Will Open Access system remain open ?
Open access system allows generating companies to sell power directly to distribution companies and bulk consumers of 1MW and above is going to be implemented soon. The ministry of power has instructed states to implement the open-access system of Electricity Act, 2003.
The question is whether it will remain open or not. There are lots of issues that need to be considered before open access system creates an open market in the power sector. Issues like availability of power on demand and negotiation of prices are major concerns for the system to be implemented smoothly.It took eight years to actually get started when the ministry of power sent its November 30 letter titled “Opinion from M/o. Law and Justice on the operationalisation of open access in power sector”, to all electricity regulatory commissions, state governments and the state power utilities.
The two major points mentioned in the letter is :
- That consumers with demand exceeding one megawatt (Mw) are perforce required to draw supplies from sources other than their local distribution company.
- Even if these consumers do continue to draw electricity from the local distribution company (discom), the rates must be negotiated between the two and, therefore, the state electricity regulatory commissions must cease to determine the retail energy tariffs by restricting themselves to determining only the wheeling charges and cross-subsidy surcharge.
In an article on the Business Standard the current scenario of the open access system in the Indian Power market is highlighted.
If the open access market opens it will reform the Indian power market where the generators could take investment decisions based on demand, without relying on power utilities or the State Government.
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