Government recognises needs of C&I consumers

05 September 2021 |

The Ministry of Power has issued draft electricity rules for open access (OA) renewable power. This is the first time that the central government has acknowledged increasing potential and needs of this market.

The draft rules touch upon various aspects of renewable power procurement by C&I consumers including project application and approval process, eligible capacity, alternative procurement routes and business models, banking as well as OA charges. As alternative procurement routes including ‘behind the meter’ installations, green power from DISCOMs and RECs are included in this paper, the name seems to be a misnomer.

All consumers with demand of more than 100 kW may procure any amount of renewable power from open access or other sources (current limit is 1 MW for open access in most states). Consumers may also install ‘behind the meter’ renewable projects without any system size restrictions.

Approval process
A single window approval process is proposed for OA projects. Applications would need to be submitted to a central government agency (yet to be nominated), which will monitor application status and ensure approval by appropriate state government entities within 15 days. In case of transmission system constraints, renewable power would get preference over conventional power in approvals.

OA power may be banked on a monthly basis subject to an annual cap of 10% of power consumed from the local DISCOM.

OA charges
All OA charges and surcharges would be determined by respective regulators, as at present, provided that the Cross-Subsidy Surcharge may not increase by more than 50% in the 12-year period after project commissioning. The rules also exempt renewable power from Additional Surcharge payment.

Green power from DISCOMs
Consumers may buy a specified share of their power needs in the form of renewable power from DISCOMs at specified tariff (‘green tariff’) for a minimum period of one year.

Consumers may procure green hydrogen to meet RPO commitment.

The proposals are a mish-mash of different ideas at this stage based on feedback from different stakeholders. There is need for more refinement and clarity. But the intent behind a comprehensive C&I renewable policy is desirable. The market has huge potential as witnessed by rising number of companies pledging to net zero commitments and RE100. But it has been stymied by a number of policy-related challenges arising mainly from reluctance of DISCOMs to lose lucrative consumers.

We estimate current installed C&I renewable capacity at 17,817 MW, split across rooftop solar (6,017 MW), OA solar (4,468) and OA wind (7,315). But as the following chart shows, growth has faltered in the last few years.

Figure: Open access solar and wind power capacity addition, MW

Source: BRIDGE TO INDIA research

We estimate total potential of C&I renewable market at 130 GW capacity by 2030 provided the government can foster a conducive environment. The challenge would be to get states and DISCOMs to align with the new policy.

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