New Electricity Amendment Rules 2024

GS Paper II Governance

Context:

The Indian government has introduced the Electricity Amendment Rules 2024 under Section 176 of the Electricity Act 2003.

This amendment aims to simplify business processes for starting captive power, energy storage, and green hydrogen projects.

Setting Up Transmission Line: The new rules allow certain captive generators and bulk consumers to set up dedicated transmission lines without a license.
Tarrifs: The rule specifically targets and handles issues related to wheeling charges, state transmission charges, and additional surcharges.
The recently revised regulations also encompass consumers with a minimum load of 10 kilowatts for transmission systems within the same state.

Open Access Charges

Open access charges are levied by power distribution companies (discoms) on those consumers which buy electricity from any other source.

Open Access: There is provision for Linear reduction and elimination of additional surcharge for those availing General Network Access or Open Access within four years.
Individuals never served by a distribution licensee are exempt from the additional surcharge.
Tariffs are mandated to be cost reflective.
No gap is allowed between approved annual revenue requirements and estimated annual revenue, except under natural calamity conditions.
- Maximum allowable gap in such cases is 3% of the approved Annual Revenue Requirement.

Affordable Electricity: This provision will help bulk consumers by giving them access to affordable electricity and enhanced grid reliability.
Boost for High-Energy Consumers and Storage Systems: The exclusion of licensing obligations for dedicated transmission lines, specifically for entities with substantial energy demands or energy storage systems, incentivizes investments in renewable energy projects.
- This could lead to faster grid integration of renewable energy sources like solar and wind power.
Streamlining Procedures: Simplifying the procedure for setting up dedicated transmission lines reduces administrative obstacles for both major consumers and developers in the renewable energy sector.
- This process can help attract investments and increase the implementation of projects.

Possibility of Market Manipulation: Exemption of licensing dedicated transmission lines to large consumers could create opportunities for market manipulation and unfair competition.
Impact on State Transmission Utilities: Capping charges for short-term open access can diminish revenue for state transmission utilities.
- This reduction in income may affect their capacity to maintain and enhance infrastructure, leading to long-term grid reliability and efficiency challenges.

Also Refer: National Green Hydrogen Mission

News Source: Economic Times