The state electricity regulatory commissions (SERCs) are moving towards a multi-year tariff (MYT) regulation. However, this adoption is slow and tardy. MYT falls under what is known as incentive regulation and the current approach adopted is the Cost of Service (CoS) or the Rate of Return Regulation (RoR) regulation. Why is incentive regulation more preferable to the CoS regulation? (more…)
Elections have been announced and it is almost a ritual to take stock of the performance of the out going government. I also thought of performing this ritual through this blog site. I will not comment so much on the fiscal imprudence that has been exhibited by the government in the last one year even before it could hold out an alibi of the global financial crisis. Talking to some experts who may be a bit on the right side of economic ideology spectrum one is inclined to believe that the government was lucky when it came in and piggybacked on an average growth rate of 8 percent. However, it did not carry out substantial reforms to put India at a different level of growth. Till last year it was flush with funds and all the fiscal indicators looked good but not so now and many of the flagship schemes of the UPA like the NREGA and loan melas (oops! waivers) have squeezed the fiscal purse with not much deliverance though. This may spell big trouble in the years to come given that it will be some while before the crisis relents. Here I discuss the performance of the UPA in the area of bijli with sadak and communications to follow. (more…)
In the late 1990s when the eight states (like Orissa, Haryana, Andhra Pradesh, Karnataka, Uttar Pradesh, Rajasthan, Delhi and Madhya Pradesh) enacted their electricity reform laws, they borrowed heavily from the UK model, but excluded the elements of open access and competition that constituted the rationale for restructuring. (more…)
The development of Ultra Mega Power Projects (UMPPs) has been identified as a major thrust area to meet the capacity addition target in the Indian Power sector. The UMPPs are very large sized projects, approximately 4,000 MW each, involving an estimated investment of Rs 16,000 crore. Each of these projects would supply power to a number of power distribution entities located in different States and are being developed on a Build, Own, and Operate (BOO) basis. (more…)
An important offshoot of the power sector reform process has been the importance accorded to the renewable sources of electricity. The policy framework for investment in renewable energy sources for electricity generation has been supported with fiscal incentives, and preferential procurement and pricing. This has largely been a voluntary approach guided by guidelines of the Ministry of Non-conventional Energy Sources (MNES), now known as the Ministry of New and Renewable Energy (MNRE). (more…)