CERC Clears Path for Renewable Developers on Source Changes, SPV Compliance

Renewable energy companies often complain of red tape slowing down their projects. Now, India’s power regulator has stepped in with a ruling that could make their lives easier.

The Central Electricity Regulatory Commission (CERC) has told the Central Transmission Utility of India (CTUIL) to show more flexibility when developers want to tweak their projects or route compliance paperwork through a subsidiary company.

The Case

The order came after a tussle involving Avaada Energy. The company had secured connectivity for a 50 MW hybrid project (half solar, half wind) in early 2024. But within days, it landed a contract to build a 50 MW wind-only project. To move ahead, Avaada needed CTUIL’s nod to switch its renewable source — something the utility sat on.

Adding to the complications, Avaada floated a special purpose vehicle, Avaada GJClean, to execute the project and sign the power purchase deal with Damodar Valley Corporation. This raised a fresh hurdle: could the land and financing documents be submitted in the subsidiary’s name when the parent held the connectivity?

What CERC Decided

On the source change, CERC said the rules do allow developers to switch from one renewable source to another, as long as CTUIL checks the grid impact. It directed the utility to process Avaada’s application within 30 days.

On the compliance documents, the Commission pointed out that CTUIL had already accepted the land papers in the subsidiary’s name. It ruled that the same approach should apply to financial closure documents too. “Project papers should be in the name of the company actually building the project, even if the parent got the connectivity,” the Commission said.

Bigger Picture

The Delhi High Court had earlier shielded Avaada from punitive action by CTUIL while the matter was pending. With this order, CERC has wrapped up both petitions, offering developers greater certainty.

For India’s fast-growing renewable sector, the ruling signals a practical approach: regulators recognising that projects often evolve — whether through technology shifts or new subsidiary structures — and that the rules must adapt too.