Govt amends Mega Power Policy to encourage projects

The government today amended the Mega Power Policy, as per which states controlling the power distribution system would be allowed to purchase power from mega power units in a bid to encourage such projects.     

Now such states have to give an undertaking to carry out distribution reforms as laid down by the Ministry of Power, which mandates privatisation of distribution in the future, according to changes in the Mega Power Policy approved by the Cabinet.     

"The existing condition of privatisation of distribution by power purchasing states would be replaced by the condition that power purchasing states shall undertake to carry out distribution reforms as laid down by the Ministry of Power," a statement on the Cabinet decision said.     

 

Earlier, this condition of not allowing states that have not privatised distribution of electricity to purchase power from mega power plants was frustrating for these power producing firms because of limited market as a large number of states have not reformed electricity distribution.     

Mega power plants are those which have the capacity of generating electricity at least 1,000 Mw.

Some states like Delhi have privatised power distribution. A few cities like Mumbai, Ahmedabad, Surat, Noida, Kolkata have also done so, which in the rest of the country the power distribution system is controlled by the government.