Power purchase options

Generation of Sustainable Power from wind and solar has been increasing steadily with our government developing new policies which supports promoting green energy along with other reasons including continuous development of technology thus increasing the share of green energy in the country.

Solar and Wind power are accessible through two modes to corporates and industries having high usage.

• Third party mode
• Group captive mode

Third Party Mode

A provision for sale and purchase of Third party power through open access was created in The Electricity Act, 2003.

The schedule of charges determined by the respective State/Central Electricity Regulatory Commissions for utilization of the electricity grid and services are to be paid to the corresponding agencies.

Group Captive Mode

This mechanism was created under the Electricity Act, 2003 wherein a group of consumers can come together to set up a power plant for captive consumption. The idea is to lower investment burden for a single consumer by facilitating group investment.

How it works:

Any individual company or an association of people / entities having at least 26 per cent shares in a power generating company and consuming more than 51 per cent of power generated can be treated as captive consumers.

Advantage:

This mechanism eliminates the cross subsidy surcharge, applicable for regular Third party sale of wind power, thus reducing the cost of power.

Advantages of open access power

• Economical than conventional power.
• Delivery using existing line.
• Cost remains the same through regular and peak hours.
• Minimum capital investment risk for Group Captive transactions.

Services offered:

Pre-Delivery stage

Assessment of viability of green power purchase through Group Captive or Third Party mode

• Applicable consumer tariff and cost estimation
• Savings calculations
• Customized advisory based on viability assessment.
• Appropriate structure formation considering:
• Electricity Act Compliance
• Financial, legal and tax implications
• Present company/group structure
• Contracting terms and practices
• Risk mitigation strategies

Presale Activities

• Identification of ideal power supplier based on the requirement of power purchaser.
• Detailed profitability review
• Facilitation

Transaction Advisory and Execution

• Power purchase, shareholder agreements; commercial terms structuring and negotiations
• Statutory documentation
• Execution

Post-Delivery stage

• Reconciliation with Electricity board
• Allocation and consumption report for compliance
• Invoice preparation and payment collection
• Report preparation for requisite audits
• Troubleshooting and risk management