Center finalizes draft electricity policy, seeks comments from states

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The union energy ministry finalized the draft National Electricity Policy and requested feedback from states and the Central Electricity Authority (CEA) by February 10, 2022.

In a letter to the states and the CEA, the ministry noted that the standing committee on energy had recommended a new electricity policy and a committee of experts under the chairmanship of Gireesh Pradhan, former chairman of CERC (Central Electricity Regulatory Commission) was set up to prepare and recommend the National Electricity Policy (NEP), 2021. The panel of experts presented the draft of the policy on October 4, 2021

“The draft of the NEP has been finalized to be circulated to seek opinions/comments from all interested parties, especially from the CEA and the states in accordance with the provision of the Law,” it said.

The new draft policy comes in the context of the government’s energy transition plans, in which the government plans to achieve 500 GW renewable energy installed capacity by 2030 and net zero carbon neutrality by 2070.

The vision of the new policy would be: “A financially viable and environmentally sustainable energy sector that fosters energy security and provides 24/7 reliable power at a reasonable price.”

The letter noted that the policy objectives identified by the expert committee are decarbonization and energy transition, resilient and flexible grid, financial viability of the electricity sector, and consumer-centric approach.

He said that the expert committee held detailed and extensive deliberations with various stakeholders, including the CPSU, financial institutions, industry associations, state governments, TERI, BEE, CEEW, among others.

The government has presented a large number of reform measures for the electricity sector in recent years. The energy ministry also introduced the Electricity (Amendment) Bill 2022 in parliament last August before sending it to the standing committee for review.

The ministry also implemented the revamped distribution sector scheme to improve the efficiency and financial viability of the power distribution sector and took strict measures to reduce fees for power generation companies and decompensation.

The objective of improving the financial viability of the electricity sector is along the same lines. The government aims to reduce aggregate technical and commercial (AT&C) losses from non-conformities to 12-15% by 2024-25 from 17% in FY22.

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