|
In the past decade, the rise of renewable energy (RE) has also helped its open access market grow significantly. From around 300MW in 2009, the size of the RE open access market grew to ~10GW as of FY2022. Efforts by C&I consumers to lower electricity costs and meet sustainability goals, such as net-zero, are driving their uptake of RE. This is why India's RE open access market has continued to grow despite all hurdles and a lull in development in 2019 and 2020.
Most of the total RE open access capacity (~10GW), approximately two-thirds, went online in the open access market in the last five fiscal years (FY2018–FY2022).
The Indian RE open access market witnessed robust annual capacity addition beginning as recently as FY2017. At 2,894MW, the installation in FY2018 is the highest annual capacity addition to date (see figure 1 below). In fact, the period between FY2016-17 to FY2017-18 was when the market truly flourished. The prime driver for the capacity boom was the highly favourable policy of Karnataka under which exemption for 10-year is given for all open access charges for projects commissioned until FY2018.
Figure 1: Annual RE open access Installation Trend (FY2018-FY2022)
Source: JMK Research
Note: The data in the chart includes operational capacities of solar, wind, and wind-solar hybrid open access projects.
The expiry of Karnataka's attractive incentive for open access solar installation severely dampened the growth of the entire RE open access market. In FY2019, RE open access installation in India fell by 75% year-on-year (YoY). Further, in 2019, some states, including Andhra Pradesh, Haryana, Maharashtra, Rajasthan and Uttar Pradesh, either withdrew their open access benefits or did not extend the effective implementation period. These actions, or inactions in terms of state policy and regulation, stagnated the growth of the RE open access market in FY2020. The lowest annual installation in the last six fiscal years was in FY2020.
Capacity addition in FY2021 was substantially higher as compared to the previous fiscal. And this happened despite the adverse effects of the COVID-19 pandemic. Tailwinds such as the growing need for reduction in operational expense (OPEX), renewable purchase obligation (RPO), and decarbonisation targets of C&I consumers enabled the RE open access segment to beat the slowdown in market activity.
In FY2022, the annual capacity addition of ~1.89GW was 1.5x more than the previous year. Considering the open access projects under construction, India may add a further ~3.6GW in FY2023, which could potentially be the record high annual installation.
Based on RE open access capacity installed during FY2018 - FY2022, the top five states are Karnataka, Tamil Nadu, Maharashtra, Gujarat and Andhra Pradesh. These five states contributed 83% of India's RE open access capacity addition during the same period.
Figure 2: Top Five States – RE open access Capacity (Operational)
Source: JMK Research
Note: The data in the chart includes operational capacities of solar, wind, and wind-solar hybrid open access projects.
Recently, on 6th June 2022, with the notification of Green Energy Open Access rules 2022, project developers realized a significant boost in their growth prospects. This was because the ambit of RE open access market has been extended greatly; as per these rules, RE open Access is permitted to any consumer with load limit of 100 kW (reduced from 1 MW) or above.
And in a more recent development, the Centre launched the portal for Green Energy Open Access on 11th November 2022, assuring any eligible consumer open access grant within 15 days. In addition to the lowering of load limit, the new rules specify provisions for month-long energy banking, uniform renewable purchase obligation (RPO), and also bring clarity to applicability of open access charges. All these factors combined indicate a robust long-term growth in the future of RE open access in the country.
For more insights on RE OA market in India, refer to our comprehensive report - India's Renewable Energy Open Access Market: Trends and Outlook
| 
