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Home News Power Sector News Renewable power purchase to become mandatory for open access consumers

Renewable power purchase to become mandatory for open access consumers

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Renewable EnergyOpen access power consumers may soon have to shell out more to foot their electricity bills, with regulators agreeing to impose mandatory renewable purchase obligations on them. As of now, only power distribution licensees are required to buy renewable power in compliance with the target set under the National Action Plan on Climate Change (NAPCC).

Open access consumers take their power supplies from sources other than the local distribution companies (discoms). However, they use the discom's network for power supply and pay wheeling and standby charges besides the cross-subsidy surcharge. After January 2009, consumers with demand of 1 mw and above can seek their supplies through open access.

The decision to impose mandatory renewable purchase obligations on open access power consumers was taken at a recent meeting of electricity regulators. According to the modalities worked out in this regard, open access consumers will have to buy renewable power to meet the NAPCC target. Alternatively, they can buy renewable energy certificate. In case they fail to comply, they will have to pay a penalty.

NAPCC aims to increase the share of renewable energy in the overall grid power to 15% by 2020, starting from 5% in 2009-10 and increasing it by 1% each year.

The volume of power purchased through open access rose sharply during 2010-11 as industrial consumers in power deficit states like Tamil Nadu, Punjab, Haryana, Rajasthan and Madhya Pradesh used this route to buy electricity from outside to mitigate their power shortages.

These consumers mostly purchased electricity for supply during night and benefited from lower price. Open access consumers purchased 4,056 and 92.72 million units of electricity from India Energy Exchange (IEX) and Power Exchange of India (PXIL), respectively, during the year. The weighted average price of electricity purchased by open access consumers through IEX was R2.72 a unit compared with the weighted average price of R3.38 a unit for total electricity sold through the exchange.

At PXIL, the weighted average price of electricity purchased by open access consumers was R3.62 a unit compared with weighted average price of R3.87 a unit price for total electricity sold through the exchange.

At IEX, the quantum of power purchased by open access consumers consumers as a percentage of total volume transacted has risen from 2.8% in April 2010 to 36.6% in March 2011.

Source- Financial Express

 

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