Haryana Open Access Move Shows High Potential From C&I market for Renewables

With Amplus Energy announcing a 750 crore investment to establish 150 MW of solar capacity in Haryana, the C&I (corporate and industrial) market has a new state to cheer for.

The announcement by Amplus follows the change to the state rules brought in by the Haryana Renewable Energy Development Agency (HAREDA) in March 2019, when it amended its guidelines for captive consumption or third party sale of power. From ground mounted as well as rooftop setups in megawatt scale.

The new guidelines waive wheeling charges, cross-subsidy charges, transmission and distribution charges and additional surcharges for third-party sale or open access consumers of energy for a period of 10 years, for projects commissioned during this period.

We had written earlier about how Haryana was likely to move fast here, as not only does the state lag on renewable energy, but it already has a ready market of corporates and industries that would be keen to switch to renewable energy.  The combination has meant that the changes, when brought in, have led to immediate results, with Amplus, fresh from its new ownership under Petronas, having both the funds and the experience to execute fast.

The firm will be generating power with its projects at Sirsa and Bhiwani districts where it has acquired 575 acres of land under a long-term lease. The firm has expressed confidence that the projects will be operational this year, and has ready takers for the power it generates. For corporates signing up, pricing is likely to be in the range of Rs 4 or thereabouts. For the uninitiated, this is how the process would work. Amplus will generate the power and inject into the grid and will be credited with a net volume after accounting for usual transmission losses.  A corporate buying x number of units from Amplus would set off the same against its overall consumption of power.

The Haryana example could be the push required by states, especially UP, Bihar and Rajasthan, to move on and replicate, as the former two especially are well behind on their solar generation targets, and the existing discoms are incapable of adapting to the new realities fast enough. Rajasthan, of course, has a better situation, with strong industrial demand too.

In contrast has been the experience at Karnataka, the pioneer in the space, where it took the Karnataka High Court to quash a move by the Karnataka electricity regulatory commission (KERC) in March 2019, when it tried to bring back charges, contrary to state guidelines. One hopes that consistency of policy, a critical part of doing business in any sector, will be held sacrosanct by HAREDA and other states that follow too. They have had more than enough time to make up their mind on this.