Move to speed up investments, regulate discoms better
Move to speed up investments, regulate discoms better
The Union Cabinet, at a meeting Wednesday chaired by Prime Minister Narendra Modi, approved a slew of amendments in the power tariff policy that will ensure continuous power supply to all, including remote villages through micro-grids, and for those living near coal mines.
These amendments will also ensure affordable tariffs, and were effected to facilitate the ease of doing business to attract fresh investments and ensure financial viability. The revised policy will enable improved regulation of the power distribution companies (discoms) and a faster rollout of investments.
“The Union Cabinet approved a new power tariff policy which will promote clean energy, support the Swachchh Bharat programme, better regulations for discoms and encourage faster rollout of investments in the sector,” minister of state for power Piyush Goyal told reporters after the Cabinet meeting.
Besides encouraging faster investments, the new policy will reflect a concern for the environment and encourage renewable energy. It will also strengthen the regulatory mechanism so that discoms become more efficient and conscious of their duty to consumers.
In 2006, the Centre had approved the National Tariff Policy under the provisions of the Electricity Act 2003.
Indicating that the policy will focus on clean energy, Mr Goyal had recently said: “Now that we have a challenge to add 1.75 lakh MW of renewable energy, we are also bringing in certain more elements in the tariff policy which will promote renewable energy.”
The minister had also said: “We are brining in elements which will promote the Swachchh Bharat Abhiyan and help waste-to-energy prosper in India.” Under the policy, power plants will have to use processed municipal waste water available in their vicinity (within a 100 km radius).
The proposed policy will bring in several unique aspects that have not been touched on in the past. It will allow distribution companies to buy any amount of power that is produced from the waste.
In another related decision, the Cabinet also approved a “viability gap funding” (VGF) of Rs 5,050 crores to set up over 5,000 MW of grid-linked solar power projects under the Jawaharlal Nehru National Solar Mission. “To push the solar energy programme, a scheme to provide Rs 5,050 crores VGF for setting up 5,000 MW capacity has been approved,” Mr Goyal said.
Elaborating further, the minister said: “The VGF will be provided through reverse bidding. Whosoever will quote the lowest VGF will win. One part of these funds will be for domestic modules. These companies will be given Rs 1.25 crore per MW and those coming via international competitive bidding will get Rs 1 crore per MW.” Mr Goyal expressed the hope that the VGF reverse bidding auction will help to reduce power tariffs in future.
