Untitled - Ministry of Power

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Private Participation in Power Sector
The first major step towards encouraging private
investment in the Power sector was taken in
1991 by providing a legal frame work through an
amendment of the then existing Electricity
(Supply) Act, 1948. Subsequently, a definite tariff
framework was also put in place through
notification issued by the Government of India.
Further, to bring about rationalization and
transparency in tariff setting process, the
institution of Independent Regulatory Commission
was created through an enactment in 1998.
Under the Electricity Act, 2003, tariff for supply
of power by a generating company to a
distribution licensee through long term Power
Purchase Agreement (PPA), is to be determined
by the Regulatory Commission. Tariff for supply
involving a short term PPA (one year or less)
would not, however, be regulated. Where open
access has been allowed to a consumer, he
can reach an agreement with his supplier for
purchase of electricity and the tariff for such
transaction would not be regulated. Tariff
determined through competitive bidding is also
not to be regulated.
Chapter - 11
Torangallu TPP (130x2 MW) Karnataka (Bellary District)
RESPONSE FROM THE PRIVATE SECTOR
Private power projects being monitored by
Central Government:
The response to GOI’s energy policy has been
encouraging. Since 1991, a total capacity of
around 7400 MW from 37 private power plants
has so far been commissioned. Another capacity
of around 4500 MW from 12 projects is reported
to be under construction.
MAJOR POLICY INITIATIVES TAKEN TO
STREAMLINE THE PROCESS OF PROJECT
DEVELOPMENT
Captive Power Plants
Captive Generation is now free from controls.
Unlike in the Electricity (Supply) Act, 1948, the
Electricity Act, 2003 does away with the
requirement of approval / clearance of any
authority (SEB/CEA) for setting up of captive
generating plant. The new law also ensures
non-discriminatory open access for conveyance
of electricity generated from a captive generating
plant to the destination of its own use, subject
to availability of transmission capacity. For such