Open Access is the setting up of large scale solar plants by private entities at an open area and selling the power to consumers at an agreed cost. The two types of Open Access are Inter-State Open Access and Intra-State Open Access and each of them have their own regulatory guidelines that need to be followed. Open Access is mainly for heavy users with load requirements exceeding 1 MW. These users are for large scale industries and companies who can choose from a number of power companies instead of being forced to purchase from a singular monopolized power grid. This market ensures competitive rates and enhances the power market business. This will also help your company meet its Renewable Purchase Obligations (RPO).
Open Access is beneficial for industrial consumers who pay extremely high electric tariffs for an erratic power supply from the grid. This also reduces the power shortage faced in many areas. The Electricity Act (2003) allows a buyer with a load of more than 1 MW to purchase power directly from the market through the grid. For using this grid, the power producer bears the charges for transmission and distribution losses incurred, as well as, wheeling and banking charges.
The producer and consumer of electricity can opt for collective or bilateral transactions. The preferred one is bilateral transaction is where a Power Purchase Agreement is signed between the producer and consumer for a mutually agreed tariff for a predetermined number of years.