The Central Government have notified Electricity (Promoting Renewable Energy
Through Green Energy Open Access) Rules, 2022 for purchase and consumption of
green energy including the energy from Waste-to-Energy plants.
Open access means non-discriminatory access to the electricity transmission and
distribution system provided to eligible consumers, generators and state
distribution companies (DISCOMS).
So far, DISCOMs have imposed heavy non-tariff barriers in the form of
operational constraints and state Electricity Regulatory Commissions (ERCs) have
approved tariff barriers in the form of cross-subsidy surcharge, additional
surcharge, wheeling charge, standby charge, etc. on consumers seeking to avail
open access. This makes availing open access uneconomical.
National Electricity Policy, 2005 (NEP) states that state ERCs need to provide a
facilitative framework for non-discriminatory open access as this would provide
efficient choices in locating generation capacity and encourage trading of
electricity for optimum utilization of generation resources, thus reducing the
cost of electricity supply.
Key features of green energy open access rules are:
Positive points of the rules
- Eligibility criteria:
The rules include consumers with a load of 100 kW or more to be eligible for
buying renewable power through open access. Most states at present have the
minimum eligibility criteria for sanctioned load set at 1 MW or above.
Bringing down the load requirement will help in increasing the renewable
demand while giving additional options to smaller consumers to buy green
- Modes to meet the renewable purchase obligation (RPO):
The rules stipulate having uniform RPO for all obligated consumers including
distribution utilities, open access consumers and captive consumers. The
obligated entities have the following options to meet RPO:
- Self-generation from renewables in behind-the-meter applications
- Entering into a PPA with a renewable developer
- Green power procurement through distribution utility at a regulated
- Purchase renewable energy certificates (RECs)
- Purchase green hydrogen, etc.
- Approvals and nodal agency:
A single window clearance mechanism with a central nodal agency is proposed.
All applications for green open access to be approved within 15 days.
Currently the approval process and timelines vary by state and contract
Banking of unutilized electricity up to 10% of total consumption from
renewable projects to be allowed and settlement to happen monthly. At
present, banking regulations vary by state with some states moving to not
allow banking facility for open access projects.
- Regulatory charges:
The rules stipulate limiting the cross-subsidy surcharge (CSS) and removing the additional surcharge (AS) for renewable open
access. Forum of regulators to decide a common methodology for calculation of
open access charges.
The Rules, will allow consumers with a sanctioned load of 100 kW or above to
purchase electricity directly from the renewable power producers (RPPs) without
having to rely on power distribution companies (DISCOMs). Open access as
introduced by the Electricity Act, 2003 to promote competition in the market by
providing a choice of suppliers to the consumers.
But owing to the various
charges imposed for sourcing electricity through this route, the open access
system could not establish itself as an economically viable option for the
consumers. By introducing provisions to limit the increase of cross-subsidy
surcharge as well as the removal of additional surcharge, the Rules not only incentivise the consumers to go green but also seek to address the issues that
have hindered the growth of open access in India.
When open access consumers keep switching on and off from open access, DISCOMs
face challenges in estimating demand forecast thus leading to potential security
challenges for the electricity grid. To ensure that there is no high variation
of demand in the energy to be purchased by the DISCOM, the Draft Open Access
Rules state that reasonable conditions such as requirement of a minimum number
of time blocks during which the open access consumer will not change the quantum
of power consumed can be imposed.
The enactment of the rules will now result in a jurisdictional tussle between
the Centre and the state governments as the responsibility of formulating rules
relating to open access in states have been vested with the respective state
electricity regulatory commission (SERC). Each state has its own open access
regulations and any conflict between the provisions of the Rules (when enacted)
and the state-specific open access regulations may eventually lead to
implementation issues for the Rules. Owing to the concurrent jurisdiction of the
Centre and the state governments, there is, therefore, a need for consistent
policies to achieve the intended goal of promoting open access in the RE sector.
The Rules represent an attempt to bring uniformity in the open access
regulations. Given the instrumentality of state-level actors in determining
success of open access system, it is imperative that the state governments,
SERCs and DISCOMs are taken on board to ensure that the Rules are implemented in
both letter and spirit. Notwithstanding the earnestness of the Rules,
legislators still have a tough balancing act ahead of them to ensure that the
implementation of the Rules to promote open access system in the RE sector does
not come at the cost of jeopardizing the fiscal viability of the DISCOMs.
Link to the Rules:
What is RPO?
Under Section 86(1) (e) of the Electricity Act 2003 ("EA 2003") and the National
Tariff Policy 2006, Renewable purchase obligation (RPO), is a mechanism by which
the obligated entities are obliged to purchase certain percentage of electricity
from Renewable Energy sources, as a percentage of the total consumption of
Note on Electricity (Promoting Renewable Energy Through Green Energy Open
Access) Rules, 2022
In August 2021, India's Ministry of Power had published draft electricity rules
for promoting renewable energy through open access and asked for comments and
suggestions from all the stakeholders in the energy field. Much recently, the
Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules,
2022 or the #GOAR, as it is popularly called were notified with an aim to
accelerate our country's ambitious renewable energy programmes, with the end
goal of ensuring access to affordable, reliable, sustainable and green energy
The GOAR is a notable piece of law and has been made with a hope to make the
energy market in India both green and sustainable. It is quite well known that
Open access was introduced by the Electricity Act, 2003 to encourage competition
in the energy market by providing a choice of suppliers to the consumers.
However, the heavy non-tariff barriers by the distributors and SERCs had made
this uneconomical and not reliable.
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