Andhra Pradesh to Amend its Regulation on Open Access Power Transactions

Regulation has been in force since March 11, 2019


As the share of renewable energy in the generation mix is increasing in the Indian states, an increasing number of state regulatory commissions are now amending old regulations.

For instance, the Andhra Pradesh Electricity Regulatory Commission (APERC) has now issued fourth amendments to its regulations on the interim balancing and settlement code for open access transactions. The new regulations have been in place since March 11, 2019.

According to the new regulations, “The energy injected into the grid from the date of synchronization to the Commercial Operation Date (COD) will be considered as deemed banked energy.”

The new regulations were formed keeping in mind the new wind and solar policies framed by the Andhra Pradesh state government. Andhra Pradesh has passed a slew of new policies and regulations in recent months to provide further impetus to the expansion of renewable energy projects in the state.

In the first week of 2019, Andhra Pradesh came up with a new solar policy with the aim to promote widespread use of solar power, targeting a minimum total solar power capacity addition of 5,000 MW in the next five years in the state. A few days later, the state government announced Wind Power Policy-2018 with a goal to expand the base of wind projects in Andhra Pradesh. The same month, the Andhra Pradesh government also issued Wind-Solar Hybrid Power Policy-2018 to achieve 18,000 MW of renewable energy capacity by the financial year 2021-22, which is 10 percent of the national target.

The APERC observed that the present installed capacity of solar and wind power generators has increased 16 times the installed capacity compared to 2014. However, the capacity of small and mini hydro projects hasn’t increased much. The APERC has now provided similar status to hydel as that of wind and solar. Now, the energy from mini-hydel power projects will be provided deemed banking facility.

While issuing the new regulations, the APERC observed that it is also a fact that the DISCOMs had to curb their thermal generation sources in order to accommodate solar and wind generation and therefore, meeting the fixed cost of the obligation of thermal power production, which is an avoidable loss.

The APERC fixed the price payable by the distribution companies (DISCOMs) for the unutilized banked energy at 50 percent of the pooled cost of power purchase in the state.

The incentive provided by various states for the purchase of unutilized banked energy: Tamil Nadu: 75% of applicable wind/solar tariff.  Maharashtra: unutilized banked energy limited to 10% and purchased at pooled cost. Rajasthan: only 10% banked energy at 60% of energy charges of the large industrial tariff.  Gujarat: all access at APPC for open access, captive wind/solar. Karnataka: 85% of applicable tariff. Madhya Pradesh: Solar at APPC and for wind ₹2.50 paise per kWh.

Recently, the Maharashtra Electricity Regulatory Commission (MERC) also issued draft amendments to transmission and distribution open access regulations. Open Access market once attractive is becoming more of a minefield for renewable energy project developers with new regulations being announced regularly. Every state has its open access policy, and it is a continuous struggle for developers to keep up with the changes.