Alongside a draft proposal to streamline the regulatory framework for the country’s power transmission, new connectivity regulations released by the electricity regulator CERC are being red-flagged by market players.
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The regulatory framework — called General Network Access (GNA) regulations — seeks to do away with pre-determined point-to-point transmission access to instead enable both access or drawal on the entire transmission corridor in a way that it provides generators and procurers the flexibility of both injection and drawal.
While the new framework is being seen as a quantum leap in tiding over the problem of transmission constraints and fostering open access to help develop a seamlessly integrated electricity market, experts say there are loopholes in the accompanying connectivity regulations issued subsequently by the regulator. The concern is that these connectivity regulations could potentially end up favouring the bigger players in the sector.
The biggest shortcoming in the accompanying connectivity regulations pertains to the perceived dilution of the pre-conditions set for grant of connectivity. It is back to a full circle in some sense, given that regulations were tightened after the Renewable Energy (RE) developers, particularly the bigger players, took advantage of the liberal grant of connectivity by the CERC in 2016 without any stringent pre-conditions. The rules were then tweaked in 2018 to incorporate strict conditions like the letter of award (LOA), financial closure status, the acquisition of 50 per cent land to counter the squatting of grid connectivity by players etc. Multiple players that The Indian Express spoke to said a similar risk has again arisen as in the new connectivity regulations, these preconditions have been diluted or removed.
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“Big RE developers will end up potentially capturing the most lucrative RE pooling stations with multiple applications and apply for a staggered date of completion depending on anticipated investment resources. Those who do not have deep pockets to pay the connectivity bank guarantees simultaneously for large numbers of applications could be the losers,” an expert who formerly served in a regulatory role said. The new connectivity regulation, notified in July, is slated to be opened from December 1, 2022.
The CERC had, in December last year, come out with a draft proposal to facilitate regulatory framework for GNA. At present, a power generator has to work out how the electricity will be wheeled to the consumer under the point-to-point access concept. GNA will enable them to supply from any point, as long as the quantum contracted for is met.
The GNA as a transmission service provides more flexibility and the possibility of open access to the buyers and sellers of power in terms of scheduling, subject to grid constraints, and does not suffer from the rigidity of the current point-to-point open access mechanism. Currently, users have to pay long-term charges under the point-to-point connectivity regime, and shell out short-term charges for any deviations from the agreed path. All that changes with GNA, where there is complete flexibility offered to players on injection and drawal.
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According to the GNA draft, the entities eligible as applicants for grant of GNA or for enhancement of the quantum of GNA include state transmission utilities on behalf of distribution licensees connected to intra-State transmission system (ISTS) and other intra-State entities; a buying entity connected to intra-State transmission system; Draft Central Electricity Regulatory Commission (Connectivity and General Network Access to the inter-State transmission System) Regulations, 2021; a distribution licensee or a bulk consumer, seeking to connect to ISTS, directly, with a load of 50 MW and above; trading licensees engaged in cross-border trade of electricity in terms of the Cross Border Regulations; transmission licensee connected to ISTS for drawal of auxiliary power.
Other entities not covered by these regulations but are connected to the inter-State Transmission or for whom connectivity granted under connectivity regulations has become effective, shall be eligible for applying for grant of GNA to the inter-State transmission system for the quantum equal to the quantum of connectivity.
