Karnataka to Allow Monthly Energy Banking for Renewable Projects

ESCOMs must wheel the electricity the project generates up to the drawal point

April 17, 2023


The Karnataka Electricity Regulatory Commission (KERC), under the new format for banking agreement, has now allowed monthly energy banking for renewable energy generators to ensure better grid stability and energy demand management.

The state previously had an annual energy banking settlement mechanism.

The new format also includes wheeling agreements for renewable energy projects under its green energy open access regulations.


The company must provide a list of consumers and the amount of power to be wheeled to them 15 days before commencement, and any changes to this list must also be communicated 15 days in advance.

At the end of each month, the company must allocate all energy generated to its customers under WBA. Any residual energy will be billed to the ESCOM per the applicable tariff. The ESCOMs will collect open access charges from exclusive consumers, and the ESCOMs concerned will charge non-exclusive consumers. Power cuts or load shedding may be imposed during system constraints.

Banking will be allowed monthly on payment of applicable charges, but unutilized banked energy remaining at the end of the month cannot be carried forward to subsequent months. However, RE-generating stations would be entitled to RECs for such energy remaining unutilized at the end of the month. The formula for calculating banked energy at the end of a month is also provided.

The ESCOMs reserve the right to withdraw the facility of banking and wheeling under certain conditions and will not be liable to pay any compensation or damages.

Power Generator Obligation

Power generators (Gencos) must establish, operate, and maintain the project and its associated infrastructure following prudent utility practices and the relevant Act. Compliance with relevant regulations, rules, codes, and standards, such as the state grid and distribution codes, is also required.

ESCOM Obligation

The genco is responsible for paying all applicable charges to the energy supply companies (ESCOMs), including any open access charges for exclusive, non-exclusive, or captive consumers. It must also pay any applicable taxes, cess, duties, or levies.

The ESCOMs have certain obligations concerning renewable energy projects. They must wheel the electricity the project generates up to the drawal point, subject to system constraints. They must provide connectivity to the network and ensure that contracted network capacity is made available during the contract period.

The ESCOMs must comply with the state grid code, distribution code, Central Electricity Authority safety regulations, and other applicable regulations, rules, codes, and standards. They must also terminate the wheeling and banking agreement (WBA) if the project agrees to sell power to the distribution licensees of the state for capacity already under WBA at a generic tariff under the power purchase agreement or at the average power purchase cost or 75% of the generic tariff for obtaining renewable energy certificates (REC), whichever is lower.

Power Project Obligation

The project has the right to generate electricity according to its convenience if it does not violate the grid code or cause any disturbance. The project must coordinate with the state/area load dispatch centre to schedule, dispatch, and meter the electricity.

The project must limit the starting current of the generator to 110% of its full load current and install devices to control the current flow. Adequate protection measures and devices must be provided for the safe and smooth operation of the project in compliance with applicable regulations and codes.


The charges associated with open access power supply include transmission charges, wheeling charges, cross-subsidy surcharges, additional surcharges, banking charges, stand-by charges, losses, monthly transaction charges, meter reading charges, load despatch center fees, scheduling and system operation charges, parallel operation charges, reactive power charges, and deviation settlement charges.

These charges must be paid on behalf of exclusive or non-exclusive, or captive consumers who fail to pay within 15 days of receiving the bill.

A deposit of two months of estimated charges must be made as security with the nodal agency before starting wheeling, which will be returned upon ending the agreement. If any charge is not paid on time, the deposit will be used to pay it, and the deposit must be replenished immediately.

The company can use grid power for start-up, maintenance, and related activities with prior notice to the ESCOMs. The energy drawn from the grid will be measured by the import meter at the injection point, and the total energy generated by the company will be reduced by 115% of this amount.

Force majeure

In such situations, the ESCOMs are not required to bank or wheel the energy as per the agreement. Still, they will reasonably try restoring normal operations within 30 days. If they cannot, the agreement will be suspended for the force majeure conditions.

During this time, the ESCOMs will not be held liable for any compensation, damages, or claims resulting from the inability to wheel and/or bank electricity. However, they will try to supply power to exclusive consumers from their sources, subject to availability and payment of applicable charges.

Accounting for over 31% of the total 2.5 GW of solar open access installations in 2022, Karnataka demonstrated a staggering 679% year-over-year, according to the 2022 Q4 & Annual Mercom India Solar Open Access Market Report.

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