In a bid to support small consumers’ access to renewable energy sources, the Indian Ministry of Power has made significant amendments to the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules. These rules were initially introduced in June 2022, and they have seen subsequent updates in January 2023 and May 2023. The latest amendment, titled the Electricity (Promoting Renewable Energy Through Green Energy Open Access) (Second Amendment) Rules, 2023, introduces key changes aimed at promoting a shift towards green energy.
Two notable changes in the latest amendment are the revision of the eligibility criteria for open access, and the addition of offshore wind projects to the energy source. Under the new provisions, consumers with an aggregate demand of a minimum of 100 kW (kilowatt), spread across multiple connections in the defined operating area, can pool their demand for open access to green energy sources. This means that both single consumers and those with multiple connections become eligible for accessing renewable energy through open access.
Previously, the June 2022 notification had stipulated that consumers with a load of 100 kW were eligible for open access but did not specify whether it applied to single consumers or those with multiple connections. Additionally, the 2022 notification reduced the minimum energy requirement for purchasing green energy through open access from one MW to 100 kW. This change aimed to enable smaller commercial and industrial entities with lower energy needs to opt for renewable power.
The Ministry’s latest amendment is expected to have a positive impact on smaller consumers, such as Micro, Small, and Medium Enterprises (MSMEs), commercial consumers, and large households, empowering them to transition towards greener energy alternatives. For instance, telecom towers operating in a specific area can collectively pool their power requirements to reach the 100 kW threshold for accessing renewable electricity through open access, leading to cost savings. Similarly, multiple bank branches or retail stores within a defined territory can also benefit from this policy.
However, despite the positive changes, some challenges remain. Additional charges introduced in the 2022 notification, such as banking, transmission, wheeling, and standby charges, have the potential to increase the cost of accessing green power. These charges may render the open access policy unviable for certain consumers, particularly those receiving electricity through low-voltage transmission lines (11 kV consumers) in residential areas.
Moreover, the implementation of the amended rules faces potential bottlenecks at the state level. While the central open-access rules serve as guidelines, it is up to the states to execute them on the ground. Some state distribution companies (discoms) may be hesitant to promote open access to large commercial consumers, as the revenue generated from these consumers often subsidizes electricity tariffs for low-income and agricultural consumers.
Despite these challenges, commercial and industrial consumers are showing increasing interest in purchasing electricity directly from renewable energy generators through open access. This interest is driven by financial benefits, competitive or cheaper tariffs, and their commitment to decarbonization goals, as articulated in their Environmental, Social, and Governance (ESG) frameworks.
The recent amendment also includes provisions to promote offshore wind energy. It extends the waiver of surcharges to electricity generated from offshore wind farms commissioned between 2025 and 2032, encouraging investment in the offshore wind sector. Additionally, the Ministry has approved a 100% exemption on Inter-State Transmission System Charges for offshore wind projects commissioned by December 2032, valid for 25 years. Although India currently lacks installed offshore wind capacity, plans to bid out 37 GW by 2029-30 demonstrate the country’s commitment to tapping the potential of this clean energy source.
Overall, the latest amendments to the Green Energy Open Access Rules are expected to bolster the adoption of renewable energy sources, particularly among smaller consumers, and promote India’s transition to a greener and more sustainable energy future.
Source: Mongabay News