The
comprehensivel revisions to the Electricity Act 2003 and the Govt's
published vision statement "Power for All by 2012" recognise the
need for substantial private investment in power generation as a key input
in realising the larger aims of the revised act and of the Vision Statement.- The Electricity Act 2003 is a progressive and liberal legislation that creates a market oriented and transparent framework for the development of the Power Sector.
- The Govt of India plans to add some 78500 MW of additional generation capacity during 2007 -12. This capacity is proposed to be created by Central, State and Private power generation utilities. Entry barriers have been removed across all sectors of the industry to facilitate competition and to ensure efficiency for customers.
- Any thermal generation company, public or private, may establish operate and own a generating station without having to obtain a licence under the Act.
- Open access to the state owned transmission lines is mandated under the Act for all private producers of power.
- Group Captive generation, whereby a developer such as OPG and a group of industrial consumers band together to establish a generation facility to cater to the power needs of the group, is now provided for in the Act. Group Captive Power Plants are exempt from the need for regulatory approval as to tariffs under the Act and can independently set prices mutually agreed between the generator and the users.
- However, such producers enjoy recourse to the Regulator in all matters connected with open access, wheeling and related aspects of transmission.
The present shortfall in power generation compared with demand is about 9 % of the normal load and 15 % of the peak demand, (which is expected to rise to 18-20%) as estimated by the Ministry of Power. Also, demand for power is expected to grow at a compound annual rate of 8 % over the next ten years (Central Electricity Authority estimates).
All this adds up to a compelling case for private investment in power to realize power self sufficiency within a robust, stable and higly rewarding investment environment.
