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.

Provisions of the New Electricity Amendment Rules 2024

• 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: 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.

Benefits of the New Electricity Amendment Rules 2024

• 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.

Drawbacks of the New Electricity Amendment Rules 2024

• 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