Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules 2022

Subject: Economy

Section :Infrastructure

Context:

The Government 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.

Green energy Open access:

The government has done away with hurdles that impacted the availability of RE for both household and industry.
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. The 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 percent.
States cannot increase surcharge by more than 50 per cent in 12 years.
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-sub- sidy 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-sub- sidy charges, if any, and service charges covering the prudent cost of Discom for providing green energy.

Importance of new rules under open access

It will influence green power demand in the commercial and industrial (C&I) segment.
By lowering the threshold for open access from the existing 1 MW to 100 KW, the government has opened the door for the market to multiply multi fold in the coming years.
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.