Integration of the power transmission system in India was an urgent need for, on one hand, creating equilibrium in generation and consumption patterns throughout the country and, on the other, maintaining grid stability. Thus, in October 2021, the Ministry of Power, Government of India, notified the Transmission Planning Rules[1],  which introduced the ‘General Network Access’ (GNA), i.e., ‘one-nation one-grid one-frequency’ regime in India. To implement it, the Central Electricity Regulatory Commission (CERC), on October 15, 2022, issued the CERC (Connectivity and General Network Access to the inter-State Transmission System) Regulations, 2022 (GNA Regulations)[2].  

The GNA Regulations provide non-discriminatory access to the central transmission network to all power producers. While taking the access, power producers are only required to indicate the capacity and the time-block within which such capacity has to be transmitted. The GNA Regulations have done away with the pre-requisites to connectivity under the earlier regime such as identification of potential off-takers, point of drawl or proof of tied-up capacity, etc. The GNA Regulations, thus, are an immediate success in simplifying the processes for grant of connectivity.

Connectivity to Grid under the GNA Regulations

Under the earlier regulations, open access[3] was categorized as long term, medium term and short-term open access, based on the term for which it was required. The GNA Regulations has simplified this categorization as: (a) upto eleven months (Temporary GNA); and (b) more than eleven months. The provisions regulating Temporary GNA under the GNA Regulations are yet to be notified by the CERC.

In terms of seeking access to the grid, the GNA Regulations mark a shift from the erstwhile regime. While, under the earlier regulatory framework, either the generator or the off-taker could obtain the connectivity for transmission of power according to their contractual arrangement, the GNA Regulations exempt power producers who are already connected to the grid to obtain separate access for transmission of power. However, off-takers are still required to obtain access to the transmission network for transmitting power from the point of drawl to the point of consumption.

Other Key Provisions of the GNA Regulations

• Transmission System Augmentation – The Central Transmission Utility (CTU) (i.e., the operator and controller of the central transmission system in India) will undertake the system strengthening and augmentation required for the grant of GNA (other than a Temporary GNA) to the applicant, at the option and cost of the applicant, where the minimum load/capacity is more than 50 (fifty) MW.
• Scheduling[4] of Power – Power System Operation Corporation Limited, through its letter dated November 10, 2022, has issued the Draft Scheduling Procedure[5] which is yet to be notified, for allocation of identified transmission lines and scheduling of power from the power projects.
• Transfer of Connectivity and GNA – A power producer (if a parent company), who has obtained a connectivity, is free to transfer a connectivity to its subsidiary and vice-versa without a requirement to hold 100% (one hundred per cent) shareholding in the subsidiary[6]. The renewable power producers are free to also split the quantum of connectivity granted to them in parts wherein the entire connectivity capacity can be split into segments with each segment having a minimum load/ capacity of 50 (fifty) MW for the installation(s) after the commissioning of such installation[7].

• Dedicated Access to the Transmission System – The GNA Regulations have provided the renewable power producers and off-takers a dedicated access to the central transmission system under: (a) GNA for renewable energy; and (b) Temporary GNA for renewable energy.

• Dual-Connectivity – The GNA Regulations has introduced dual-connectivity, wherein an intra-state-grid-connected power producer is eligible for grant of connectivity to the central transmission system (for a minimum load/capacity of 50 (fifty) MW). Such dual connectivity will allow the power producers to sell power at the most competitive price, as increase in number of potential suppliers and off-takers will make the market more competitive.
• Transition – The existing power producers connected to the central transmission system will be deemed to be granted connectivity under the GNA Regulations. The pending applicants for connectivity and/or open access under the Connectivity Regulations will be required to submit a fresh application for obtaining a connectivity.

Our Analysis

The GNA Regulations has introduced a long-awaited measure for adopting one-nation one-grid and has given relief in the form of certainty of scheduling especially to the renewable power producers, where the scheduling forecast tend to vary within a short period. While we have achieved grid parity (with negligible variance) in the tariff of renewable and non-renewable energy, the GNA Regulations also allow an intra-state-grid-connected power producer to also be connected to the central transmission system, thus making the power market more competitive. If the advancement in battery storage system is accelerated with these changes, India will be able to achieve the target of power-for-all at-all-times sooner than anticipated since the power generated during peak generation time can be stored and coupled with the GNA, it can be wheeled to regions facing power shortage.

However, the GNA Regulations failed to provide a robust mechanism for addressing the loss of opportunity cost on account of the transmission corridors being un-utilised by the power producers upon allotment. While the GNA Regulations provide for encashment of bank guarantees in case of relinquishment of connectivity and for payment of relinquishment charges by off-taker in case of relinquishment of GNA, the loss of public money and non-utilisation or under-utilisation of public infrastructure cannot always be fully compensated by encashment of bank guarantees and payment of relinquishment charges by such applicants.

The Draft Scheduling Procedure does not address false blockage of transmission corridor by the power producers and failure to inject power as scheduled. Further, the GNA Regulations do not set out the interplay between the Green Energy Open Access Rules[8] and the regime of GNA for renewable energy and Temporary GNA for renewable energy. A view that might be taken that those entities not eligible for grant of GNA under the GNA Regulations may obtain green energy open access under the Green Energy Open Access Rules. However, since GNA Regulations does not provide any benefit, in such cases, the entities are free to opt for open access under the Green Energy Open Access Rules to be eligible for other benefits provided under these rules.

The GNA Regulations are a welcome step to address the fast-paced changes in the transmission sector in India by promoting competition, reduction of the cost of power, centralized control over the central transmission system and accounting for power imbalance across the states. The central transmission system of India is connected to the transmission systems of Myanmar, Bangladesh and Nepal, and the members from Nepal have been trading on the Indian power exchanges, thus expanding the market and providing solutions to power crisis. However, analysis of the possibilities of future has its own limitations. It must also be appreciated that the motivation during formulation of the Connectivity Regulations were that of electrification, spread of transmission network and guaranteed performance of power purchase agreements, and Connectivity Regulations have run their course and GNA Regulations have paved a way to the future of the transmission sector for India.

Footnotes:

[1]   The Electricity (Transmission System Planning, Development and Recovery of Inter-State Transmission Charges) Rules, 2021 (Transmission Planning Rules).
[2]   The GNA Regulations repealed the CERC (Grant of Connectivity, Long-term Access and Medium-term Open Access in inter-State Transmission and related matters) Regulations, 2009 and are now the principal regulations that regulate grant of connectivity to power projects to the grid and transmission of electricity. The GNA Regulations is being made effective in tranches and the first leg has been made effective from the date of its notification.
[3]   Under the Electricity Act, 2003, an entity connected to the central transmission system is required to obtain access to the transmission lines for transmission of power. This access is provided on a non-discriminatory basis in the form of an open access.
[4]   In order to evacuate power from the power project, the power producer is required to schedule delivery of power through the transmission lines under the prevailing scheduling and dispatch regulations.
[5]   Draft Procedure for Allocation of Transmission Corridor for Scheduling of GNA and T-GNA transactions (Draft Scheduling Procedure).
[6]   Regulation 15 of the GNA Regulations.
[7]   Regulation 23 of the GNA Regulations.
[8] Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022 (“Green Energy Open Access Rules”).