India added 307 MW of open access solar capacity in the third quarter (Q3) of the calendar year (CY) 2021. Uttar Pradesh led the way in capacity additions in Q3 2021, accounting for 35% of all capacity increases. Tamil Nadu and Maharashtra rounded out the top three. The number of open access projects has increased in Tamil Nadu and Maharashtra. This is due to the presence of industrial consumers who see it as a viable alternative source of power. The multi-year tariff provides long-term visibility to assess the viability of an open access project.
According to the India Solar Open Access Market Report Q3 2021, India added 307 MW of open access solar capacity in the third quarter (Q3) of the calendar year (CY) 2021, a 47 percent increase from the 209 MW installed in Q2 2021.
Most states have seen sustained increase in solar open access capacity additions. With 109 MW, Uttar Pradesh led the way in capacity additions in Q3 2021, accounting for 35% of all capacity increases in the period. With 96 MW and 35 MW, respectively, Tamil Nadu and Maharashtra rounded out the top three.
As of September 2021, the total solar open access installation. The other two states in the top three in terms of cumulative installations were Tamil Nadu and Uttar Pradesh.
The expansion of open access in Uttar Pradesh can be attributed mostly to the availability of land and sufficient infrastructure for electricity evacuation.
Large sectors such as manufacturing, textiles, cement plants, food processing units, and chemical industries contribute to the high demand for power in Tamil Nadu and Maharashtra. Electricity is a significant contributor to running costs, and enterprises find solar open access to be an appropriate cost-cutting alternative.
The Tamil Nadu Electricity Regulatory Commission published draught modifications to the Tamil Nadu Electricity (Grid Connectivity and Intrastate Open Access) Regulations 2014 last month. The adjustments were made to determine the priority order for purchasing power from various sources under open access.
According to the report, stakeholders have recommended a multi-year tariff with a five-year minimum control term for the segment's growth. `
Maharashtra features a multi-year tariff system that benefits both developers and customers by providing a long-term view.
Most states currently have a yearly tariff structure that includes open access charges, i.e., cross-subsidy surcharges, wheeling charges, scheduling, and system operating charges that change every year, casting long-term contracting and project feasibility into doubt.
"In Tamil Nadu and Maharashtra, the HT industrial pricing is very high, and open access gives consumers with lower prices and clean energy benefits," stated a top executive from a large open access developer. As a result, one of the key factors pushing the expansion of open access in these two states is the high tariff. In the past, grid availability in Tamil Nadu was quite low, therefore consumers switched from DISCOMs to group captive."
"In Maharashtra, the multi-year tariff has also contributed to the growth of the open access market, but to a lesser amount." It is advantageous for long-term open access since it provides consumers with a long-term perspective on energy charges and fixed pricing. Furthermore, initiatives implemented by the governments in these states have contributed to the increase. One of the factors is the presence of industrial consumers in Tamil Nadu and Maharashtra. In the instance of Maharashtra, MSEDCL is not unable to supply power to industrial consumers. The fact remains that the cost of obtaining power from DISCOMs is expensive, and this is the primary reason why consumers are turning to open access," he noted.
One of the elements fueling the expansion of open access is that the commercial and industrial (C&I) sectors see it as a viable alternative source of power. This has resulted in a steady increase in the number of open access installations in these states.
"Maharashtra is an old market, and all the policies are in place," said another open access developer. Another cause is that the HT industrial costs are high, which has resulted in an increase of open access in the state. The multi-year tariff has also contributed to growth, albeit not much. It provides long-term visibility to assess the viability of the project. Regulations governing energy banking and other issues are clear in Tamil Nadu. Previously, in Tamil Nadu, DISCOMs refused to approve open access projects. However, things have changed, and projects are now being approved, which is boosting growth. In Uttar Pradesh, however, the situation is different because previous projects have now been installed, resulting in an increase in installations. However, this tendency will not continue because the market for open access in Uttar Pradesh is not very large. In the near future, we will see growth in Maharashtra and Tamil Nadu."
The Ministry of Power published the Draft Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2021 in August. The regulations apply to the acquisition and usage of green energy. Except for captive consumption, the rule applies to all consumers who have contracted demand or a sanctioned load of 100 kW or greater.
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