In a move likely to
benefit the stressed hydropower projects in india, the
newly-elected government at the centre would have the opportunity to
provide them relief if it clears the proposal to extend the existing
tariff regime for such projects till 2022.
Official sources told hat the Power Ministry has already finalized the cabinet note on extending the tariff policy (which is
applicable till 2015) till 2022, and as a new government is expected to
assume power at the center within the next 10 days, they expressed hope
that it would be only too happy to clear the proposal.Once
extended, the cost-plus option available in the tariff policy would
allow hydro projects to avail the benefit of selling 40 per cent of
electricity generated by them at merchant rates till 2022. Also with
merchant power prices being normally higher than those offered to
customers with which companies have long-term contracts, the move will
benefit private sector developers.
In lay man's terminology, instead of selling electricity generated
through hydro projects to customers through long-term contracts, the
companies have the freedom to sell it as a commodity at market rates or
merchant rates.Sources
pointed out that as the Cabinet Note seeking the tariff policy's
extension has already been circulated, fresh approval would be required
from the new Cabinet which would be formed once a new dispensation comes
at the Centre.
While seeking extension of the cost-plus tariff policy, the Note
circulated by the Power Ministry also aims at increasing participation
of private sector in transmission of electricity.The
note also carried another option which would ensure that variation in
fuel and power purchase cost is recovered by the power generating firms.Sources
privy to the development said that as of now State-owned power grid has
the monopoly in terms of handling transmission of electricity in the
country. Now the Government is trying to bring in greater participation
of private sector players in this field by facilitating their entry
through bidding. This would ensure multiplicity of agencies in
transmission of power, they added.
Also the Cabinet Note seeks to strengthen the renewable purchase
obligations (RPOs) of discoms, wherein distribution companies would have
to purchase an increased share of electricity which is generated
through renewable energy.With
Government having realised the significance of renewable energy as an
essential requirement in the power sector in the near future, it wants
discoms to increase the share of electricity (which they purchase from
power companies) produced through such sources.
The stakeholders which had submitted their feedback on the Cabinet Note
included Central Electricity Authority (CEA), Central Electricity
Regulatory Commission (CERC), Principal Secretaries of all the state
governments and chairpersons of power generation, transmission and
distribution utilities.
Source The Poineer
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