Liquid Fuel Policy To Be Modified

Replying to questions on the availability of naphtha for the power stations being promoted by IPPs, Abraham said the government was seized of the difficulties being experienced by IPPs in getting their fuel linkages. It has been decided to modify the liquid fuel policy to remove all the hindrances, the secretary said.

The countrys requirements of energy resources in terms of size and investment are enormous, making it a vast market for electricity, Abraham said. The demand for electricity in India was estimated to be growing at an average rate of about nine per cent per annum.

According to ninth plan assessments, an incremental capacity of about 57,000 mw needs to be created to meet the demand for power in the country. The requirement during the 10th plan is expected to be about 65,000 mw.

 

This will require about Rs 500,000 crore for power generation alone. An equivalent amount will be required for the matching transmission, distribution and rural electrification activities.

Realising the crucial role expected to be played by foreign investors in the future growth of the sector, the private power policy of the government had been formulated to address the issues related to foreign private investment in the sector. The secretary said the policy permitting up to 16 per cent return on equity and an additional return at the rate of up to 0.7 per cent for every percentage point increase in the plant load factor beyond 68.5 per cent as an incentive for better plant performance to all the investors.