Quick Notes Choice in electricity retail: Will consumers choose green power? Background If consumers can choose their retail electricity supplier in India, will they choose and pay for electricity derived from renewable energy (RE) supplied by a private distribution licensee (DL) or distribution franchisee (DF)? Currently, there are provisions for consumers to opt for RE electricity through monopoly distribution companies (discoms) or DFs. The results so far are not encouraging, as the uptake of RE power and the number of consumers signing up for RE power are small . However, if distribution is delicensed, there is potential for dedicated suppliers of green electricity to emerge, offering RE energy products and services that are tailored to meet consumer preferences. DFs and DLs dedicated to providing RE power can use the green tariff route to offer clean power to commercial and industrial consumers (C&I) who must purchase RE power, and also to domestic consumers who want to contribute towards decarbonising the electricity sector. The green tariff option carries lower transaction costs compared to purchasing RE power through green power exchange or opting for procuring RE power directly from RE generators using the open access (OA) provision or setting up captive rooftop solar generators. Framework Green premium tariff is not new, as states like Andra Pradesh introduced it almost 15 years ago. Karnataka, Maharashtra, Gujarat and Uttar Pradesh also offer green tariff, but the offtake of RE power facilitated by green tariff remains less than 0.5 percent. In all states that have green tariffs, the tariff is higher than the average retail tariff of electricity which is probably among the key reasons for limited interest in RE power offtake.
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