National Tariff Policy: overhaul long overdue

Updated: February 3, 2016 12:02:48 AM

The efficacy of the new power tariff regime will depend on how the changes are implemented.

Policy Change: Power plants operating on regulated tariff can double capacity on same land
Impact: Will promote optimal utilisation of land & other resources and cut down time required for forest and environment clearance

Policy Change: Power plants with tied but unsold capacity can sell such power in the market
Impact: The profit to be shared between producer & procurer. This will improve PLF and lessen fixed cost for consumers

Policy Change: Discoms mandated to procure solar energy amounting to 8% of requirement by 2022
Impact: Will incentivise solar power generation as demand from discoms to rise to fulfill RPO by 2022

Policy Change: New coal/lignite-based plants mandated to establish renewable capacity
Impact: This will catalyse growth and investment into renewable energy sources

Policy Change: No inter-state transmission charges and losses to be levied for solar/wind energy
Impact: This is to make renewable more affordable and alluring as a destination for new investment

Policy Change: Regulators given flexibility to review cross subsidy surcharge formula
Impact: Inflexible formula a reason for poorly developed open access. Flexibility to boost competition & allow reasonable rate of power

Policy Change: Railways to be exempted from cross subsidy charge
Impact: Likely to bring down power procurement costs for the national transporter

Policy Change: Allows microgrids to feed in to central grids once they come into existence in remote areas
Impact:Incentivises & safeguards investment

Policy Change: Cost pass through for use of imported/e-auction coal and in cases of change in duties, levies, cess and taxes
Impact:To bring about clarity on pass through of charges. Likely to help avoid litigation

Policy Change: Hydro projects exempted from competitive bidding; long-term PPA tenure extended to 50 years from 35 years now
Impact:Govt. backtracks from introducing bidding in hydro projects; longer PPA to make hydro power cheaper

Policy Change: Tariff for a generating company selling at least 10% of capacity outside State to be determined by CERC
Impact: Provision clears ambiguity and brings clarity on adjudication of tariff-related issues for composite project

Policy Change: Inter-state Transmission to be developed through competitive bidding except for projects of strategic importance
Impact: Govt keeps option of awarding intra-state projects on nomination basis. This has been criticised by industry as it favours PSUs

Policy Change: Intra-State Transmission projects to be developed by State govt through competitive bidding
Impact:To increase competition in such transmission projects

Policy Change: Must for consumers to use smart meters; installation to be complete by 2019. Net meters for all roof top solar consumers
Impact:To reduce power losses & theft and allow improved energy accounting


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