open access power
The cost of renewable energy has witnessed a steady decline owing to, among other things, technological development, conducive policies and economies of scale. Even with subsidies declining through the last 5 years, there is a significant long-term, competitive advantage to be gained through its use. This presents a huge opportunity to investors and large energy consumers alike.
Renewable power is accessible through 2 modes on a pay per use basis: the traditional Third Party Sale Mode and the Group Captive Mechanism.
Third Party Sale Mode
A provision for the sale and purchase of third party power through open access was created in The Electricity Act, 2003 as long as the schedule of charges determined by the respective State/Central Electricity Regulatory Commissions for utilization of the electricity grid and services are paid to the corresponding agencies.
Group Captive Mechanism
The mechanism was created under the Electricity Act, 2003 wherein a group of consumers can together set up a power plant for captive consumption. The idea is to lower investment burden for a single end consumer by facilitating group investment.
The base rule: Any individual company or an association of people/entities having at least 26% shares in a generating company and consuming more than 51% of power generated can be treated as captive consumers.
Crucially, the group captive mechanism eliminates the cross subsidy surcharge, applicable for regular third party sale of power reducing the cost of power.
Advantages of Open Access Power
SERVICES WE OFFER
a. Viability of sale through Group Captive/Third Party mechanisms
b. Group Captive Advisory, if required
1. Identification of structuring solutions considering:
c. Assistance in Consumer Identification: Navigation through Regulatory and Energy Accounting Systems
d. Transaction Advisory and Execution
© Energyhive Renewables LLP 2014