Norms Set For Utilising Power From Captive Plants

In a major policy initiative to bring around 10,000 mw unutilised power from the captive plants to the grids, the Central government has formulated new guidelines for liberalising production and purchase of electricity from these plants.

According to power ministry sources, the guidelines expected to be announced next week, envisages State Electricity Boards (SEBs) paying the average variable cost of power produced in the state from other sources like hydro and thermal to the captive plants.

They added that at present 50 per cent of the total 20,000 mw of captive power remained unutilised. "The captive plant owners are not supplying it to the grid system as the states are offering them substantially lower tariff," said an official.

 

He added that the normal offer from the states to the captive plants was 10 per cent below what they paid for the electricity generated from other sources, which was very unattractive.

Further, the states want captive plants to supply power to the grid system only during the peak period.

Sources said that if the states agree to pay the "average variable cost" as suggested by the guidelines, they will have to pay between Rs 2 to Rs 2.50 per unit to the captive players.

The guidelines also stress on a liberal scrutiny of the captive power plants by those states with substantial shortage of power.

Clearance for setting up captive plants above 25 mw has to be made as liberal as possible by the states, according to the guidelines. Sources said that up to 25 mw, there is no need for a Central Electricity Authority clearance at present.

The Centre has also suggested encouragement to third party sale from captive plants. The new captive power policy guidelines will set the roadmap for a liberalised regime as outlined in the draft Electricty Bill prepared by the power ministry, said sources.

Keeping in mind the possibilities of adding 2,000 mw every year, the draft bill has made setting up of captive generation plants completely free, they added. The Electricity Bill is likely to be introduced in Parliament in the monsoon session of Parliament.

It allows construction, maintenance and running of a captive plant and dedicated transmission lines.

The supply of electricity from the captive plants through the grid will be regulated by the concerned regulatory authority.