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					</table><p>Consumers of electricity in a few Indian states could soon become &#8216;prosumers&#8217; by installing rooftop solar and selling excess power generated directly to other consumers, but questions remain.</p>
<p>The Karnataka Electricity Regulatory Commission (<a href="https://kerc.karnataka.gov.in/en" target="_blank" rel="noopener">KERC</a>) recently <a href="https://www.mercomindia.com/karnataka-peer-to-peer-solar-energy-trading" target="_blank" rel="noopener">released</a> a draft proposal to enable peer-to-peer solar energy trading in the state using blockchain technology. KERC aims to implement this framework after consultations and has invited comments from stakeholders within 30 days.</p>
<p>Karnataka isn&#8217;t alone; <a href="https://www.mercomindia.com/delhi-electricity-trading-blockchain" target="_blank" rel="noopener">Delhi</a> and <a href="https://www.mercomindia.com/uttar-pradesh-blockchain-rooftop-solar-trading" target="_blank" rel="noopener">Uttar Pradesh</a> have also released draft proposals to facilitate peer-to-peer solar trading.</p>
<p>&#8220;This policy can benefit people with rooftop solar as they can sell excess energy directly to other consumers. At the same time, consumers will benefit as they can get power at cheaper rates than distribution companies (DISCOMs),&#8221; said Ramesh Shivanna, Founder of Pride Group of Companies, engaged in building renewable energy assets.</p>
<p>&#8220;You will be able to sell energy like shares are traded in the stock market,&#8221; he added.</p>
<p>To participate, prosumers and consumers need to register with DISCOMs and install smart meters at their own cost. A blockchain platform will be used for registration, trading, and settlement facilitated by service providers.</p>
<p>While Shivanna believes that implementing this policy will increase rooftop solar adoption, he said that installing smart meters might become a sticking point.</p>
<p>&#8220;The government is already behind on smart meter adoption, and this may become an implementation challenge,&#8221; he said, adding that the government will need to run awareness campaigns as most people are unaware of this development.</p>
<p>Smart meters facilitate detailed analysis of energy consumption and negate the need for manual reading of the meter. This will help DISCOMs generate the final bill comprising the peer-to-peer transaction, power purchase from DISCOM, platform fees, and open access charges.</p>
<p>Shivanna also recommended that wheeling and grid charges should be exempted initially to accelerate the adoption of peer-to-peer trading.</p>
<p><strong>Operational Difficulties</strong></p>
<p>While holding much promise, the policies proposed in these states lack clarity around effortless implementation, operation, and dispute resolution.</p>
<p>Amit Kumar, managing director at <a href="https://www.altilium.co.in/" target="_blank" rel="noopener">Altilium Consulting</a>, casts doubt on the implementation of the policy. &#8220;There is no provision of customer-to-customer sale that amounts to trading in the Electricity Act, 2003. Thousands of people will go to court as all the traders will be against it,&#8221; he said.</p>
<p>Kumar also asked what jurisdiction will resolve issues pertaining to lack of supply or transactions. &#8220;You will have to bring in a private party. So, you will have to authorize an alien entity to make decisions,&#8221; he said.</p>
<p>DISCOMs are particularly not known for consumer-friendly services, which casts a shadow on the smooth implementation of P2P trading. Only four DISCOMs out of 62 <a href="https://www.mercomindia.com/private-discoms-top-ratings-for-fy-2022-23" target="_blank" rel="noopener">scored</a> an A+ rating in an assessment of consumer service performance in the third edition of the Consumer Service Rating of Distribution Companies, which reviewed ten private and 52 state-owned DISCOMs serving over 320 million customers.</p>
<p>M G Prabhakar, a former member of the advisory committee at KERC, said the draft regulation has &#8220;operational difficulties.&#8221; &#8220;There are a lot of dark areas in the draft. The average consumer will not adopt this policy if there is uncertainty.&#8221;</p>
<p>Echoing Kumar&#8217;s concerns, Prabhakar questioned the lack of a framework for grievance redressal in the draft. &#8220;Who will be the authority in case of a dispute? Consumer courts or the KERC? A business can go to the courts for redressal, but will the average consumer go to KERC for small problems?&#8221;</p>
<p>Prabhakar suggested setting up a dedicated agency to facilitate consumers in case of disputes and grievances.</p>
<p>These regulations have the potential on paper to transform the energy landscape, particularly in Karnataka. However, the lack of clarity surrounding jurisdictional issues and dispute resolution mechanisms remains a significant concern.</p>
<p>Additionally, the absence of provisions for customer-to-customer sales in the Electricity Act 2003 may hinder the enactment of the draft policy.</p>
<p>In its current form, this draft policy seems highly impractical.</p>


P2P Solar Energy Trading: An Innovative Approach Fraught with Challenges


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					</table><p>The Karnataka Electricity Regulatory Commission (<a href="https://kerc.karnataka.gov.in/en" target="_blank" rel="noopener">KERC</a>) has released a draft proposal to allow peer-to-peer solar energy trading in the state using blockchain technology whereby electricity consumers can become &#8216;prosumers&#8217; by installing rooftop solar modules and selling excess power generated to consumers directly.</p>
<p>As per the draft regulations, called KERC (Implementation of Peer-to-Peer Solar Energy Transaction through blockchain-based platform) Regulations 2024, prosumers and consumers will have to register with and seek approval from distribution licensees (DISCOMs) on a first-come, first-serve basis to participate in peer-to-peer trading.</p>
<p>The DISCOM and the service provider will then have 15 days to check the compatibility of the peers’ systems for the readiness of exchange. In case of a rejection of the application, a written reason must be provided. However, if accepted, the peer-to-peer participants must provide a schedule in advance for the exchange of energy, both for day-ahead and intraday transactions.</p>
<p>Trading can either be preferential or dynamic. In preferential trading, prosumers will pick their preferred consumers and offer them a percentage of their excess power at a specific price or a mutually agreed upon tariff.</p>
<p>In dynamic trading, prosumers and consumers set their own prices, and the trade may be finalized through a predetermined framework. The final price can be the highest price offered by a buyer, the lowest price offered by a seller, or a market price set by a methodology.</p>
<p>However, if excess energy is unavailable in the peer-to-peer network, the consumer’s needs will be met by the DISCOM. Similarly, if there are no buyers for excess energy, it will be sold to the DISCOM through a power purchase agreement executed between the prosumer and the DISCOM.</p>
<p>To participate in a peer-to-peer transaction, the installed rooftop solar power project must either have net metering or gross metering, and the capacity must not be less than one kW and not more than 2 MW.</p>
<p>Prosumers/consumers must install post-paid smart meters, as per standards specified by the Central Electricity Authority, at their own cost to account for electricity imported and exported.</p>
<p>In case of an outage in the distribution system, no penalty can be imposed on a prosumer or consumer for the failure to complete an energy transaction.</p>
<p>The framework also outlined responsibilities for service providers who will enable peer-to-peer energy trading. The service providers will be responsible for providing and maintaining a blockchain platform to enable registration, trading, and seamless transaction settlement between peer-to-peer partners and ensure that its cloud and communication facilities are flexible enough to accommodate operational or regulatory changes.</p>
<p><strong>Accounting and settlement</strong></p>
<p>The DISCOM must generate the bill as per the provisions of the Tariff Order and Supply Code. It will comprise the peer-to-peer transaction, purchase from DISCOM, fees charged by the service provider, and open access charges.</p>
<p>If a prosumer injects more energy than agreed upon, the settlement of excess energy will be based on the net-feed arrangement between the prosumer and DISCOM. And if the prosumer injects less energy than agreed upon, a payment equivalent to the difference between the going energy rate and mutually agreed upon price must be made.</p>
<p>Alternatively, if a consumer draws less energy than agreed upon, the consumer must pay in full for the energy pledged on the peer-to-peer platform. And if the consumer draws more energy than the contracted demand, a penalty will be imposed as per the Tariff Order or Conditions of Supply, and the settlement will be done first towards the peer-to-peer platform and then to the DISCOM.</p>
<p>The service provider will be required to fetch block-wise meter data each day for actual energy consumption and generation. Any fees charged by the service provider will be prescribed by KERC.</p>
<p>The draft also prescribes that unsettled amounts beyond the due date will result in deactivation from the peer-to-peer platform.</p>
<p>KERC aims to implement this draft policy after consultations with citizens and industry players and has invited comments on the draft from stakeholders within 30 days.</p>
<p>The commission also reserves the right to alter, suspend, modify, or repeal any provision of the provided framework.</p>
<p>In May last year, The Delhi Electricity Regulatory Commission also proposed to <a href="https://www.mercomindia.com/delhi-electricity-trading-blockchain" target="_blank" rel="noopener">amend</a> the state’s net metering regulations for renewable energy to enable peer-to-peer transactions through blockchain or other technologies.</p>
<p>Subscribe to Mercom’s real-time <a href="https://www.mercomindia.com/product/mercoms-renewable-energy-regulatory-updates" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.</p>


Karnataka to Enable Peer-to-Peer Solar Energy Trading Using Blockchain

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