‘Trading volume growing at 36% annually’

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Noor Mohammad: Jan 16 2012, 01:27 IST

two factors will enhance power consumption, which will encourage merchant power producers to commission their projects early to benefit from the demand. But the cost of power tariff will go up because of a rise in the cost of fuel, especially coal. However, the cost of coal is likely to stabilise when production starts from the captive mines of companies like NTPC and Reliance Power.

Further, the Appellate Tribunal for Electricity gave a landmark judgment on November 11, 2011 directing the State Electricity Regulatory Commissions to initiate suo moto proceedings to determine the tariff if the licensees delayed the filing of the annual revenue requirement (ARR) and to ensure that the tariff for the financial year is decided before April 1 of the tariff year and to make the tariff applicable only till the end of the financial year so that the licensees remain vigilant to follow the time schedule for filing tariff petition. This will improve the financial health of discoms, thereby stimulating the power market’s growth.

What are the bottlenecks holding back the power market’s growth?

First, reforms in the distribution sector are required to be undertaken as per the Electricity Act 2003. Second, enough transmission networks are required to be brought into operation to ensure free power flow across the country without congestion. For this to happen, improvement in the financial health of discoms and implementation of technology in the distribution sector are needed. All state load despatch centres (SLDCs) should be equipped similar to regional load despatch

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