Coming a long way from its earlier policy of 2003 and realising the fact that there is an urgent need to augment the power generation capacity in the state through private participation, the Uttar Pradesh government has come out with a new energy policy that is ?conducive to investment by private power developers? in the state.
According to the policy, which was released late on Tuesday night, the state government has given its go ahead to private investors to increase the capacity of the powerhouses from the sanctioned one. The companies can then sell as much as 80% power generated through these additional units in the open market, while 20% would be sold to the state power utility at the rate quoted in the financial bidding for the original units. In the case of existing powerhouses, if the developer wants to increase its capacity, the ratio of power sold to the state utility would be 30% and that to be sold in the open market 70%.
The government also plans to help the developer get land for the additional units and provide it with water linkages, while the arrangement for sourcing of fuel for the project will have to be done by the developer himself.
According to informed sources in the energy department, the policy framework has been done keeping in mind the 660×3 mw Bara and 660×2 Karchchana projects in Allahabad. Since investors were quoting high rates for the power that would be generated in these powerhouses, the government was forced to review the energy policy and make investment in the power sector in the state look an attractive prospect. In this way, the government hopes to attract lower bids from the developers by providing them legitimate ways of making profit.
It may be mentioned that there have been two unsuccessful bids for the two mega projects already and the government has annulled the entire process and called for fresh bids. ?We realised that in order to attract reduced bids, we have to provide some sweeteners to the developers who can then make good their losses,? said the official, adding that a similar policy is already in practice in many states. In fact, the state government has already submitted the revised request for qualification (RFQ) to the Uttar Pradesh Electricity Regulatory Commission.