appropriate administrative and regulatory measures should be undertaken to ensure that transmission is available on time,” Tata Power said in its submissions.ACME Solar Holdings, meanwhile, cautioned that auctioning connectivity could lead to its monopolisation by financially stronger entities, without necessarily ensuring timely project execution or optimal grid utilisation. “Such an approach could adversely impact sectoral diversity, limit competition, and discourage innovation by smaller and emerging developers who contribute meaningfully to the renewable energy ecosystem,” it added.