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Open Access - Innovation Required

India being the 5

th

largest energy consumer in the world is increasing its installedcapacity (210 GW; Source: CEA as on 18.12.2012) day by day. Inspite of various revival

strategies, the sector still needs to open up amongst various other reforms; Open Access

being the prime concern.

Open Access is arguably the paradigm shift brought about in the landmark Electricity

Act 2003 to introduce competition in the power sector. It is the back bone of competition

and the corner stone of the Act as per the Planning Commission of India.

According to Electricity Act 2003open access means the non-discriminatory

provision for the use of transmission lines or distribution system or associated facilities with

such lines or system by any licensee or consumer or a person engaged in generation in

accordance with the regulations specified by the Appropriate Commission.

In simple terms Open Access provides the right to the generators/bulk consumers toaccess the transmission and distribution networks to sell the generated electricity/ buy bulk

power, without any discrimination by the distribution/transmission line owner.

Need for Open Access:

- Choice to consumers to select supplier explore cheaper sources.- Choice to Suppliers to sale its power to consumers higher revenue.- Introducing competition growth of sector.

Bottlenecks:

- Open Access Charges and Cross Subsidy Surcharge.- Resistance of incumbent licensees.- Independent functioning of SLDCs.- Capacity of Transmission and Distribution systems.- State Governments issuing orders under Sec 11.

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Way Forward

- Removal of cross subsidy and surcharge need to be done with a time boundprogram.

- Base Open Access charges / losses on commercial principles to optimize use ofexisting assets and to encourage investment.

- Open access process, charges and priorities need to be non-discriminatory.- Commercial mechanism for settlement (deviation in scheduling) need to be

introduced at all levels.

- Independent functioning and capacity building of SLDCs is an essential part of theprocess.

- SLDCs should be made separate entity as soon as possible.- Set up of dedicated transmission lines can help in implementing Open Access.-

Exempt levy of cross subsidy surcharge for all Open Access consumers purchasingpower from Renewable Energy sources.

- Electricity Act 2003 should be amended to curb the alleged misuse of Section 11 bystate governments.

- In the event of any directions issued under Section 11, the appropriate commissionshould be given the power to compensate the Generating Company for any loss that

may be suffered by such Generating Company in following the directions of the

Government.

- With regards to section 11 - define public interest clearly.

As said earlier Open Access is the cornerstone of the Electricity Act 2003, hence if

implemented in the right spirit, Open Access will transform the Indian Power Sector and

propel India to an orbit of high GDP growth.

Reference:

- CPSI Journal (2011), Future Prospects of Coal Scenario in India, Vol -3,Number 5, 32-33.

- www.cea.nic.in dated 18.Dec.2012.- IPPAI Roundtable on Suggestions for Amendments to the Electricity

Act 2003.

http://www.cea.nic.in/http://www.cea.nic.in/