Energy Banking for Captive Renewable Projects Selling Open Access Power to Third-Party

The banking facility will be available for the useful life of the renewable projects


The Joint Electricity Regulatory Commission (JERC) has issued draft amendments to the intrastate open access transmission and distribution regulations 2017.

Where will it apply?

These regulations will apply to the state of Goa and the union territories of Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman & Diu, Lakshadweep, and Puducherry.  Banking of energy will be allowed only for the intrastate (within the state or union territory) supply of power.

The amended regulations will come into force from the date of publication in the official gazette. The stakeholders have time until October 19, 2020, to send their comments and suggestions.

According to the draft notification, the distribution licensee must allow energy banking to all the captive renewable stations and projects supplying power to third-party consumers through open access. These regulations will not be applicable for projects covered under the JERC’s solar grid-interactive systems based on net metering regulations 2019 issued in May last year.

Limit for banking energy

The banking of energy up to 20% every month will be allowed, subject to evacuation feasibility. Banking and the withdrawal of banked energy will be allowed only in the same financial year.

The notification states that the unutilized banked energy at the end of the financial year will be considered as deemed purchase by the distribution licensee at average power purchase cost (APPC) or feed-in-tariff for the year, whichever is lower. The unutilized banked energy over 20% of the total energy generated at the end of the year will lapse, and no compensation will be applicable for it.

Banking charges

Banking charges at the rate of 5% will be applicable for the drawal of banked energy.  Banking and withdrawal of energy will be subject to day-ahead scheduling. The power purchased by the captive and third-party consumers, which is not against the banked power, will be considered as power purchased by the captive consumer or third-party consumer. In case of a shortage of power, if the captive or third-party consumer takes power from the distribution licensee, it will not be considered under the banking arrangement.

Settlement of energy

In its draft notification, the joint regulator stated that for each billing period, the distribution licensee should show the amount of electricity injected by the renewable generating unit in the billing period and the amount of energy withdrawn by the captive and third-party consumers. If the electricity injected exceeds what’s withdrawn, it will be carried forward to the next billing period and will be utilized to calculate the net electricity withdrawn in future billings.

In case the electricity withdrawn exceeds the electricity injected, the distribution licensee will raise the bill for the net electricity withdrawn after taking into account the banking charges and electricity credit balance remaining from the previous cycle.

Further, the net energy withdrawn after adjusting the credit from the previous billing cycle will be considered consumed by the captive consumer or third-party consumer, who would be billed accordingly.

Last month, Chhattisgarh Electricity Regulatory Commission also proposed modalities for renewable energy banking, accounting, and wheeling of power to provide more clarity on the distributed renewable energy regulations 2019.

On the other hand, Karnataka Electricity Regulatory Commission issued a discussion paper on wheeling charges and banking facilities for renewable projects.