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POWER
The UPA Government completes one year on May 21, 2005. During this period, the Government has taken several important initiatives. Some of these are being brought out in the series ‘Major Decisions and Initiatives’.
Rural Electrification Programme
The "Rajiv Gandhi Grameen Vidyutikaran Yojana”, a scheme of rural electricity infrastructure and household electrification has been approved for the attainment of the National Common Minimum Programme (NCMP) goal of providing access to electricity to all households in five years. The scheme would be implemented through the Rural Electrification Corporation (REC). Ninety per cent capital subsidy would be provided for overall cost of the projects under the scheme.
The present approval is for implementation of Phase I of the scheme for capital subsidy of Rs.5,000 crore during X Plan period.
National Electricity Policy
Under section 3 of the Electricity Act, 2003, the Government is required, from time to time, to prepare and publish the National Electricity Policy and tariff policy for development of the power system. As per requirements of the Act, the policy was evolved after consultations with the State Governments, Central Electricity Authority and other stakeholders and also after considering the advice of the Central Electricity Regulatory Commission and has been notified on February 12, 2005.
As per the Act, the Regulatory Commissions will be guided by these policies in the discharge of their functions. The Act also requires the CEA to prepare the National Electricity Plan in accordance with the National Electricity Policy.
The National Electricity Policy aims at accelerated development of the power sector, providing supply of electricity to all areas and protecting interests of consumers and other stakeholders. The objectives of the Policy are access to electricity for all households in next five years; the demand for power to be fully met by 2012; supply of reliable and quality power of specified standards; per capita availability of electricity to be increased to over 1000 units by 2012; minimum lifeline consumption of one unit per household per day by year 2012; financial turnaround and commercial viability of electricity sector and protection of consumers’ interests.
The promised review of the Electricity Act, 2003 is being carried out and the concern of the stakeholders pertaining to affordability and availability of power for the rural poor are being addressed through the Electricity policy and the Tariff policy.
Competitive Bidding for Procurement of Power
The Electricity Act, 2003 provides that the Regulatory Commissions shall adopt the tariff if it is determined through transparent process of bidding in accordance with the guidelines issued by the Central Government. This aims at moving away from cost plus approach for tariff determination and is expected to further encourage private sector investment. The Central Government has issued the guidelines for competitive bidding for determination of tariff for procurement of power by distribution licensees on January 19, 2005 after consulting the Central Regulatory Commission and other eminent persons.
Power Generation Growth
During the year 2004-05, the total generation of power in the country was 587.365 BU as against 558.336 BU during 2003-04, registering a growth of 5.2 per cent.
During the year 2004-05, the all India Plant Load Factor (PLF) was 74.8 per cent as against PLF of 72.7 per cent during 2003-04, improvement by 2.1 per cent.
Hydroelectric Initiative
50,000 MW Hydro-electric Initiative was launched during the year 2003-04 under which preparation of PFRs of 162 schemes spread over 16 states was taken up by CEA as nodal agency with seven Central/State agencies as consultants. Preparation of PFRs of 162 schemes with aggregate installed capacity of 47,930 MW has been completed by CEA in August 2004.
As a follow up of preparation of PFRs, 78 schemes having aggregate installed capacity of 34,020 MW, whose first year indicative tariff worked out below Rs. 2.50 / Kwh, were selected for preparation of Detailed Project Reports (DPRs). 57 schemes aggregating to an installed capacity of 27,816 MW have already been allotted to CPSUs / State Power Utilities for preparation of DPRs and the consent of the concerned State Governments has also been obtained. Seven schemes aggregating to an installed capacity of 1,415 MW have been allotted to Independent Power Producers (IPPs) by the concerned State Governments for preparation of DPRs and implementation.
Financial Closure of Projects
The Ministry is taking proactive steps in facilitating financial closure of projects of Independent Power Producers (IPPs) and resolving other difficulties being faced by them through high level facilitation meetings with financial institutions through an Inter Institutional Group (IIG) comprising senior representatives of banks and Ministry of Power. The IIG has been an effective platform for project developers and Financial Institutions to resolve outstanding issues. Financial closure of 11 IPPs with a total installed capacity of about 4,000 MW entailing an investment of about Rs.15,000 crore has already been facilitated since January, 2004. Further, 11 IPPs with a total capacity of 11,632 MW are being monitored by the IIG for early financial closure.
Investment Sanctions for Seven New Projects
Investment approval for Vindhyachal Transmission System was accorded on July 23, 2004 at an estimated cost of Rs. 596.47 crore with a completion schedule of 36 months from the date of investment approval. The transmission project would facilitate evacuation and dispersal of power to Western Region beneficiaries.
Investment approval for Sipat STPS Transmission System was accorded on August 23, 2004 at an estimated cost of Rs. 601.90 crore. The transmission project would facilitate evacuation of power from Sipat STPS Stage-II and dispersal of power of the project to Western Region beneficiaries.
Investment approval for transmission system associated with Sipat STPS Stage-II Project was accorded on October 12, 2004 at an estimated cost of Rs. 1771.93 crore. The transmission project would facilitate evacuation of power from Kahalgaon Stage-II power project and dispersal of power of the project to Eastern, Western and Northern Region beneficiaries.
Investment approval for System Strengthening–III of Southern Region Grid was accorded on October 26, 2004 at an estimated cost of Rs. 284.78 crore. The transmission project would strengthen the existing transmission networks and would facilitate formation of National Grid in the Region.
Investment approval for Transmission system associated with Kahalgaon stage-II phase-II was accorded on January 24, 2005 at an estimated cost of Rs. 464.02 crore. The transmission project would facilitate evacuation of power from Kahalgaon Stage-II phase-II power project and its further dispersal to various beneficiaries.
Investment approval for Transmission system associated with Neyveli Lignite Corporation-II (NLC II) expansion project was accorded on January 11, 2005 at an estimated cost of Rs. 691.83 crore. The transmission project would facilitate evacuation of power from NLC-II Expansion project and its further dispersal to various beneficiaries of Southern Region.
Investment approval for Transmission system associated with Kaiga-3&4 project was accorded on March 29, 2005 at an estimated cost of Rs. 588.25 crore. The transmission project would facilitate evacuation of power from Kaiga Atomic power project and its further dispersal to various beneficiaries of Southern Region.
The Government has constituted an Expert Committee on Energy Policy and is actively pursuing the Accelerated Power Development and Reforms Programme aimed at bringing about techno-commercial revival of the distribution system.
A comprehensive awareness creation programme on energy conservation was launched in December 2004.
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RK:LV
PIB SF-32 (15.5.2005)
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