Centre’s Green Energy Open Access Policy Is A Nonstarter In Gujarat

India aims to increase the share of renewable energy in total installed energy capacity to 50 per cent by 2030. Almost 18 months since the policy was announced, while most of the states have enthusiastically taken the initiative forward, Gujarat has been a nonstarter.

The states of Maharashtra, Madhya Pradesh, Karnataka, Odisha and Andhra Pradesh have together received 3,518 applications till date for green energy through open access portal. Gujarat has yet to receive its maiden application, despite the fact that boosting green energy has been a priority for Prime Minister Narendra Modi and his government.

So much so that the Union Power Ministry recently served the state with a show-cause notice and Union Power Minister RK Singh has reportedly reprimanded the state’s nodal agency – Gujarat State Load Dispatch Centre – for its failure.

Blame it on bureaucratic inertia, or convoluted thinking.

The new rules seek to broad-base the use of green energy by reducing the threshold limit of “open access” to 100 kilowatt from 1 MW earlier – meaning consumers wanting access to clean energy must consume a minimum of 100 KW of electricity.Also, the portal is supposed to provide a unified platform for trading green energy from all sources such as solar, wind and bio-fuel.

The lowering of the threshold was expected to generate a positive response from power consumers, provided the tariffs were competitive, which appears not to be the case in Gujarat.

Almost 18 months have passed since the Centre announced the new policy, but Gujarat has yet to notify new regulations and tariffs for trade in green energy through the open access portal. Installed green energy capacity in Gujarat is estimated to be around 17,000 MW.

It took a year for the Gujarat Electricity Regulatory Commission to come with draft regulations and post them on its website in June this year for the perusal of the public.

According to Jasmin Gandhi, General Manager (Commerce), Gujarat Urja Vikas Nigam Limited (GUVNL), a three-judge committee has already held the public hearings that are required before such policies are notified.

Explaining the unduly long time taken to bring in place new rules and tariffs, DR Parmar, Director (Tariff) at GERC said: “The Commission must follow a set of procedures to stipulate Green Energy Open Access Regulations. Once the draft is ready there are public hearings before three judges. That has been completed now. We are awaiting the final judgment.”

In the absence of any new tariff structure and regulatory norms, the state government continues to levy an additional fuel charge of Rs 3.35 per unit, which can not be justified in the case of green energy. In addition, consumers also have to pay Rs 1 per unit in electricity duty.

All of that has made green energy, at Rs 11 per unit, more expensive than traditionally-sourced electricity that costs about Rs 9.5 per unit, which is why there have been no takers for the new policy.

"It is by default that fuel charges and electric duty are being levied on the consumers of green energy,” said an official who did not want to be named. Over and above this, the official said, domestic power producers, who are applying for green energy tenders abroad, also need green energy usage certificates for which the GERC charges another Rs. 1.50 per unit.

No wonder that the Green Energy Open Access Portal has so far drawn a blank in Gujarat.