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Green Open Access Rules 2022 – Boost to Renewable Energy Generation in India?

Ministry of Power, Government of India, notified the new Green Open Access Rules on 6th June 2022.

Open Access (OA) essentially means that a consumer of power is not bound to any particular DISCOM for purchasing power, and can approach any energy supplier of their choice. This access is subject to charges and dues determined by State Electricity Regulatory Commissions (SERCs).

Power Ministry’s Green Open Access Rules, therefore allow Renewable Energy (RE) consumers to obtain power from any RE supplier of their choice. These rules also cover power supplied from waste-to-energy plants.

Major Highlights of Green Open Access Rules 2022

Revised Eligibility Criteria and an Easier Process of Obtaining Open Access

Hitachi energy transformer

As per the new Green Open Access Rules 2022, consumers with a contracted demand or sanctioned load of more than 100 KW are eligible for Green Open Access. This figure was 1 MW in the earlier version of the Green Open Access Rules. This change has been made to enable even small consumers to make a shift to Renewable Energy through open access.

Moreover, the new rules make it easier for a consumer to submit their application for open access (OA), which will be done through a national portal. A central nodal agency will grant Green OA to the consumer within 15 days of application. If permission is not granted before the lapse of this 15-day period, the application will automatically be considered accepted, provided that the necessary technical requirements are met by the consumer.

Renewable Purchase Obligation through Purchase of Green Hydrogen / Green Ammonia

IOCL Green Hydrogen Mathura Refinery
IOCL’s Green Hydrogen Facility at its Mathura Refinery

The new Green Open Access Rules provide for an entity to fulfil its Renewable Purchase Obligation (RPO) through the purchase of Green Hydrogen or Green Ammonia.

The Government introduced its Green Hydrogen / Green Ammonia policy in February 2022, according to which Green Hydrogen / Green Ammonia producers are eligible for Open Access to Renewable Energy.

Clarity on Open Access Charges

The new Green Open Access rules provide clarity about charges which will be levied upon Green Energy consumers who opt for open access.

The new rules state that the tariff to be paid by the consumer will be calculated by the Appropriate Commission like SERCs, and will take into account applicable transmission charges, wheeling charges, cross-subsidy surcharge and standby charges. Other than these, no charges shall be levied on the consumer.

Also, subsequent increase in cross-subsidy surcharge to be paid by the consumer has been capped at 50% of the cross-subsidy charge levied in the year of granting open access.

Further, cross-subsidy charges won’t be applicable to consumers who buy energy from waste-to-energy power producers, or who use green energy for the production of Green Hydrogen / Green Ammonia.

This clarity in charges is aimed at encouraging the consumption of green energy.

Energy Banking with Distribution Licensee of Surplus Energy

Green Energy consumers can opt to bank their unused surplus green energy with the distribution licensees. This option is available to the OA consumers provided that their unused energy to be banked is at least 30% of their monthly energy consumption. Energy banking charges shall be applicable on a monthly basis, and these charges will also be determined by the Appropriate Commissions.

Initial Response of the Industry to the New Green Open Access Rules 2022

Early response to the new Green Open Access Rules has been mostly positive. In a statement given to the press, Mr. Kushagra Nandan, Co-Founder and MD, SunSource Energy said “The C&I (Corporate and Industrial) segment accounts for about 50% of electricity consumption in India and the demand for green energy from this segment, especially from Open Access projects, has been growing rapidly in the last few years. By lowering the threshold for Open Access from the existing 1 MW to 100KW, the Government has opened up the door for this market to multiply multi-fold in the coming few years”.

Another press statement was from Mr. Shravan Sampath, Founder, CEO, Oakridge Energy who said that having clarity on the charges to be levied on the consumer would be helpful. He noted that until now, each state was imposing their own set of charges which was making business difficult. “States resist facilitating C&I open access since they lose their paying customers. They will fight tooth and nail”, he said. Voicing optimism, he added that legal clarity on the matter would soon be obtained.

Future Possibilities from the Green Open Access Rules 2022

Solar-Wind Hybrid Energy Park

India had set a target of reaching 175 GW renewable energy generation capacity by 2022. According to the Ministry of Power, total installed RE capacity excluding hydel power was about 105 GW as of 31st March 2022. This is about 70 GW less than the government’s set target.

Speaking of India’s energy mix, RE excluding hydropower contributes about 26% to India’s total installed power generation capacity.

Juxtaposing this fact with the power shortage faced in April 2022, Mr. Ashish Fernandes, CEO of Climate Risk Horizons said “Two things are true: without the massive RE growth since 2016, the power crisis in April would have been much, much worse. At the same time, if we had been on track for 175 GW by the end of the year, there would have been no power crisis at all”.

Lowering the minimum energy requirement threshold to be eligible for Green Open Access, and clarity on charges will be a push to both generation and consumption of RE.

DISCOMS usually do not follow net-metering of RE to minimise their losses. This approach discourages generation, and consequently consumption of RE. With the new Green Open Access Rules in place, consumers get the freedom to buy renewable energy from any generator of their choice. This bypasses the hurdle posed by DISCOMS to RE generators, as they are no longer dependent on any particular DISCOM for distribution of their generated RE. It is likely that this shall lead to an increased share of renewable energy in India’s energy portfolio.