Context- The Ministry of Power has recently issued Electricity (amendment) Rules 2024, under the aegis of the Electricity Act, 2003.
About
- Exemption in license requirement: The policies permit customers which have specific electricity load and Energy Storage Systems (ESS) to set up, perform and maintain their devoted transmission lines themselves without the requirement of license.
- The rule covers the ones groups / folks who’ve loaded extra than 25 megawatt and 10 megawatt on inter-state and intra-country transmission networks.
- New formula to lessen open access charges: It prescribed, if someone availing General Network Access (GNA) or Open Access, the additional surcharge shall be linearly reduced and get eliminated inside 4 years from the date of grant of access.
- Cost reflective tariff: There shall now not be any gap between accepted Annual Revenue Requirement and estimated annual revenue from accepted tariff except underneath herbal calamity conditions.
- Such an opening, created if any, shall not be extra than three percent of the accepted Annual Revenue Requirement.
Open access charges
- Open get right of entry to expenses are levied by means of energy distribution businesses (discoms) on the ones purchasers which purchase power from any other supply.
- These charges were capped by way of the union ministry of electricity however the discoms began levying a lot of other charges consisting of additional surcharge.
Significance
- Affordable energy: The policies will make certain the reduction of discom losses and improved efficiency, leading to them being capable of offering higher services to the customers.
- Industrial development: Doing away with the requirement of license for dedicated transmission strains for enterprise will cause ease of doing business for the industry.
- Promotion of renewable electricity: Rationalization of open access charges will cause quicker adoption of renewable energy by the industry and lowering emission.
- 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
- 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.
Source: PIB
Practice question:
Q. What is one of the major issues addressed by the Electricity (Amendment) Bill, 2022?
- Agricultural reforms
- Telecommunication regulations
- Financial health of State Discoms
- Environmental conservation initiatives
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