Recently on June 6, 2022, The Ministry of Power has notified the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022 ("Rules") which inter alia provide for uniform renewable purchase obligation (RPO) on all obligated entities in the area of distribution licensee and establishment of a Central Nodal Agency (to be notified) for the purposes of setting up and operating a single window green energy open access system for renewable energy (RE).
We provide below key definitions and provisions of the Rules, which are applicable for generation, purchase and consumption of green energy (as defined below).
1. RPO:
Entity whether obligated or not may choose to generate, purchase and consumer RE as per its requirements by one or more of the following methods:
- Own generation from RE sources: Without any capacity limit for installation of power plants for captive use. Such projects may be set up at any location in India and transmission of power should be through OA;
- Open Access: Procuring RE through open access from any developer either directly or through trading licenses/power markets
- Requisition from DISCOM – Any Entity may purchase green energy partly or wholly for its consumption for which it may place a requisition with DISCOMs. The DISCOM shall procure and supply such quantity of green energy. Consumer has been given the flexibility to give separate requisition for solar and non-solar. However, requisition shall be for a minimum one-year period and quantum shall also be pre-specified for one year.
- Captive Plants - By consuming green energy from captive power projects;
- REC - By purchasing renewable energy certificates (REC) in accordance with applicable laws;
- Green Hydrogen/Ammonia: By purchasing green hydrogen or green ammonia. The quantum of such green energy would be computed by considering the equivalence to the green hydrogen or green ammonia produced from one MWh of electricity from the RE sources or as per the norms notified by the Central Commission;
- Any other sources, as may be determined by the Central Government.
2. Nodal Agency and Green Energy Open Access:
The Rules provide for the establishment of a Central Nodal Agency (to be notified by the Central Government) for the purposes of setting up and operating a single window green energy open access system for RE. The application procedure is as under:
With respect to grant of green energy open access, the appropriate load despatch centre for short term and STU/CTU for medium and long term open will be notified.
3. Banking:
Banking will permitted at least on a monthly basis on payment of charges to compensate additional costs to the distribution licensee. Appropriate commission shall fix the applicable charges. However, the credit for banked energy is not permitted to be carried forward to subsequent months and has to be adjusted during the same month.
The permitted quantum of banked energy by the green energy open access consumers will be at least 30% of the total monthly electricity consumption from the distribution licensee.
4. Fixed Open Access Charges:
Transmission, wheeling, cross subsidy surcharge (CSS) and standby charges (if applicable) shall be the only charges that will be levied on green energy open access consumers.
CSS shall be as per tariff policy, provided that CSS for the OA consumer purchasing green energy shall not be increased by more than 50% of the surcharge determined for the year in which OA has been granted for twelve years from the operation of the generating plant. Additional Surcharge (AS) will not be applicable for green energy open access consumers, if fixed charges are paid by consumer.
CSS and AS shall not be applicable if
- power produced from a waste-to-energy plant is supplied to the OA consumer and/or
- green energy is utilized for production of green hydrogen and green ammonia
5. Green Certificate and Rating
DISCOM shall give green certificates on a yearly basis to the consumers for the green energy on a request, beyond the renewable purchase obligation. The State Commission may also introduce the concept of consumer rating, based on percentage of green energy offtake by such consumer.
6. Model Regulation on Methodology
Model regulations on methodology for calculation of OA and banking charges shall be prepared within 4 months from date of commencement of these Rules. While framing methodology, the Rules specifically provide that the forum of regulators have to ensure that the various permissible charges are not onerous and meets the prudent cost of DISCOM in order to fulfil the objective of promoting the procurement of green energy by Green Energy Open Access Consumers.
Concluding Remarks
These Rules tend to bring uniformity in rules and will go a long way to reduce the administrative bottlenecks as well as encourage and promote the growth and development of clean energy sources. Further, these Rules also give impetus to the upcoming green energy sources namely, green hydrogen, green ammonia and battery storage through its inclusion.
Subject to its proper implementation and on ground challenges, this seems to be a welcoming legislation and a positive step towards the growing clean energy portfolio in India.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
