Petition with the CERC (Procedure, Terms and Conditions for Grant of Transmission Licence and other related matters) Regulations to Navinal Transmission Limited – EQ

Summary:

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## **1. Background and Objective of the Petition**

Navinal Transmission Limited (NTL) filed a petition before the Central Electricity Regulatory Commission (CERC) seeking a transmission licence under Sections 14, 15 and 79(1)(e) of the Electricity Act, 2003.
The objective: **to establish an Inter-State Transmission System (ISTS)** for the **Network Expansion Scheme in Navinal (Mundra), Gujarat** required for drawal of power for bulk consumers, distribution licensees, and potential green hydrogen/ammonia facilities.

The scheme will be developed on a **BOOT (Build-Own-Operate-Transfer)** basis.

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## **2. Scope of the Transmission Project**

The project includes major infrastructure components such as:

* Establishment of a **765/400 kV GIS substation** at Navinal with **4×1500 MVA ICTs**, bus reactors, line bays, and provisions for future expansion.
* **LILO of Bhuj-II – Lakadia 765 kV D/C line** at Navinal.
* Installation of **switchable line reactors**.
* Associated GIS diameter completions and multiple provisions for future load, including green hydrogen/ammonia integration.

Scheduled COD: **21 months from effective date (14 July 2026)**.

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## **3. Selection of Developer Through Tariff-Based Bidding**

PFC Consulting Ltd. (PFCCL), as Bid Process Coordinator, ran the competitive bidding.
**Adani Energy Solutions Limited (AESL)** emerged as the **winning bidder**, quoting annual transmission charges of **₹2987.14 million/yr**, and thus took over the SPV (NTL).

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## **4. Public Notice and Initial Procedural Compliance**

CERC issued a public notice inviting objections; **no objections were received**.
The Commission then examined the project readiness, technical requirements, and compliance with applicable regulations, including **2024 Transmission Licence Regulations**.

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## **5. Key Issue: Responsibility for Cost of Augmentation Under Regulation 12.5**

A central question that arose:

### **Who should bear the cost of necessary ISTS augmentation (ICTs, bays, connectivity infrastructure)?**

CTUIL submitted that, as per **Regulation 12.5**, bulk consumers and distribution licensees seeking direct ISTS connection must pay for:

* The dedicated line to ISTS, AND
* Necessary augmentation (e.g., ICTs & associated bays) required to integrate them.

Entities involved included:

* **MPSEZ Utilities Ltd. (MUL)** – distribution licensee
* **Kutch Copper Ltd. (KCL)** – bulk consumer
* **Mundra Petrochem Ltd. (MPL)** – bulk consumer

These entities had significant GNA/GNARE allocations but argued that they should not be required to submit **Conn-BG2** or bear augmentation costs.

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## **6. Arguments by Bulk Consumers (KCL & MPL)**

KCL and MPL strongly opposed CTUIL’s demand for a **Conn-BG2**, arguing:

* GNA Regulations do **not** mandate Conn-BG2 for bulk consumers.
* Imposing Conn-BG2 would **blur distinction** between “connectivity” (for generators) and “GNA” (for bulk consumers).
* Would lead to **discrimination** against bulk consumers applying directly vs. through STU.
* They have already invested **thousands of crores**, so concerns of “non-serious” applicants are baseless.
* Any such requirement would require a **formal amendment** to GNA Regulations — not a judicial order.

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## **7. CTUIL’s Rebuttal and Planning History**

CTUIL clarified that:

* The scheme was **originally** planned **solely for bulk consumer load** (4000 MW).
* Later, MNRE shared potential green hydrogen/ammonia demand, **not actual applicants**, causing the project to evolve into an ISTS common scheme.
* However, **Regulation 12.5 still applies**—bulk consumers must bear augmentation costs.
* To prevent stranded ISTS investment if bulk consumers withdraw GNA later, **security mechanism (BG)** is necessary.

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## **8. CERC’s Analysis and Findings**

CERC conducted a detailed review of:

* GNA Regulations
* Multiple CMETS-WR and NCT meeting deliberations
* Historical planning documents
* Legal interpretations raised by parties

CERC’s conclusions:

### **A. Regulation 12.5 is unambiguous**

Bulk consumers & distribution licensees seeking direct ISTS connectivity **must bear the cost of necessary augmentation**.

### **B. Immediate Augmentation Costs Must Be Paid**

ICTs and associated bays at the ISTS substation constitute necessary augmentation and must be paid for by the beneficiaries proportional to their GNA/GNARE.

### **C. To safeguard ISTS investments:**

Bulk consumers must deposit the proportional cost of ICTs and bays.
If they fail to pay within 30 days, **their GNA/GNARE will be cancelled**.

### **D. CTUIL must calculate exact cost per entity**, based on up-to-date cost data or NCT guidance.

### **E. No merit in claims of discrimination or improper regulatory interpretation** by KCL/MPL.

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## **9. Final Order of the Commission**

CERC **grants** the transmission licence to **Navinal Transmission Limited**, subject to key conditions:

### **Mandatory Cost Contribution by GNA/GNARE Grantees**

* Bulk consumers & discoms must deposit ICT-related augmentation costs in proportion to their GNA.
* CTUIL will notify exact payable amounts.
* Non-payment = GNA cancellation + BG actions per GNA Regulations.

### **Financial and Operational Conditions**

* Licence valid for **25 years**.
* Must comply with:

* 2024 Transmission Licence Regulations
* CERC Grid Code
* Performance Standards
* CEA technical standards
* Must provide **non-discriminatory open access**.
* No electricity trading allowed.

### **Monitoring**

CTUIL, Independent Engineer, and CEA will monitor progress and report deviations to CERC.

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