Relevance: GS-3: Statutory, regulatory and various quasi-judicial bodies; Infrastructure: Energy.

Key Phrases : General Network Access, CERC, CEA, Power disbursal system, Inter-State transmission system, ‘one nation, one grid’, drawal requirements, National Grid, point-to-point access.

Why in New?

• In December, the Central Electricity Regulatory Commission came out with a draft proposal to facilitate regulatory framework for General Network Access (GNA) which, if implemented, would bring in a radical change to the country’s power disbursal system and create a level playing field.

Key Points:

• General Network Access means open access to the Inter-State transmission system.
• Technically speaking, GNA is a non-discriminatory access to the inter-state transmission system for an estimated maximum injection and for a consumer to draw for a specified period.
• This is in keeping with the concept of “One Nation, One Grid”.

Need:

• CERC in March 2010 and February 2011, granted approval for 11 High Capacity Transmission corridors costing around ₹50,000 crore for evacuation of power of generation projects of Independent Power Producers.
  • According to reports, the projects progressed slowly due to delay in land acquisition, statutory clearance and fuel tie-up.
  • Besides, due to certain technical issues in bidding process not many distribution companies had tied up their power requirement from these generating stations.
  • There was no liability for payment of transmission charges associated with connectivity.
• Some of the producers were seeking long-term agreements for a quantum much less than their connectivity while using the existing transmission network to avoid the liability of paying monthly transmission charges which would be payable under such agreement.
• And inter-State Transmission Charges for these stranded lines have been shared by end-users who have little say in such capacity building.
  • Besides, it is often found that the drawal requirement of many States is more than the allocated power.
  • Drawal means the electricity taken out from the intra state transmission system.
• The transmission system created to meet the drawal requirement of the States fulfils the needs of that particular State, however, the charges are shared by all the beneficiaries.
  • Further, availability of National Grid facilitates transfer of power from available cheaper sources.
• In the current scenario if short term/ medium/PX transactions are curtailed it results in significant bottling up of generation and distress to Discoms.
• Moreover, Power producers have been asking for it for last five years, at least.

Following these, the Central Electricity Authority initiated the idea of GNA for:

1. Proper planning of transmission system and
2. Assured recovery of transmission charges from the applicant.

Benefits:

• GNA works like the GST (Goods and Services Tax) regime, thus doing away with unnecessary contracts between power producers and the bulk consumers for delivery of power.
  • This is expected to benefit the power generator and consumer, who now are dealing with challenges of transmission too.
• Conceptually GNA does away with pre-determined specific point-to-point access and allows access or drawal on the entire belt way, thus providing generators and procurers the choice of injection and drawal.
• It will help in ‘One Nation One Grid’, by injecting power to reach anywhere without any hassle.
• If the concept becomes a reality, then it will untangle the current webs in the system and ensure that a generator focusses only on producing power and the consumer on buying it.
  • How it will be transmitted will no longer be a restriction or a challenge.
  • For instance, today a power generator has to also work out how the supply will be done due to the point-to-point access concept which, according to the producers, is restrictive.
  • GNA will allow them to supply from any point, as long as the quantum contracted for is met.
• GNA is not only beneficial to the generator, but it will also benefit bulk consumers as now they are not worried about where the supply will come from and what energy source it will come from.
  • The quantum contracted for will be transmitted to the consumer.

Issues:

• In the power sector, the States play an important role. Some States may not be willing to agree, since GNA will also result in tariff rationalisation to some extent and States which are making more money could see a drop in tariff rates.
• According to reports, States such as Punjab, Tamil Nadu, Haryana and Uttar Pradesh, who are availing themselves of far more import capacity through inter-State transmission than their long-term agreement capacity should proportionally share the point of connection charges at the point of drawal.

Conclusion:

• Clearly, GNA is a much awaited change and the power generators have been waiting for it. Though it is still at a draft proposal stage, it is a case of better late than never. While the generators wait for it, it remains to be seen how the bulk consumers, namely the States, will respond to it.

Source: The Hindu BL

Mains Question:

Q. The idea of ‘One nation, One Grid’ requires an open access to the Inter-State transmission system. Comment in light of recently released draft proposal to facilitate regulatory framework for General Network Access.