Positive Policy

Highlights of the Green Energy Open Access Rules, 2022

At the 15th Annual Solar Power in India conference organised by Re­ne­wable Watch, a developer in the commercial and industrial (C&I) solar segment with experience in both captive and open access projects remarked that their portfolio may most likely double if the government avoids placing too ma­ny regulations in the segment. This has been a persistent concern in the segme­nt. In fact, the stakeholders had lost ho­pe that a positive change would happen. But on June 6, 2022, the Ministry of Pow­er (MoP) re­sol­ved the woes of developers by notifying the Electricity (Pro­mo­ting Renewable En­ergy Through Gr­e­en Energy Open Acc­ess) Rules, 2022. Th­e­­se rules are notified for promoting generation, purchase and consumption of green energy including energy from waste-to-energy plants.

A key highlight of the rules has been the reduction of capacity limit for taking the open access route. In addition, the ca­pacity limit has been removed for captive consumers. This seems to be the primary policy change that has been recei­v­ed well by the industry. Furthermore, the notified ru­les enable a simplified procedure to take the open access route for procuring renewable energy. The in­dustry expects that the rules will enable fa­ster approval of green open access, un­i­form banking, voluntary purchase of renewable power by C&I consumers, etc.

 

  • Green open access is allowed to any consumer and the limit of an open ac­cess transaction has been reduced from 1 MW to 100 kW for green energy to enable small consumers to purchase renewable power through open access.
  • Certainty of open access charges to be levied on green energy open access co­n­­sumers. These include transmissi­on charges, wheeling charges, cross-subsidy surcharge and standby char­ges. There is a cap on the increase of cross-subsidy surcharge as well as the re­mo­val of additional surcharge, whi­ch will not only incentivise consumers to go green but also address the issues that have hindered the gro­wth of open acc­ess in India.
  • Transparency in the approval process of the open access application has be­en provided for. Under these rules, approval is to be granted within 15 days or else it will be deemed to have been approved subject to the fulfilme­nt of technical requirements. Also, ap­pro­vals will be through a national portal. The rules are expected to str­ea­m­­line the overall process for granting op­en ac­cess by ensuring timely app­roval and improving predictability of cash flows for renewable power producers. It will also bring uniformity in the application procedure.
  • The tariff for green energy will be determined separately by the appropriate commission. The tariff will comprise the average pooled power purchase cost of renewable energy, cross-subsi­dy char­g­­es if any, and service char­ges covering the prudent cost of the distribution licensee for providing the green energy to consumers.
  • Banking of surplus green energy with the distribution licensee has been ma­ndated.
  • There will be a uniform renewable pur­chase obligation (RPO) applicable on all obligated entities in the area of the distribution licensee. The rules al­so in­clude green hydrogen/green am­monia for fulfilment of RPOs.
  • Consumers will be given green certificates if they consume green power.
  • Cross-subsidy surcharge and additional surcharge will not be applicable if gr­een energy is utilised for the pro­ducti­on of green hydrogen and green amm­onia.

Industry response

The industry response has been positive to these new rules as their long-standing concerns seem to have been addressed. “We welcome the Electricity (Promoting Re­newable Energy Through Green Open Ac­c­ess) Rules, 2022, notified by the Gov­ernment of India, and feel that they are a shot in the arm for the green power de­ma­nd in the C&I segment. The C&I segment accounts for about 50 per cent of electricity consumption in India and the demand for green energy from this se­gment, especially from open access projects, has been growing rapidly in the last few years. By lowering the threshold for open access from the existing 1 MW to 100 kW, the government has opened the door for this market to grow multifold in the coming few years,” says Ku­sha­gra Nandan, co-founder and managing director, SunSource Energy.

According to Nandan, the notification of a central nodal agency for setting up and operating a single-window green energy open access system for renewable energy is likely to lead to a simplified and sm­ooth centralised approval process for developers. It is also likely to open up the market in many more states. The rules will benefit the renewable energy business in the country. There will be better tariff visibility that will reduce re­gulatory uncertainty. Now, the focus sh­ould be on actual implementation and acceptance by the states. N

GET ACCESS TO OUR ARTICLES

Enter your email address