Industry requests appropriate regulatory framework for generation and transmission of electricity

Dr Pramod Deo, Chairman, Central Electricity Regulatory Commission met representatives of the power sector at an interactive Session on “Regulatory Initiatives for Promoting Private Investments in Generation & Transmission” organized by the Confederation of Indian Industry (CII) in Mumbai today. Delegates from the power sector discussed and raised concerns about generation, distribution and transmission of power and the role of private enterprises in augmenting power capacity in India.

While explaining the initiatives that the regulatory authority has taken since the past decade or so, Mr. Deo said that there was a paradigm shift in the year 2003, where the Electricity Act provided for delicensed generation of electricity. He pointed out that though as per National Power Tariff Policy there has to be competitive bidding, many states provide for 12%-13% free power for the state. This he stressed was not in sync with the National Tariff Power Policy and this anomaly needs to be sorted out soon. He also informed that the same had been pointed to the Ministry of Power and action on the same was expected. He further emphasized that in power distribution franchisee route was more acceptable as an alternative to complete privatization.

Mr. Alok Kumar, Secretary, Central Electricity Regulatory Commission made a presentation on regulatory initiatives for promoting private investment in generation and transmission of electricity. While giving an overview on the current state of generation of electricity, Mr Kumar stressed that though generation has been delicensed, access to transparent markets with reasonable transmission charges is called for. He pointed out that open access on transmission has been fully successful and non discriminatory. However the issue of interconnection with states is something that sill needs to be addressed. He also informed that recently CERC has notified regulations for connectivity, medium term open access and long term open access. He further highlighted that new regulations do not require developers to build dedicated transmission line for power plants of 500 MW thermal and 250 MW hydro, irrespective of ownership. Also with medium term open access and long term access, possibilities of structuring of power agreements would be possible. He also informed that CERC is now drafting regulations related to include various products of intra day and term ahead nature. This regulation will be in public domain in next two months for public comments.

CERC has also notified transmission license regulations two months ago to remove any anomalies through competitive bidding route. Addressing support to renewable energy, Mr. Kumar explained that CERC was in touch with the Ministry of New & Renewable Energy to finalize regulations and that they would be notified by the next month. 

During his welcome address, Mr. Rakesh Sarin, Managing Director, Wartsila India Ltd suggested that though during the last ten years CERC has been successful in making paradigm changes in the power sector, some gaps still existed. With direct linkage with the economic growth, serious concern must be given to an ideal mix of energy sources that the country should have. “Role of regulatory authority is paramount in meeting the energy requirements of our nation. Focus on requirements of the urban consumer in terms of viability, reliability and economic cost is needed”, said Mr. Sarin.

While Mr. R K Madan, CEO (Power), Adani Enterprises Ltd commended CERC in bringing crucial changes in the power sector and making it attractive for the private enterprises to enter the sector, he expressed that a lot needs to be done by the states regulators to bridge the gap of shortage of power.