The Ministry of Power (MoP) circulated the Draft Electricity (Promoting Renewable Energy through Green Energy Open Access) Rules, 2021 on August 16, 2021. Renewable Watch presents the key extracts from the draft rules…
The draft rules mention that there will be uniform renewable purchase obligations (RPOs) on all obligated entities (discoms, open access consumers and captive power consumers) from the date of notification of the draft rules. The draft rules mention the methods by which any entity (any consumer with contracted demand/ sanctioned load of 100 kW or more, except for captive consumers) may purchase and consume renewable energy:
- There is no capacity limit for the installation of behind-the-meter renewable energy plants. Naturally, discoms will not be liable to purchase such energy. The plant may be set up by the owner or a developer.
- Renewable energy may be procured through the open access route.
- To work with discoms, the entities must take into account certain considerations. One, an entity may purchase a portion, or the entirety, of its energy needs via green energy. Two, consumers may purchase a larger share of renewable energy vis-à-vis the obligation. The share should be a minimum of 50 per cent of consumption. The share can be only increased in multiples of 25, reaching a maximum of 100 per cent. Three, the green energy tariff will be determined by the appropriate commission. The tariff may comprise the average pooled power purchase cost of renewable energy, cross-subsidy char-ges and service charges covering all prudent costs of the discom. Four, any request for green energy to a discom must be for a minimum period of one year. Five, green energy purchased from discoms will be counted towards discoms’ RPOs. Six, the accounting of renewable energy supplied at the discom level will be on a monthly basis.
- Renewable energy certificates can be purchased to meet the RPOs.
- The obligated entities may also meet their RPOs by purchasing green hydrogen. The quantum of green hydrogen will be computed by considering the equivalence to the green hydrogen produced from 1 MWh of renewable energy or its multiples.
On green energy open access
The draft rules state that the appropriate commission will put in place regulations to provide green energy open access to consumers. In addition, all applications for open access of green energy will be granted within 15 days. This route will be applicable to consumers who have contracted demand/sanctioned load of 100 kW and above. Also, captive consumers will have no power supply limit under this route. In a bid to avoid a high variation in demand for discoms, conditions will be imposed regarding the minimum number of time blocks for which a consumer may not change the amount of power consumed through the open access route. The draft rules have highlighted the following key procedures for the grant of green energy open access:
- The Forum of Regulators (FoR) will first prepare a common application format.
- Applications will be approved within 15 days. Post this period, an application will be deemed approved, subject to the fulfilment of the technical requirement specified by the appropriate commission.
- Short- and medium-term open access will be allowed, provided there is sufficient spare capacity in the transmission system. Meanwhile, the transmission system may be augmented for long-term open access. However, priority will be given to long-term open access in the existing system if spare capacity is available.
- Open access for non-fossil fuel sources will be prioritised over fossil fuel sources.
The draft rules also mention that discoms may give green certificates on a yearly basis beyond the RPOs of the consumers. In addition, a state commission may introduce the concept of rating/labelling of consumers based on the per cent of green energy purchased. Furthermore, the FoR may prepare model regulations on a common methodology for calculation of open access charges for the consumers. This will be done in four months from the date of notification of the draft rules.
All in all, the circulation of the draft rules by the MoP is a welcome step for the renewable energy sector. It can be seen as a move to bring uniformity to the sector through the mention of uniform RPOs, a single window for green energy open access through a central nodal agency, and the formulation of model regulations on a common methodology for the calculation of open access charges. The move to allow the purchase of green hydrogen and green energy from discoms to offset RPOs is expected to drive the widespread use of the green retail tariff.