By Sakshi Bansal
The Green Energy Open Access (GEOA) Rules, 2022, announced by the government in June 2022, are crucial for achieving India’s ambitious renewable energy targets. As per the rules, consumers with a connected load of over 100 kW can procure renewable energy directly from generators or through power exchanges via the open access route. The load limit was reduced from 1 MW. This change in policy is being seen as a key reform aimed at increasing the uptake of open access, as smaller consumers with lower loads will now also be able to take this route.
While the central government has passed the regulation, actual implementation on the ground depends on state-specific policies. Although states were initially slow to adopt these rules, significant uptake is now being witnessed in several states. As of May 2024, there has been promising progress, with over 15 states releasing their GEOA regulations in accordance with the central government’s GEOA rules.
According to Vishal Tripathi, consultant, Council on Energy, Environment and Water, among the states that have already released their GEOA rules, Karnataka is often considered a leader due to its substantial concessions on wheeling and banking charges, making it very attractive for GEOA projects. However, this model might not be sustainable long-term, as it can strain discom resources, with Prayas (Energy Group) estimating an annual loss of around Rs 6 billion in a study for the Karnataka Electricity Regulatory Commission.
Meanwhile, states such as Gujarat and Tamil Nadu offer a more balanced approach. They provide a regulatory framework that is favourable for GEOA projects but also maintains the financial health of discoms. This balanced approach is likely to be more sustainable, making these states favourable for GEOA projects. For instance, the Tamil Nadu Electricity Regulatory Commission has ensured that an audited and annually updated account of gross fixed assets of the discoms’ wires business is used to calculate the wheeling charges, when many other states continue to use estimates and fixed ratios,” says Tripathi. Recently, Andhra Pradesh, Meghalaya and Telangana also came out with their own GEOA rules.
Renewable Watch presents the key highlights of these GEOA rules, and the outlook for the green open access market in India…
Andhra Pradesh
The Andhra Pradesh Electricity Regulatory Commission (APERC) has adopted the GEOA, Charges, and Banking Regulations, 2024. The regulations pertain to allowing open access for power produced from renewable energy sources for use within the state, through intra-state transmission systems (InSTS) and/or the distribution networks of licensed entities.
The duration of a consumer’s usage of the InSTS and/or distribution system determines its category when requesting open access, with long-term consumers using it for five years or more, medium-term between one and five years and short-term for a maximum of one year.
GEOA consumers are obligated to pay transmission and wheeling charges as defined and set by the commission in the multi year tariff orders for the appropriate period. GEOA consumers are further required to pay a cross-subsidy surcharge as specified and determined by the commissioned in the retail supply tariff order. The standby charges will be set at 120 per cent of the standard tariff (for both demand and energy) of the consumer category, with no penalties for exceeding the contracted maximum demand if no notice is given by the relevant parties. Load curtailment does not apply if GEOA consumers decide against a standby arrangement with the distribution companies. Generators using GEOA must pay for reactive energy according to the terms specified in the state grid code issued by the commission.
Unused energy will be reimbursed at 75 per cent of the most recent Solar Energy Corporation of India tender rate for the relevant clean energy source at the conclusion of the billing cycle, as announced by the APERC on an annual basis. The associated renewable purchase obligation for the unused banked energy will be advantageous to the distribution licensee. Furthermore, the distribution licensee will provide a green certificate each year to consumers who have purchased green energy from them.
Meghalaya
According to the Meghalaya State Electricity Regulatory Commission (Terms and Conditions of Green Energy Open Access) Regulations, 2023, consumers who have a contracted or sanctioned load of 100 kW or more are eligible to obtain power through GEOA.
The scope of the open access allowed depends on the voltage level of a consumer’s connection. At 11 kV, open access applies to loads between 100 kW and just under 2 MW. At 33 kV, open access is available from 2 MW to less than 5 MW. For connections at 33 kV and above, open access surpasses 5 MW, designating the consumer as part of the InSTS network.
The duration of a consumer’s usage of the InSTS and/or distribution system determines its open access category, with long-term consumers using it for three years or more, medium-term between three months and three years and short-term for a month. For granting short-term GEOA, the state load despatch centre will be the nodal agency for consumers connected at 33 kV and higher, while the distribution licensee will be responsible for those connected at 11 kV and less. For medium-term and long-term access, the state transmission utility will act as the nodal agency.
Furthermore, the commission determines the interstate transmission system (ISTS) charges (which may vary over time) and the wheeling charges (which get periodically updated via the retail supply tariff order). Cross-subsidy and additional surcharge are also determined by the commission through its retail supply tariff order. Moreover, if a GEOA consumer experiences power outages or other disruptions that prevent them from obtaining power from the generating sources, the standby arrangement will be equivalent to 125 per cent of the consumer category’s normal tariff.
For banking, there will be scheduling requirements for both withdrawal of banked energy and injection of excess energy. However, the renewable energy generating station will still be eligible to receive renewable energy certificates for this unused energy.
Telangana
According to the Telangana State Electricity Regulatory Commission (Terms and Conditions of Open Access) Regulations, 2024, consumers that have a contracted or sanctioned load of 100 kW or more, including those that aggregate multiple connections to achieve a total of 100 kW within the same electricity division of a power discom, are eligible to obtain power through GEOA.
The duration of a consumer’s usage of the InSTS and/or distribution system determines its open access category, with long-term consumers using it for 7-25 years, medium-term between one month and seven years and short-term for less than a month.
Furthermore, the commission will determine wheeling charges, transmission charges and cross-subsidy charges for consumers using GEOA. The cross-subsidy surcharge for consumers who adopt GEOA and purchase green energy from a renewable energy-based generating project will not be more than 50 per cent, for 12 years from the date of operation of the generating project. Other charges that a user is required to pay to the commission include scheduling charges, state-load despatch centre charges, and deviation and reactive charges. The state commission will specify standby charges, if applicable. Furthermore, GEOA consumers will receive renewable energy certificates for the unused energy.
Under all regulations mentioned above, customers using GEOA will receive a banking facility, subject to the following requirements: every calendar month will be regarded as one billing cycle for the purposes of banking, and the use of stored energy must occur during the same billing cycle, after which any remaining unused energy will expire. Banking charges will amount to 8 per cent of the energy stored at the consumer’s end. Consumers are allowed to bank up to 30 per cent of their monthly power usage from green energy sources within a banking cycle. Throughout the billing period, banking and withdrawal are allowed.
The way forward
India’s heightened attention to net zero commitments has hastened the uptake of renewable energy, facilitated by several regulatory advancements such as the GEOA rules. This initiative is notable in the country’s clean energy sector, as it empowers smaller commercial and industrial (C&I) consumers — who previously needed a connected load of 1 MW or more for GEOA but now only require 100 kW or above — to directly source green energy from producers. The GEOA market also permits smaller independent power producers, which lack the capacity to take part in large centralised government renewable energy procurement auctions, to establish and operate clean energy plants.
While there have been notable positive changes, persistent challenges remain, demanding strategic solutions to fully capitalise on the advantages of open access. These include securing adequate land for clean energy initiatives and addressing connectivity obstacles. Additionally, Indian financial institutions generally charge higher interest rates from open access C&I developers. Furthermore, infrastructural constraints arise because open access solar projects rely on state transmission networks, prompting discoms to impose additional charges. A report titled “Achieving India’s Renewable Energy Target by 2030”, published in May 2024 by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics, mentions other key challenges in India’s open access market. It states that C&I consumers are required to construct transmission lines on their own to connect to the Central Transmission Utility’s (CTU) ISTS substations, which can be located up to 100 km away. Since smaller C&I consumers cannot afford this, it limits the market penetration potential of ISTS. Further, unlike power purchase agreement with fixed prices, power exchanges lack price visibility. Consequently, developers find it challenging to secure debt for uncontracted capacity intended for merchant use. Additionally, as investors desire long-term policy certainty, frequent and arbitrary policy changes discourage investment, as in the case of cross-subsidy surcharge and additional surcharge (which undergo frequent revisions, lacking a long-term vision). Moreover, banking charges and settlement periods exhibit significant disparities across states, contributing to inconsistency.
Furthermore, according to Tripathi, discoms are often reluctant to grant no objection certificates to GEOA consumers, because C&I consumers are their main revenue source. The push for rooftop solar under initiatives such as PM Surya Ghar adds another layer of complexity. Moreover, the current regulations favour group captive and captive GEOA models over third-party arrangements, which can lead to discoms losing these consumers permanently. “This regulatory bias, coupled with constant policy changes such as those in the Approved List of Models and Manufacturers, creates significant uncertainty for businesses. All these factors make it challenging to scale up GEOA projects. Moreover, metering regulations currently do not cover availability-based tariff for low-tension (LT) consumers, which has led to KERC stepping in to address the gap. Further, it is often challenging for companies, such as those in construction, to get temporary LT connections at sites, hindering their ability to meet decarbonisation targets,” adds Tripathi.
According to IEEFA-JMK Research & Analytics’ report, to address the issues in India’s open access market, the CTU should expand dedicated feeder lines up to the mid- to large-scale industrial clusters in order to enable last-mile connectivity for ISTS electricity. Complete exemption from ISTS charges should be maintained until 2030, even for open access. Furthermore, implementing financing structures such as infrastructure investment trusts or aggregated bonds is necessary to unlock developers’ capital. Moreover, the Ministry of Power should explore the possibility of initiating a pilot contract-for-difference project through power exchanges for small-scale renewable energy capacity, as a demonstration. It is essential to adjust the exchange’s price ceiling to encourage greater participation of renewable energy players as merchant suppliers in the day-ahead markets. Furthermore, there should be a mandatory five-year lock-in period for all major national-level policies before they can undergo significant modifications. On that note, it is important to refrain from making arbitrary alterations to policies such as changes in charges or renewable purchase obligations.
Moreover, according to Tripathi, to really promote open access projects, we need a nationwide effort to harmonise the methodologies used for calculating its charges. This will ensure that discoms are fairly compensated, making open access a potential revenue stream rather than a loss. He, too, agrees that a stable and transparent regulatory environment is crucial to encourage discoms to support GEOA. Furthermore, ensuring timely payments from the government to discoms will help avoid the build-up of regulatory assets. Aligning these economic incentives and ensuring financial stability for discoms can make GEOA much more attractive and widespread.
Going forward, although much effort is still required to increase the uptake of GEOA projects, the future appears optimistic, with progress on several fronts. These include the waiver of ISTS charges for projects commissioned by June 30, 2025, greater uptake of multi year tariff structures, technological advancements and the emergence of storage solutions, all enhancing the resilience of the open access market.
