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

20 Jun 2022

Following a public consultation process, the Government has issued new rules for promoting renewable energy by providing simplified processes and incentives for open access of green energy.
Partner: : Niharika Puri, Associate: Tinnish Sharma

Background

To boost open access in the renewable energy sector, the Ministry of Power (Ministry) had released the Draft Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2021 (Draft Rules) on 16 August 2021, seeking comments from the public. The Draft Rules received a mixed response from industry stakeholders. The inclusion of green hydrogen and green ammonia for fulfilment of renewable purchase obligations (RPO) (i.e. the obligation to purchase a certain percentage of electricity generated from renewable sources), and the reduction in the sanctioned load/contracted demand limit for grant of open access to transmission and distribution systems were seen as welcome changes. However, distribution licensees (DISCOMs) were skeptical about the adequacy of compensation for revenue losses on account of the expected increased migration to open access.

Subsequently, on 6 June 2022, the Ministry notified the finalised Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022 (Rules) for promoting the generation, purchase, and consumption of green energy. The Rules require state commissions to amend existing regulations, if necessary, to make them consistent with these Rules.

Key aspects

  • Lower load limit requirement for grant of green energy open access

    Under the Rules, the contracted demand or sanctioned load limit for grant of open access has been reduced from 1 MW (as stipulated under the Electricity Act, 2003 (Electricity Act)) to 100 kW for green energy (with no minimum limit being set out for captive consumers). This is a significant and welcome change as such lower limit will enable several smaller electricity consumers, especially MSMEs, to purchase renewable power through open access to improve their green profile while also lowering electricity costs.

  • Simplified application process and timelines

    The Rules bring about considerable ease in applying for and being granted green energy open access. They mandate the setting up of a central nodal agency for operating a single-window green energy open access system through a centralised registry. To facilitate this, a common application form will be prepared and issued by the central nodal agency within 60 days of commencement of the Rules. It shall then be forwarded to the relevant entity responsible for granting open access – i.e. the relevant load despatch centre for short-term open access, and the state or central transmission utility (as the case may be) for medium-term and long-term open access.

    The Rules prescribe a 15 day timeline for approval of each application, failing which, the application will be deemed to have been approved subject to the fulfilment of specified technical requirements. Thus, the Rules provide necessary relief to captive open access consumers, especially in states like Haryana where consumers and generators have faced several challenges in developing captive renewable energy projects due to the DISCOMS’ refusal to grant open access approvals on arbitrary grounds.

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