Private Power Policy Essay

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India’s private power policy was announced in October, 1991 in the wake of several policy initiatives and changes that took place in the field of business, trade and industry. The private power policy was an outcome of the anxiety due to huge shortage was estimated to be of the order of about 10% and peaking shortage of the order of about 18%. Since the recourses from the government as also from the existing organization would not have been adequate to make up these gaps, the Government of India formulated the policy to attract private sector investments in power generation projects. This was done by making amendment to the Indian Electricity (Supply) Act 1948.

B. POLICY NOTIFICATIONS AND CLARIFICATIONS

Following the amendment to the Act, the Government notified a comprehensive guideline on setting up private power projects, covering issues like norms for tariff, power purchase agreement, etc. these guidelines were further flowed by a number of other policy papers viz. a) provision of counter guarantees for eight fast track power projects, b) MOU route replaced by international Competitive Bidding (ICB),c) Exemption from ICB for expansion project ,d) captive power project policy, e) Liquid fuel policy, f) Barge mounted power project policy, g) Policy for participation in Renovation and Modernization of old power plants, h) policy on co-generation plant, i) Model power purchase Agreement .
These policy papers were aimed at encouraging developers, streamlining the procedure and expenditing the process including financial closure and commencement and completion of project construction activities.

C. OUTCOME

The response to and outcome of all these policy initiatives in the last eight years have, however, been somewhat cautiou...

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...) Coal based plant up to 500 MW using fluidized bed technology subject to sensitive areas restrictions, c) power stations up to 250 MW capacity on conventional technology , and d ) Gas/ naphtha based power plant up to 500 MW capacity

J. CRISIS RESOLUTION GROUP

The Government of India has set up a crisis Resolution group (CRS) under the chairmanship of the Union Minister of power with members from the Ministry of power, Finance, Coal , Environment ,Railway Board, CEA at the level of secretary to the Government. Of India and also from Indian Financial Institutions. The objective of this group is to take care of the “last mile” problems of those projects which are very near finical closure but are stuck of in view of a few difficulties. This group had its first meeting in January, 1999 and identified 18 such projects to provide necessary coordination and assistance .

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