“Green Energy Rates: Pricing Challenges Ahead!” | (हरित बिजली दरें: मूल्य निर्धारण और अन्य चुनौतियाँ )

Main Points In Hindi (मुख्य बातें – हिंदी में)

यहाँ हरित बिजली टैरिफ, मूल्य निर्धारण और अन्य चुनौतियों पर आधारित मुख्य बिंदु प्रस्तुत किए गए हैं:

1. वित्तीय चुनौतियाँ: वितरण कंपनियों को वर्तमान टैरिफ मूल्यों की तुलना में घाटा हो रहा है, जिससे हरित टैरिफ को लागू करने में वित्तीय जोखिम बढ़ जाता है। प्रस्तावित हरित टैरिफ आमदनी की तुलना में 15% कम है, जिससे कंपनियों की आर्थिक स्थिति प्रभावित हो सकती है।

2. सप्लाई कैपेसिटी की कमी: वितरण कंपनियों की मौजूदा आपूर्ति क्षमता हरित ऊर्जा की बढ़ती मांग को पूरा करने में संतोषजनक नहीं है। इसके अलावा, डिमांड को पूरा करने में चुनौतियाँ हैं, जैसे दिन के समय में आवश्यक पाक्निकल सपोर्ट की कमी।

3. क्रॉस-सब्सिडी के मुद्दे: मौजूदा मूल्य निर्धारण में क्रॉस-सब्सिडी की समस्याएँ हैं, जहां वाणिज्यिक और औद्योगिक उपभोक्ता औसत लागत से अधिक भुगतान करते हैं। यह स्थिति अधिक समृद्ध उपभोक्ताओं के लिए लाभप्रद हो सकती है, जबकि गरीब उपभोक्ताओं को महंगी पारंपरिक ऊर्जा स्रोतों पर निर्भर होना पड़ सकता है।

4. उपभोक्ताओं का लाभ: हरित टैरिफ का लाभ सभी उपभोक्ताओं के लिए सुनिश्चित करना आवश्यक है। उपभोक्ताओं को सस्ती हरित ऊर्जा का उपयोग बढ़ाने के लिए प्रोत्साहित करना चाहिए, और वितरण कंपनियों को उनके संचालन की लागत के अनुसार सही टैरिफ निर्धारित करने की आवश्यकता है।

5. भविष्य की योजनाएँ: 2030 तक 500 गीगावॉट गैर-जीवाश्म क्षमता हासिल करने के लिए उत्पादित ऊर्जा में वृद्धि की आवश्यकता है। इसके लिए वितरण कंपनियों का वित्तीय स्वास्थ्य सुनिश्चित करना अत्यंत महत्वपूर्ण है, ताकि वे नवीकरणीय ऊर्जा की मांग को पूरा कर सकें।

Main Points In English(मुख्य बातें – अंग्रेज़ी में)

Here are the main points summarized from the article on green electricity tariffs:

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1. Promotion of Green Tariffs: The Ministry of Electricity has notified a formula to encourage large electricity consumers (over 100 kW) to opt for green electricity tariffs. However, this initiative faces significant challenges.

2. Financial Imbalances: There is a financial disparity where the current tariffs lead to losses for distribution companies compared to the proposed green tariffs, which are set 15% lower. This could result in a revenue loss for companies as consumers migrate to cheaper green options.

3. Operational Challenges: Distribution companies lack clarity on their capacity to supply the required incremental green energy, creating uncertainties in meeting daytime energy demands. Moreover, the proposed formula may not accurately reflect the true cost of supplying energy.

4. Cross-subsidy Issues: The pricing structure shows distortions due to cross-subsidization, where commercial and industrial consumers usually pay more than their average supply costs. This could lead to lower availability or higher costs for less affluent consumers.

5. Need for Consistent Framework: To ensure effective implementation of green tariffs, a consistent framework is needed, including accurate cost calculations, equitable access to renewable energy for all consumers, and potential incentives for increased usage during discounted periods. Addressing these issues is crucial for the financial health of distribution companies and the overall viability of renewable energy growth.

Complete News In Hindi(पूरी खबर – हिंदी में)

Complete News In English(पूरी खबर – अंग्रेज़ी में)

The Ministry of Power has announced a formula for green tariffs aimed at encouraging large electricity consumers (those using over 100 kilowatts) to purchase green energy. However, our analysis reveals several limitations in this effort to boost demand for renewable energy (RE). These challenges include:

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1. Financial Issues: Distribution companies are currently facing losses compared to today’s tariffs (i.e., regulated retail prices).
2. Operational Challenges: There is a lack of clarity regarding the capacity of distribution companies to supply the necessary amount of incremental green energy, making it challenging to meet daytime energy needs with RE. There is also a concern about reallocating already purchased RE.

To study green tariffs, we analyzed the current costs and retail pricing structures of 23 distribution companies across 11 states, covering about two-thirds of electricity sales in India. This included fixed and variable costs associated with electricity generation, transmission, and distribution. We identified pricing distortions, such as cross-subsidies, where commercial and industrial (C&I) consumers often pay more than the average supply cost.

The main difference between the current electricity retail pricing standards and the proposed green tariffs lies in their cost components. Current standards start with the average power purchase cost (APPC) and then add utility distribution costs and cross-subsidies. In contrast, the proposed green tariffs are based solely on renewable energy purchase costs, with fixed limits on distribution costs and cross-subsidies.

The calculated average supply cost for the 11 major states was ₹7.47 per kilowatt, but the green tariff is only ₹6.50, which is 15% lower, leading to potential losses.

If such green tariffs are approved by state electricity regulatory commissions, we may see a significant migration of high-paying utility consumers, resulting in less revenue recovery for distribution companies or higher prices for other consumers.

While the Ministry’s Green Open Access Order and the green tariff notification have good intentions, they overlook critical issues affecting distribution companies, which could distort the RE industry as well. These issues include:

1. The proposed formula does not reflect actual supply costs.
2. Offering 24/7 green energy, a requirement of the green order, can only be achieved by charging a premium.
3. C&I consumer load profiles vary widely, which may not align with RE generation profiles, making a uniform green tariff inefficient.
4. If the purchased renewable energy isn’t new or incremental, there could be a zero-sum game, creating inequalities in access to affordable renewable energy sources. This could result in wealthier C&I consumers having access to cheaper renewable options, leaving less affluent consumers reliant on more expensive traditional energy sources.

If the goal of green tariffs is to increase renewable energy purchases, they must be designed to benefit both distribution companies and consumers. Some recommendations include:

• Distribution companies should accurately calculate the true cost of supplying green electricity and set tariffs that allow them to recover costs.
• Green electricity should be available to all consumers, not just a specific group.
• Consistent criteria for defining green energy should be established.
• Consumers should be encouraged to use more renewable energy during cheaper supply periods (usually during the daytime with solar energy).
• To promote renewable energy beyond a certain limit, improvements in storage and system flexibility are needed, including acknowledging associated costs.

Achieving the ambitious target of 500 gigawatts of non-fossil fuel capacity by 2030 requires a significant annual increase of about 46 gigawatts in non-carbon dioxide emitting technologies, primarily from variable renewable energy sources. Although behind-the-meter renewable energy purchases, like rooftop solar, are on the rise, distribution companies will continue to be a major source of RE purchases. Ensuring the long-term viability of this effort hinges on the financial health of distribution companies.

You can access this paper here.

This paper was authored by Nikhil Tyagi, former research associate, Sharath Rao, fellow, and Rahul Tongia, senior fellow at CSEP, New Delhi.

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