90% Surge In Installations After Green Energy Open Access: IEEFA

A new report claims that regulatory clarity on green energy open access led to an upsurge in annual renewable energy installations. The Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics prepared the report.

The report said that the Green Energy Open Access Rules (GEOA) 2022 aided in creating new installation records in FY2023 and FY2024. The report said that the Commercial and Industrial (C&I) open access market witnessed a massive 90.4% jump in annual installed capacity between the fiscal year (FY) 2023 and FY2024.

By the end of FY2024, cumulative capacity reached 18.7 gigawatts (GW). Gujarat and Rajasthan have been at the forefront of this growth, adding 1.43GW and 0.98GW in FY2024, respectively.

Streamlined process & reduced cost 

“The Ministry of Power introduced the GEOA Rules to promote the generation, purchase and consumption of green energy to accelerate India’s renewable energy initiatives. By streamlining processes and reducing costs, the GEOA Rules have created a user-friendly and investor-friendly framework, driving momentum in India’s renewable energy sector,” says the report’s contributing author, Vibhuti Garg, Director – South Asia, IEEFA.

To boost investment in renewable energy projects, the Ministry of Power has also introduced exemptions on additional surcharges, which benefited offshore wind and green hydrogen projects.  Over the last two years, alongside the surge in installed capacity, the market has also seen new entrants.

Consolidating regulations

“Consolidating regulations at both the central and state levels has created a more cohesive regulatory framework, fostering transparency and ease of operations,” says the report’s co-author, Prabhakar Sharma, Senior Consultant, JMK Research.

Despite the initial success of the GEOA Rules, some challenges persist, especially at the state level, the report said. “Deviations from the central GEOA Rules in certain states could hinder the prospects of the open access market. It is also important for states to focus on translating the rules into real development,” says Sharma.

Further, the report highlights that the adoption of the GEOA Rules among the targeted consumer bases, Micro, Small and Medium Enterprises (MSMEs) and small-scale C&I entities with less than 1 megawatt-peak contract demand has been disappointing.

Challenges in Green Energy Open Access

“The GEOA Rules cannot be deemed a complete success unless green open access penetration among smaller consumers improves,” he adds. Similarly, augmenting grid infrastructure, particularly substation capacity and circuit length, will be crucial for efficiently integrating power output from intra-state and inter-state green open-access projects.

“Improved grid infrastructure will facilitate better project connectivity, expedite execution and reduce transmission costs,” says Sharma.

“Future additions to the GEOA Rules are likely to incorporate provisions for emerging technologies like Inter-State Transmission System open access and power exchange-based projects. These amendments are vital to shaping the overall development of the green open access market,” he adds.