Green energy access norms allow commercial consumers to buy power from open market

New Delhi: The central government has relaxed norms to allow commercial and industrial power consumers to purchase green energy at a lower price from the open market.

Commercial and industrial power consumers have been, so far, purchasing green energy from local suppliers such as the Kerala State Electricity Board (KSEB). With the provisions of the Green Power Open Access Rules, 2022, coming into force, local power suppliers like KSEB would lose a large number of high electricity consumers.

Only connected load firms (those requiring 1,000 kilowatt of power) were allowed to purchase power from the open market so far. The Centre has now brought down the ceiling to 100 kilowatt from 1,000 kilowatt for firms purchasing green energy.

A significant percentage of commercial and industrial power consumers in Kerala fall under the category requiring 100 kilowatt. With the Centre allowing them to purchase power for less from the open market, their dependency on the KSEB would considerably come down.

According to the new norms, the commission responsible for approving green access should give its nod within 15 days of receiving the application. Currently, 20 Kerala-based firms are purchasing power from the open market, and 54 applications for the same are pending.

The pluses

The Green Energy Open Access allows firms the opportunity to purchase power directly for a lesser price from anywhere in the country. They need not mandatorily purchase it from the nearest provider. A firm could transmit power to Kerala from another company with windmills or solar plants anywhere in India after paying a fixed price for using the Board's transmission lines.

The new norms have prohibited firms from increasing the price of green energy above 50 per cent of the surcharge for the next 12 years. Consumers purchasing power generated from garbage, green hydrogen and green ammonia need not pay surcharge and additional charge.

With more firms opting for green energy, the dependency on coal-fired thermal power plants would come down, especially since the country has been experiencing a shortage of coal.

Meanwhile, several States had brought in strict restrictions to discourage firms from opting for open access purchase of power, fearing that they would lose major consumers and revenue.