New rules to empower states to buy power on short term contract

BHUBANESWAR: The Ministry of Power has promulgated the Electricity (Transmission System Planning, Development, and Recovery of Inter-State Transmission Charges) Rules-2021 to pave way for power sector utilities to easily access the electricity transmission network across the country.

In a major deviation from the present system of taking transmission access, the power plants will no longer have to specify their target beneficiaries.

The rules will also empower State power distribution and transmission companies to determine their transmission requirements and build them accordingly.

The states will be able to purchase electricity on short-term and medium-term contracts and optimise their power purchase costs.  

The rules underpin a system of transmission access which is termed as General Network Access in the inter-State transmission system. This provides flexibility to states as well as generating stations to acquire, hold and transfer transmission capacity as per their requirements. 

While part of a series of the Ministry’s reforms are meant to usher in transparency in power transmission, the rules are also aimed at bringing in rationality, responsibility and fairness in the process of transmission planning as well as its costs.  

At present, 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 LTA application, incremental transmission capacity is added. 

“There is always a need for building transmission networks well ahead of putting up power generating plants. Increasing focus on renewable energy and development of market mechanism necessitated a review of the existing transmission planning framework based on LTA,” said a senior officer of Odisha Power Transmission Corporation Limited (OPTCL). 

The rules, for the first time, enable sale, sharing and purchase of transmission capacity by states and generators. This has been done with a view to streamline the process of planning, development and recovery of investment in the transmission system.