Regulatory loopholes might find yourself favouring greater gamers: Experts

Alongside a draft proposal to streamline the regulatory framework for the nation’s energy transmission, new connectivity laws launched by the electrical energy regulator CERC are being red-flagged by market gamers.

The regulatory framework — known as General Network Access (GNA) laws — seeks to cast off pre-determined point-to-point transmission entry to as a substitute allow each entry or drawal on your complete transmission hall in a method that it offers mills and procurers the flexibleness of each injection and drawal.

While the brand new framework is being seen as a quantum leap in tiding over the issue of transmission constraints and fostering open entry to assist develop a seamlessly built-in electrical energy market, consultants say there are loopholes within the accompanying connectivity laws issued subsequently by the regulator. The concern is that these connectivity laws may probably find yourself favouring the larger gamers within the sector.

The greatest shortcoming within the accompanying connectivity laws pertains to the perceived dilution of the pre-conditions set for grant of connectivity. It is again to a full circle in some sense, provided that laws have been tightened after the Renewable Energy (RE) builders, notably the larger gamers, took benefit of the liberal grant of connectivity by the CERC in 2016 with none stringent  pre-conditions. The guidelines have been then tweaked in 2018 to include strict circumstances just like the letter of award (LOA), monetary closure standing, the acquisition of fifty per cent land to counter the squatting of grid connectivity by gamers and so on. Multiple gamers that The Indian Express spoke to mentioned an identical danger has once more arisen as within the new connectivity laws, these preconditions have been diluted or eliminated.

“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 professional who previously served in a regulatory function mentioned. The new connectivity regulation, notified in July, is slated to be opened from December 1, 2022.

The CERC had, in December final 12 months, come out with a draft proposal to facilitate regulatory framework for GNA. At current, an influence generator has to work out how the electrical energy will probably be wheeled to the patron below the point-to-point entry idea. GNA will allow them to provide from any level, so long as the quantum contracted for is met.

The GNA as a transmission service offers extra flexibility and the opportunity of open entry to the patrons and sellers of energy when it comes to scheduling, topic to grid constraints, and doesn’t undergo from the rigidity of the present point-to-point open entry mechanism. Currently, customers must pay long-term fees below the point-to-point connectivity regime, and shell out short-term fees for any deviations from the agreed path. All that adjustments with GNA, the place there’s full flexibility supplied to gamers on injection and drawal.

According to the GNA draft, the entities eligible as candidates for grant of GNA or for enhancement of the quantum of GNA embrace state transmission utilities on behalf of distribution licensees related to intra-State transmission system (ISTS) and different intra-State entities; a shopping for entity related 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 shopper, looking for to hook up with ISTS, instantly, with a load of fifty MW and above; buying and selling licensees engaged in cross-border commerce of electrical energy when it comes to the Cross Border Regulations; transmission licensee related to ISTS for drawal of auxiliary energy.

Other entities not coated by these laws however are related to the inter-State Transmission or for whom connectivity granted below connectivity laws has grow to be efficient, shall be eligible for making use of for grant of GNA to the inter-State transmission system for the quantum equal to the quantum of connectivity.