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Power ministry’s POSOCO to run green energy system

Kushagra nandan on Mint

Power ministry’s POSOCO to run green energy system

The power ministry has notified Power System Operation Corporation Ltd (POSOCO) as the central nodal agency to set up and run a single window green energy system. This follows the notification of the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022, on 6 June.

The rules are aimed at easing the process of accessing green sources of power by commercial and industrial consumers. Captive consumers can now take power under Green Open Access without any limits and distribution companies can demand a supply of green power from generation companies.

Under the new rules, any consumer can take power under Green Open Access.

The approval process will be quicker, according to the government. POSOCO will now have to approve or reject the applications for green power supply within 15 days. Otherwise, the application would be deemed approved. The threshold for such transactions has also been lowered to 100 kilowatts, from 1 megawatt earlier, to benefit smaller consumers.

There will also be a uniform renewable purchase obligation on users under the open access norms, including captive consumers and commercial entities, in areas assigned to the discoms.

Users seeking open access to a clean energy source, without being tied to discoms, will have fewer surcharges to pay.

Under the new norms, the tariff for the green energy will be determined separately by an appropriate commission, and will comprise the average pooled power purchase cost of the renewable energy, cross-subsidy charges if any, and service charges covering the prudent cost of the distribution licensee for providing the green energy.

The government has also mandated banking of surplus green energy with the distribution licensee.

“The rules will help streamline the overall approval process for granting open access, including timely approval, to improve predictability of cash flow for renewable power producers. It will also bring uniformity in the application procedure," the ministry said while notifying the rules.

Consumers of green power will be given green certificates and cross subsidy surcharge and additional surcharge won’t be applicable if green energy is utilized for production of green hydrogen and green ammonia.

The 2003 Electricity Act allowed consumers to buy power directly from the generators by using the grid under open access arrangement. However, the growth of the open access segment has not been as anticipated in the past two decades.

“The commercial and industrial segment accounts for about 50% of electricity consumption in India and the demand for green energy from this segment, especially from open access projects, has been growing rapidly in the last few years," Kushagra Nandan, co-founder and MD, SunSource Energy said on Friday.

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