Quick definition: Banking in open access is a regulatory mechanism that allows power generators to store excess generated electricity with the grid for later use within a specified time period, typically subject to state-specific banking charges and seasonal restrictions.
Table of contents
- What is Banking in Open Access?
- How does Banking work in India?
- Key benefits for businesses
- Banking regulations in India
- How Neufin can help?
- Related terms
- FAQs
- Additional resources
What is Banking in Open Access?
Banking in open access is similar to a savings account, but for electricity. When businesses generate more power than they consume through renewable sources like solar or wind, they can “bank” this excess electricity with the grid. This banked power can be withdrawn later when generation is low or consumption is high, providing flexibility in power management.
How does Banking work in India?
In the Indian context, banking operates under specific state regulations:
- Time Limits: Most states allow banking periods ranging from one month to one year
- Banking Charges: States typically charge 2-10% of the banked energy as banking fees
- Seasonal Restrictions: Many states restrict banking during peak demand months
- Settlement Cycles: Banking settlements usually follow the financial year calendar
Key benefits for businesses
Banking in open access offers several advantages for Indian businesses:
- Optimized Power Usage: Match generation with consumption patterns
- Cost Savings: Reduce dependency on grid power during peak tariff hours
- Better ROI: Improve returns on renewable energy investments
- Energy Security: Ensure power availability during low generation periods
Banking regulations in India
Different states have varying regulations:
Maharashtra:
- Banking allowed monthly with 2% charges
- No banking during April-June
Karnataka:
- Quarterly banking permitted
- 5% banking charges applicable
- Restricted during February-June
Tamil Nadu:
- Annual banking facility
- 7% banking charges
- Peak season restrictions apply
How Neufin can help?
Neufin provides comprehensive open banking solutions that help businesses integrate financial services seamlessly. Our API platform offers secure access to banking data, payment initiation, and account information services, all while ensuring compliance with RBI guidelines and data protection regulations.
Related terms
- Open Access Charges
- Cross-subsidy Surcharge
- Power Purchase Agreement
- Net Metering
- Wheeling Charges
Frequently Asked Questions (FAQs)
Can banking be carried forward to the next financial year?
No, most states require settlement of banked energy within the same financial year.
What happens to unutilized banked energy?
Unutilized banked energy is typically purchased by DISCOMs at a predetermined rate, usually lower than the normal tariff.
Are banking charges uniform across India?
No, banking charges vary by state and are determined by respective state electricity regulatory commissions.
Additional resources
- Central Electricity Regulatory Commission (CERC) Guidelines
- State Electricity Regulatory Commission Websites
- Ministry of Power Regulations
Last updated: February 2024
Disclaimer: Banking regulations vary by state and are subject to change. Please consult your state electricity regulatory commission for the most current information.
