Modi Govt Promulgates New Electricity Rules To Overhaul Transmission System, To Improve Access And Enable Quick Expansion

The Union Ministry of Power has promulgated the Electricity (Transmission System Planning, Development and Recovery of Inter-State Transmission Charges) Rules 2021. This change paves the way for overhauling transmission system planning, giving power sector utilities easier access to the electricity transmission network across the country.

The transmission system is the vital linkage in the power sector value chain connecting the generation and the demand.

Currently, generating companies apply for long-term access (LTA) based on their supply tie-ups, while medium-term and short-term transmission access is acquired within the available margins.

Based on the LTA application, incremental transmission capacity is added. Several sector developments, such as the increasing focus on renewable energy, and the development of the market mechanism, necessitated a review of the existing transmission planning framework based on LTA.

The rules underpin a system of transmission access termed a ‘General Network Access’ (GNA) in the inter-state transmission system. This system provides flexibility to the States and the generating stations to acquire, hold and transfer transmission capacity as per their requirements.

“The Central Government has notified these rules with a view to streamline the process of planning, development and recovery of investment in the transmission system. The rules are aimed at encouraging investments in the generation and transmission sectors,” it added.

Power plants will not have to specify their target beneficiaries in a significant change from the present system of taking transmission access. The rules will also empower state power distribution and transmission companies to determine their transmission requirements and build them.

Also, states will purchase electricity from short term and medium-term contracts and optimise their power purchase costs.

The rules also outline the recovery of GNA charges from the transmission network users and assign the responsibility of billing, collection and disbursement of interstate transmission charges to the Central Transmission Utility.

For the first time, the rules have enabled the transmission capacity to be sold, shared or purchased by the States and generators.