The Ministry of Power has notified the Electricity (Transmission System Planning, Development, and Recovery of Inter-State Transmission Charges) Rules 2021 to enable power utilities to access the transmission network across the country smoothly.
Power projects will no longer have to specify their target beneficiaries – a significant change from the existing system of applying for prior approval for access. The rules will also empower state power distribution and transmission companies to determine their transmission requirements and build them. States will be able to purchase electricity from short-term and medium-term contracts and optimize their power purchase costs.
Currently, generating companies apply for long-term access (LTA) based on their supply tie-ups, while medium-term and short-term transmission access is acquired within the available margins. Based on the LTA application, incremental transmission capacity is added. Several developments, such as the increasing focus on renewable energy, and the expansion of the market mechanism, necessitated a review of the existing transmission planning framework based on LTA.
The rules specify how the existing LTA would be transitioned into general network access (GNA). The rules also outline the recovery of GNA charges from the transmission network users and assign the responsibility of billing, collection, and disbursement of inter-state transmission charges to the Central Transmission Utility (CTU).
Apart from introducing GNA, the rules also specify the roles of the various agencies in the transmission planning process. The CTU will prepare a short-term plan every year for the next five years and a perspective plan every alternative year for the next ten years. It will also prepare an implementation plan for the inter-state transmission system (ISTS) every year for the next five years. The plans will be prepared on a rolling basis. The CTU will consider aspects such as right-of-way and progress of the generation and demand in various parts of the country while preparing the plan.
For the first time, the rules enable the transmission capacity to be sold, shared, or purchased by the states and generators. The regulations prescribe that excess drawal or injection over the approved GNA capacity will be charged at rates at least 25% higher. This will ensure that the entities do not under-declare their GNA capacity. The Central Electricity Regulatory Commission has been empowered to frame detailed GNA regulations in the inter-state transmission system.
The Union government has notified these rules to streamline the process of planning, development, and recovery of investment in the transmission system. The rules are aimed at encouraging investments in the generation and transmission sectors and developing deeper markets.
In August 2020, CERC issued a detailed procedure for granting ISTS connectivity to renewable projects. This procedure applied to CTU, regional load despatch centers, state load despatch centers, state transmission utility, distribution companies, and renewable energy implementing agencies like the Solar Energy Corporation of India.
In 2019, CERC issued draft regulations for sharing inter-state transmission charges and losses. It specified that the transmission charges would be shared among the designated ISTS customers so that the yearly transmission charges are fully covered and any adjustment on account of the revision of transmission charges is recovered.
Arjun Joshi is a staff reporter at Mercom India. Before joining Mercom, he worked as a technical writer for enterprise resource software companies based in India and abroad. He holds a bachelor’s degree in Journalism, Psychology, and Optional English from Garden City University, Bangalore. More articles from Arjun Joshi.