Empowering India’s Green Energy Revolution: The Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022

India is the third largest energy consumer globally and holds a prominent position in the energy landscape. India has invested in building a robust infrastructure to harness renewable energy sources.[1] With the aim of promoting open access and the utilization of renewable energy sources, the Ministry of Power (Ministry) took a momentous stride on 16th August 2021 by unveiling the Draft Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2021.

This move signifies the government’s commitment to encouraging the widespread adoption of renewable energy and facilitating its accessibility through open access mechanisms. The Ministry of Power took a significant step on 6 June 2022 by officially notifying the finalized Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022.[2] The primary objective of these Rules is to facilitate the generation, purchase, and consumption of green energy. Recently, MERC has ruled out that provisions of the Green Energy Open Access rule, 2022, and as amended from time to time by the Government are to be followed by all concerned authorities.

In case of any inconsistency in MERC’s regulations, then the provision of Green Energy Open Access Rules will prevail. It also directed the MSEDCL and other distribution licensees to follow the guidelines and it allows the Green Energy Open Access Rules to come into effect in Maharashtra.[3]

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

1. Reduction in the load limit to participate in open access

In order to promote the adoption of renewable energy by smaller consumers, the open access cap has been revised. Previously, consumers need to have a minimum power requirement of 1 MW (megawatt) to avail open access. However, with the new Second Amendment Rules, this threshold has been significantly lowered to just 100 kW (kilowatt).[4]

This means that smaller consumers can now access renewable power by having a connection with a capacity of 100 kW or more. They can achieve this either through a single connection of 100 kW or through multiple connections that add up to 100 kW or more.

Furthermore, for consumers who generate their electricity from self-use plants (captive electricity), there is no minimum requirement for open access to green energy. This provision is designed to encourage smaller consumers to gradually transition to alternative energy sources and procure electricity through open access.

2. Establishment of nodal agency

To facilitate the purchase of electricity through open access, a consumer interested in this option must submit an application to a nodal agency. The Rules suggest the establishment of a central nodal agency responsible for creating and managing a unified platform dedicated to renewable energy-specific open access.  The government’s objective in introducing this platform is to make it inclusive and accessible to all stakeholders in the power sector, comprising both sellers and buyers involved in open access transactions. This agency will play a pivotal role in simplifying the procedures related to open access, thereby encouraging more active participation from various entities in the renewable energy market.

3. Renewable Energy Purchase Obligations

The Renewable Energy Purchase Obligations (RPO) framework is established by the Act and Tariff Policy, 2016. It mandates certain entities, including distribution licensees, captive users, open access consumers, and other entities identified by State Regulatory Commissions, to procure a specific percentage of their electricity consumption from renewable sources. The primary objective of RPO is to ensure a gradual shift towards a greener energy mix and promote the use of renewable energy in the country’s power generation.

The primary objective of the Rules is to establish uniformity in the Renewable Purchase Obligations (RPO) for all obligated entities operating under a distribution licensee’s jurisdiction.[5] To fulfill their RPO requirements, these entities have several methods at their disposal:-[6]

• By own Renewable Energy Generation: The entities can establish power plants of any capacity for their own consumption, and these plants can be located anywhere in India and power generated can then be transmitted via open access.
• Purchasing Renewable Energy through Open Access: Entities can directly purchase renewable energy from a renewable energy developer, through a trading licensee, or through power markets.
• Requisition from the Distribution Licensee: Consumers have the option to purchase more renewable energy than the mandatory RPO requirement. This can be done in increments of 25% to 100% of their overall electricity consumption and consumers are allowed to submit separate requests for solar and non-solar energy. Any request for green energy from a distribution licensee must be made for a minimum duration of one year.
• Consuming Electricity from Captive Generation: The Entities can fulfill their RPO obligations by consuming electricity generated from their own captive power plants.
• Purchasing Renewable Energy Certificates (RECs): The entities can buy Renewable Energy Certificates from the market to meet their RPO targets.
• Purchasing Green Hydrogen or Green Ammonia: The Rules recognize the option of purchasing green hydrogen or green ammonia to fulfill RPO obligations.

4. Energy Banking

Energy banking plays a crucial role in ensuring the long-term sustainability of renewable energy generator projects. It involves depositing surplus energy generated by renewable energy sources with distribution licensees and later withdrawing it when needed. 

According to the Rules, energy banking is made available to open access users. Open access users have the option to engage in energy banking on a monthly basis. The distribution licensee is mandated to provide this service to open access users for at least 30% of their total monthly energy consumption from that particular distribution licensee. The specific banking fees applicable to this service will be determined by the State Electricity Regulatory Commission.[7] It facilitates more efficient utilization of renewable energy by allowing surplus power to be stored and used as needed, ensuring a smoother integration of renewable energy sources into the power grid.

5. Green energy open access charges

The process of transporting electricity from generating stations to consumers involves the participation of multiple agencies, each with specific roles and responsibilities. As per the Rules, consumers who choose open access from green energy sources are only required to pay the following fees:-

• Transmission fees
• Wheeling fees
• Standby fees
• Cross subsidy surcharge
• Banking Charges
• Other fees and charges

Recent development

• Previously, the definition of “entity” considered any consumer with a contracted demand or sanctioned load of 100 kW or more as eligible. However, captive consumers were exempted from this limitation, meaning they could procure any amount of power as per their requirements. Now, the definition of “entity” has been expanded to include cases where the 100-kW threshold can be met through either a single connection or multiple connections, all located with the same electricity division of a distribution licensee.
• With the revised Rule 5, First Proviso, any entity meeting the 100 kW requirements through a single connection or multiple connections within the same electricity division of a distribution licensee is eligible to access power through Green Energy Open Access. Additionally, captive consumers under Green Energy Open Access no longer have any limit on the amount of power they can procure.
• Furthermore, the amendment to Rule 9 pertains to the surcharge applicable to electricity generated from offshore wind projects. Previously, this surcharge exemption applied to projects commissioned up to December 2025. However, with the revision, the exemption period has been extended, and now projects commissioned up to December 2032 will be exempt from the surcharge.[8]
• The open access charges to be levied on Green Energy Open Access Consumers include transmission charges, wheeling charges, cross-subsidy surcharge and standby charges. The Rules have introduced two measures to incentivize consumers to adopt green energy: a cap on the increase of cross-subsidy surcharge, limited to 50%, and the complete removal of any additional surcharge.
• All applications are to be processed on the national portal operated by Power System Operation Corporation Limited POSOCO. As per the Rules, all applications for green energy open access must be submitted online using a standardized format, which is prepared and issued by Grid India in collaboration with the forum of regulators.
• By implementing a single window clearance system and instituting deemed approval after fifteen days; the process will be streamlined and will effectively resolve the issue of delays in obtaining regulatory approvals.
• It made the energy banking facilities compulsory for renewable power generators; the Rules enable these generators to store their surplus energy, which would have otherwise been lost.

Conclusion

Overall, the implementation of these Rules is expected to have far-reaching positive impacts on India’s efforts to ensure a greener future and move towards achieving its net-zero carbon emissions target by 2070. It represents a significant step forward in the country’s transition to a sustainable and environmentally responsible energy system.

FAQs

[1]  https://www.investindia.gov.in/sector/renewable-energy

[2] https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1842737

[3] Pimpri Chinchwad Municipal Corporation vs Maharashta State Electricity Distribution Co. Ltd, Case No 165 of 2023.

[4]https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1923863#:~:text=The%20Green%20Open%20Access%20is,of%20Green%20Power%20from%20Discoms.

[5] Rule 4(1), Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022.

[6] Rule 4(2) Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022.

[7] Rule 8, Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022.

[8]https://pib.gov.in/.

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