Opportunities and Risks in Indian Electricity Open Access Market

Indian parliament has tabled Electricity Amendment Bill 2014 to simplify the implementation of Open Access in India Power Industry. In an attempt towards optimizing electricity supply chain, Open Access provision allows customers with demand of 1 MW or more to access T&D lines with associated fee paid. And customer is not obligated to buy from the owner of those distribution lines as the function of distribution and supply will be separated. The question from the point of view of an Energy Purchase Manager in India is whether this move is good for his/her company. To determine this, we have to look at two basic parameters namely Cost and Supply Assurance and how they are affected. In case of electricity, more often than not, Supply Assurance takes an upper edge over Cost. However we can assume that both are of equal importance for customer.