New power tariff policy for boosting investment, clean energy

In bold reforms, the government today allowed passing of taxes and levies affecting power generation cost to consumers and permitted producers to sell spare capacity via exchanges so as to improve avaiability.
The new Tariff Policy, approved by the Cabinet headed by Prime Minister Narendra Modi, also allowed 100 per cent expansion by existing power plants and mandating states to buy all power generated from waste.
Power Minister Piyush Goyal said the reform will help meet the objective of making electricity available to all, reduce litigation, revive investments and protect environment.
"A holistic view of the power sector has been taken and comprehensive amendments have been made in the Tariff policy 2006. Our aim is to achieve the objectives of Ujwal DISCOM Assurance Yojana (UDAY) with the focus on 4 Es: Electricity for all, Efficiency to ensure affordable tariffs, Environment for a sustainable future, Ease of doing business to attract investments and ensure financial viability," he said.

With loss-making state electricity distribution companies not buying all of the power, the generators are running plants below capacity.
Under the new plan, the profit made by power generators by selling spare electricity via exchanges will be split between them and the state discoms.

Also, discoms will have to raise share of renewable energy. They will have to buy all of the power produced from waste in their state, he said.
He said the policy is aiming at round the clock supply to all consumers, and state governments and regulators will devise a power supply trajectory to achieve this.
Under this, power to be provided to remote unconnected villages through micro grids with provision for purchase of power into the grid as and when the grid reaches there.

Goyal said: "Small plants will be set up in coal mining areas to provide power to people living near coal mines.