The Uttar Pradesh government is working on framing a new energy policy that would clearly lay down the incentives which would be given to investors in the power sector.
The new policy would replace the vaguely-worded and outdated energy policy of 2003-04. The Energy Task Force (ETF), headed by chief secretary Atul Kumar Gupta, met to discuss the issue here on Thursday, but the meeting remained inconclusive and the matter is slated to be taken up again soon.
Speaking to FE, a senior official of the energy department revealed that the issue of framing a new energy policy came up when the ETF started discussing the incentives that should be given to the developer of the 660×3 1980 mw Bara and 660×2 1320 mw Karchana mega power projects in Allahabad. It may be mentioned that the projects have been hanging fire for some time now, with the government preparing to invite fresh bids for the projects for the third time. This is being done so as to get reduced bids for the two projects.
However, the government soon realised that in order to attract reduced bids, it has to be ready to dole out sops to the developers, who can then make good their losses. ?While discussing sops that we must provide to the investors to make the prospect of investing attractive, we realised that instead of structuring policies for individual projects, we should take a holistic approach on the issue and frame a policy of incentives that can be used in all forthcoming projects. These legitimate built-in incentives will help a long way in attracting developers from the private sector, who then need not look for illegitimate ways to meet their costs? said the official.
Though the ETF is studying the energy policies of other states such as Maharashtra, Madhya Pradesh, Chattisgarh and Haryana, no consensus has yet emerged from the deliberations. ?We are trying to explore many possibilities and the range of sweeteners that we can provide. There are so many issues that we are grappling with: Weather it would be adequate to let investors have one extra plant or two and whether they should sell 20% or 30% of the power generated from the increased capacity to the state in order to bring down the rate of power. In fact, we are also mulling over whether to put building of the transmission infrastructure under the PPP module.
Traditionally, transmission infrastructure is built by public sector only. If we decide to finally put the transmission infrastructure under the public private partnership mode, UP will be the first state in the country to experiment with the idea. There are no set guidelines that we can follow if we do decide to go for it and hence all the more difficult,? said the official, adding, ?we are also undecided on whether to include building the transmission infrastructure within the original bid of the building a powerhouse or invite separate bids for generation and transmission.?