Raj Pratap Singh ,Chairman, UPERC
(Views are personal)
Green Energy Open Access (GEOA) Rules
2022 were recently notified with an objective of giving impetus to India’s
transition to clean energy and is a welcome step. Many new provisions have been
incorporated including defining Green Energy, reducing limit for GEOA to 100
KW, provision of RE banking and inclusion of Green Hydrogen & Green Ammonia
under the Renewable Power Obligation etc. The rule also mandates the Forum of
Regulators to prepare a model regulation and methodology for its
implementation. However, there are some aspects, both legal & operational,
which need clarity for its non-disruptive & smooth implementation.
To begin with, Rule 3
inadvertently refers to applicability of Green Energy defined under clause (c)
of Rule-2 whereas it should be clause (d) of Rule-2, which is a minor typing error
but needs to be corrected because it renders the whole rule meaningless.
The second point is related to
the reduced limit for green energy open access to 100 Kw under rule 5(2)
whereas for other sources, the open access limit is kept at 1 MW. Similarly,
first proviso of rule 7(4) provides preference in long term open access to
green energy over other sources. These rules contradict sections 2(47),
38(2)(d), 39(2)(d), 40(c) , 42(3) of the Electricity Act which talks about
non-discriminatory open access. Therefore, the notified rule is in
contradiction to the principal Act i.e. The Electricity Act 2003 and is
discriminatory on 3 counts, the source of electricity (RE), the quantum of
minimum power eligible for open access (100 MW) and priority over others in
open access. It is well known fact that the rules are sub-ordinate legislation
and cannot supersede the Act though its vires can only be decided by a writ
court. This also brings in related operational issue related to
inter-connection of 100 Kw open access with the grid. While connection of 100
KW can be given at intra-state level (InSTS) on the LT side mainly operating at
11KV, Inter-State Transmission System (ISTS) normally operates at 132 KV and
above. The existing CEA (Technical Standards for Connectivity to the Grid)
regulation needs to be amended to provide open access ISTS connections at 100 KW,
if technically feasible.
The third point is relating to
cross subsidy surcharges and conditions as specified under provisos of rule
9(2) which are not aligned with formulation under Tariff Policy 2016. The rule
proposes to limit the cross subsidy surcharge on RE open access consumers whereas
tariff policy does not.
The fourth point is actually very
serious one and huge implications and therefore needs attention. The 4th
proviso of rule 9(2) exempts green energy utilized for production of green
hydrogen or green ammonia. This provision has been widely welcomed by the
industries. As we all know, green hydrogen is storage and technically not a
source of energy and is comparable to the batteries. The current prevalent
round-trip efficiency (RTE) of green hydrogen is less than 50% thereby meaning
that around 50% renewable energy will be lost in converting RE to hydrogen and
back to electricity. It does not make sense to use highly in-efficient storage
system based on Green H2 for electricity application. Green H2 should be
primarily used as industrial feedstock & agent in refineries, steel &
fertilizer industries. However, by providing free ISTS and waiver from
cross-subsidy surcharge to the Green H2 to be used by industries, there will be
cross-subsidization (on account of round trip conversion energy loss, ISTS
& Cross-subsidy surcharge waiver etc.) by electricity consumers to the user
industries. There is nothing wrong with promoting decarbonisation through Green
H2 for the industries but its cost should be funded by the tax payers and not the rate payers.
This issue needs a wider debate that who should fund the cost of de-carbonization
of industries or e-mobility (EV) for transition to clean energy, the rate
payers (electricity consumers) or the tax-payers as there is substantial
difference between capacity and willingness of these two payers. Further, the
policy maker should be technologically agnostic so that there is competition
and innovation leading to sustainable, just & fair transition. By picking an
in-efficient technology (Green H2) government has taken a huge risk & an expensive
clean energy transition path.
The related issue of inclusion of
Green H2 in RPO is very confusing whether the RE used for generation of green
H2 will be included or electricity produced from Green H2 will be included in
RPO. Further, if the RE source and consumption are taking place in different
states, which state will get the RPO benefit. This will create arbitrage
situation and actually, storage should not be covered under RPO, and if at all, then
Li-ion batteries with a higher RTE > 90%, have a better case.
A significant point arises out of
Rule 9(e) which says “no other charges except the charges above shall be
levied” other than transmission, wheeling charges, cross subsidy surcharge and
standby charges where applicable. This implies that charges such as DSM for
deviating from scheduled injection to the grid or exchange charges etc. will
not be payable by GEOA consumers. With rising share of RE in the grid and need
of balancing power due to RE intermittency & variability, waiving such DSM
charges on RE will have serious implication on grid stability.
While there are some more issues
like use of grid for power banking etc. but I will conclude by highlighting
that promotion and growth of RE should be for sustainable, fair and just
transition to clean energy and the rule needs a re-look with this perspective.
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