Power and New & Renewable Energy Minister RK Singh on Tuesday exhorted the industry to come out with clean energy transition plans with the government notifying the green energy open access rules. Industries account for almost 50 per cent of India’s power consumption.
The Government, on Monday, notified the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022, which allow consumers with a sanctioned load of 100 kilowatt (kW) to purchase power directly from renewable energy (RE) producers. There will be no load limit for captive consumers.
“Now, I call upon the industry and industry associations to start announcing transition to green. Most large industries have expressed an interest in going green. Open Access will make it possible,” Singh told reporters here.
Open access
The Minister pointed out that government has done away with hurdles that impacted the availability of RE for both household and industry. Emphasising on the efforts made by the Ministry to make open access more consumer-friendly, Singh said that earlier, if an industry player wanted to set up capacity or procure capacity or enter into PPAs to purchase RE, open access was a hurdle. Now, open access will be provided in 15 days, or else, it will be deemed to have been provided.
“Another hurdle was an inflated surcharge and additional surcharge, making it expensive. We have said that additional surcharge will not be levied and the surcharge will be equal to the common level of surcharge in the State, and it will not be more than the surcharge prescribed in Tariff Policy, which is 20 per cent. They cannot increase surcharge also by more than 50 per cent in 12 years,” Singh said.
Elaborating on the features, the Minister said it is not necessary that a consumer must set up the capacity. One can ask the developer to set up capacity or it can hold a bid for the lowest tariff. After open access rules, all captive power plants (CPPs) can gradually shift to green energy, because RE will be cheaper. Also, for captives, no surcharge will be levied.
The rules provide certainty on charges to be levied which include transmission charges, wheeling charges, cross-subsidy surcharge and standby charges. The tariff for green energy will be determined separately by the Appropriate Commission, which shall comprise the average pooled power purchase cost of the RE, cross-subsidy charges, if any, and service charges covering the prudent cost of Discom for providing green energy.
‘A shot in the arm’
Welcoming the notification, SunSource Energy Managing Director Kushagra Nandan said, it is a shot in the arm for green power demand in the commercial and industrial (C&I) segment.
“By lowering the threshold for open access from the existing 1 MW to 100KW, the government has opened the door for this market to multiply multi-fold in the coming years,” he added.
Notifying a central nodal agency for setting up and operating a single-window green energy open access system for RE is likely to lead to a simplified and smooth centralised approval process for the developers. It is also likely to open up the market in many more States, Nandan said.