Open Access In The Power Sector

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OPEN ACCESS IN THE POWER SECTOR Everything You Need To Know

OPEN ACCESS IN THE POWER SECTOR

Introduction

Are you wanting to know what open access is in the power sector and how it helps this sector? If that is what you want then this blog is the right piece of information for you.

Heavy customers with linked loads more than 1 MW can purchase inexpensive power from the open market thanks to open access. The idea is to provide customers a variety of competitive power providers to select from rather than making them buy electricity from the monopolistic local utility. By guaranteeing consistent electricity supply at affordable prices, it not only benefits industrial and commercial consumers but also grows the activity of power markets. Additionally, open access aids consumers in fulfilling their Renewable Purchase Obligations (RPOs). 

A user with a large load can take advantage of low-cost and green solar power by either purchasing from rooftop solar installations on its property or by purchasing from an offsite solar farm with open access. Open access eliminates rooftop solar’s drawbacks, including scalability and expensive capital costs, but it is frequently subject to unpredictably occurring grid concerns.

Since many power producers, including Solar energy companies, may now send power from their solar parks to various load centers, Open Access will alleviate the power crisis. When consumers have the option to buy electricity on the open market, it will inevitably result in competitive pricing, which will drive down the price of electricity.

In India, the Electricity Act of 2003, which established rules for competition in the power industry, governs Open Access rights. Open Access can be divided into the following categories according to where the buying and selling entities are located:-

  • Inter-State Open Access:

In this, the buying and selling entities are from separate states, and they are both required to abide by Central Electricity Regulatory Commission(CERC) rules. The purchasing rights under interstate open access may be for Short Term, or for a period of less than one month; Medium Term, or for a period of three months to three years; and Long Term, or for a period of twelve to twenty-five years.

  • Intra-State Open Access

As implied by the name, in this situation both the buying and selling entities are in the same state. It adheres to rules established by the State Electricity Regulatory Commission (SERC). It can also be divided into three categories: short term, medium term, and long term. The lengths of these terms vary according to the laws in each state.

Electricity buyers and sellers have the choice of bilateral or collective transactions. In a collective transaction, exchanges that have a very minimal margin set up for exchange members facilitate the trading of power. In the case of a bilateral transaction, a Power Purchase Agreement is signed by the seller and the buyer for the purpose of purchasing power at a price that has been mutually agreed upon for a specified period of time. For the purpose of determining tariffs with commercial and industrial clients, many of the major solar firms operating in India under the OPEX model turn to bilateral agreements.

As was previously mentioned, operators using the grid under open access are subject to a variety of fees. These fees might differ from one state to the next and are often lower in states with a stable grid and a supportive regulatory structure. When it comes to solar energy, state-by-state open access fees might range from INR 0.2/KWh in Andhra Pradesh to INR 1.5/KWh in Uttarakhand. Currently, Madhya Pradesh, Andhra Pradesh, Karnataka, and Chhattisgarh are home to the majority of open access solar projects in India.

Long-term open access projects may become feasible in the future with the help of a supportive regulatory framework from the state power authorities and improved grid reliability. The situation of power trading in the nation will undoubtedly improve as a result of these improvements, which will encourage more projects from renewable energy companies who are currently assuming enormous upfront risks. 

Open Access has a lot to do in the power sector and investing is never a bad option. GSE Renewables is the best solution for you if you are in the lookout for a company which can provide open access for your business. Our company will be more than happy to help you in giving you the best facilities.

Contact Us today for more details!

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