Open Access Power Market in India: A Compendium of Charges, Contradictions for Solar Energy Consumers and A Potential Framework for Simplification

Abstract

India reformed its power market in 2003, with the enactment of the Electricity Act. The act empowered consumers having a connected power demand of 1 MW or more to source power from any generator of their choice (known as open access). Open access acts as an alternative source for these consumers and sometimes at cost competitive to the grid tariff. However, the multiple charges payable to various utilities acts as an impediment to avail such free access. Additionally, these charges vary state wise and keep revising after each financial year. The act de-licensed generation permitting free generation of energy while complying with the grid standards. The act also allowed the renewable energy generators to sell their energy to any consumer of their choice (other than Discom). Solar energy generators, due to its huge land requirements are usually installed at places which are at distant from the load centers. Open access hence, seems an important mechanism of catering to this load centers. The applicable charges and losses to such generators/consumers however are uncertain due to the overlap between the policy maker and the regulator. The primary goal of our study was to prepare a central online compendium which shall detail all charges applicable to consumers. The compendium shall also highlight the overlaps with respect to the solar energy consumers. Finally, the complexity in the overall transaction would be highlighted and potential solutions to it would be presented.