Power is an essential requirement for all facets of life and has been recognized as a basic human need. It is a critical infrastructure on which the socio-economic development of a country depends. The availability of reliable and quality power at competitive rates is very crucial to sustain growth of all the sectors of the economy, that is, primary, secondary and tertiary. This helps to make domestic markets globally competitive and thus improve the quality of life of the people.

Under the Constitution of India, electricity is a concurrent subject at entry number 38 in the List III of the Seventh Schedule. India is the world's sixth largest energy consumer accounting for about 3.5% of the world's total annual energy consumption. The thermal, hydro and nuclear energy are the major sources of generation of electricity in India. The total installed power generation capacity has been 1,47,402.81 MW (as on December 31, 2008), consisting of 93,392.64 MW (thermal); 36,647.76 MW (hydro); 4,120 MW (nuclear); and 13,242.41 MW (renewable energy sources).

Regulatory Framework

In India, the Ministry of Power is the nodal authority for the overall development of electrical energy in the country. It is concerned with perspective planning; policy formulation; processing of projects for investment decision; monitoring of the implementation of power projects; training and manpower development; as well as the administration and enactment of legislation in regard to power generation, transmission and distribution. It is responsible for the administration of the Electricity Act, 2003, the Energy Conservation Act , 2001 and to undertake such amendments to these Acts, as may be necessary from time to time, in conformity with the Government's policy objectives. The Ministry also provides research, development and technical assistance relating to hydro-electric and thermal power transmission and distribution systems in the States/UTs as well as deals with all the matters concerning energy conservation.

The Ministry has several undertakings/ organisations operating under it. They may be classified as follows:-

• Statutory Bodies, which include:-
  
  
  • Central Electricity Authority (CEA) - is an attached office of the Ministry and assist it in all technical matters. CEA is responsible for overall planning and technical coordination as well as supervision of standard programmes of entire electricity sector of the country. It specifies the technical and safety requirements for construction, operation and maintenance of electrical standards and electrical lines. It is also involved in formulating the 'National Electricity Plan' in accordance with the 'National Electricity Policy', once in five years.
    
    
  • Central Electricity Regulatory Commission (CERC) - has been constituted in order to:- (i) regulate the tariff of generating companies owned or controlled by the Central Government; (ii) regulate the tariff of generating companies other than those owned or controlled by the Central Government, if such generating companies enter into or otherwise have a composite scheme for generation and sale of electricity in more than one State; (iii) regulate the inter-State transmission of energy including tariff of the transmission utilities; (iv) grant licences for inter-State transmission and trading; and (v) advise the Central Government in formulation of National electricity policy and tariff policy.
    
    
  • State Electricity Regulatory Commissions (SERCs) - have been constituted in order to:- (i) determine the tariff for generation, supply, transmission and wheeling of electricity, whole sale, bulk or retail sale within the State; (ii) issue licences for intra-State transmission, distribution and trading; and (iii) promote generation of electricity from renewal sources of energy etc.
    
    
  • Appellate Tribunal for Electricity (APTEL) - has been constituted for the purpose of hearing cases against the orders of the Regulatory Commissions and the Adjudicating officer.
    
    
  • Damodar Valley Corporation (DVC) - is the first multi-purpose river valley project of the Government, set up for the unified development of Damodar Valley region spread over the States of West Bengal and Jharkhand. Its objectives are:- (i) flood control and irrigation; (ii) water supply and drainage; (iii) generation, transmission and distribution of electrical energy; (iv) afforestation and control of soil erosion; and (v) promotion of industrial, economic and general well-being of the people.
    
    
  • Bhakra Beas Management Board (BBMB) - has been constituted for the administration, maintenance and operation of Bhakra Nangal Project. It manages the facilities created for harnessing the waters impounded at Bhakra and Pong in addition to those diverted at Pandoh through the BSL Water Conductor System. It has also been assigned the responsibility of delivering water and power to the beneficiary States in accordance with their due/ entitled shares.
    
    
• Public Sector Undertakings, which include:-
  
  
  • Power Grid Corporation of India Ltd. (POWERGRID) - is the Central transmission utility of India which possess one of the largest transmission network in the world. It has been set up with the mandate 'to establish and operate Regional and National Power Grids to facilitate transfer of power within and across the regions with reliability, security and economy on sound commercial principles'. It is responsible for all the existing and future transmission projects in the Central sector.
    
    
  • National Thermal Power Corporation (NTPC) - is the largest thermal power generating company of India and has been identified as one of the Navratnas. It has been set up with the objective of planning, promoting and organizing an integrated development of thermal power in the country.
    
    
  • National Hydro-electric Power Corporation (NHPC) - has been set up in order to harness the vast hydro, tidal and wind potential of the country to produce cheap/ pollution-free and inexhaustible power. It covers all aspects such as investigation, planning, designs, construction, operation and maintenance of hydroelectric, tidal and wind power projects.
    
    
  • North-Eastern Electric Power Corporation (NEEPCO) - has been set up with the objective of developing the large power potential of the North Eastern (NE) region of the country by installing hydro and thermal power plants so as to ensure optimum utilisation of commissioned generation projects. It aims to plan, design, operate and maintain power stations in the NE region.
    
    
  • Rural Electrification Corporation (REC) - has been set up with the objective of financing and promoting rural electrification projects all over the country. The projects cover electrification of villages, including tribal villages and Dalit Bastis, energisation of pump sets, provision of power for small, agro-based and rural industries, lighting of rural households and street lighting. REC provides financial assistance to State Electricity Boards, State Government Departments and Rural Electric Cooperatives.
    
    
  • Power Finance Corporation (PFC) - function as the prime development financial institution dedicated to the growth and overall development of the power sector. It provides financial assistance/ services for power projects in the form of project term loan, lease financing, direct discounting of bills, short term loan, consultancy services, etc.



• Autonomous Bodies, which include:-
  
  
  • Central Power Research Institute (CPRI) - serve as a National Laboratory for undertaking applied research in electric power engineering, besides functioning as an independent National Testing and Certification Authority for electrical equipment and components so as to ensure reliability and develop new products.
  
  
  
  • National Power Training Institute (NPTI) - functions as the National Apex body for the human resource development of the power sector personnel in India. Its headquarter is located in Faridabad (Haryana). It operates on all India basis through its five Regional Power Training Institutes located at Neyveli (Tamil Nadu), Durgapur (West Bengal), Badarpur (New Delhi), Nagpur (Maharashtra) and Guwahati (Assam). They are fully equipped with the latest state-of-the-art training infrastructure and having expert faculties with long years of professional and teaching background.
  
  
  
  • Bureau of Energy Efficiency (BEE) - has been set up to develop policies and strategies within the overall framework of Energy Conservation Act 2001. It aims to promote energy saving measures and in turn reduce energy intensity (i.e. energy consumed per unit product/services, practice and procedure) of Indian economy.



• Joint Venture Corporations, which include:-
  
  
  • Satluj Jal Vidyut Nigam Limited (SJVN) - is a joint venture of the Government of India and the Government of Himachal Pradesh, set up with the objective to plan, promote, organize and execute hydro-electric power projects in the Satluj river basin in the Himachal Pradesh.
  
  
  
  • Tehri Hydro Development Corporation (THDC) - is a joint venture of Government of India and Government of Uttar Pradesh, set up with the objective to plan, promote, organize, execute, operate and maintain hydro power projects in Bhagirathi- Bhilangna Valley in Uttar Pradesh.

Policy Initiatives and Opportunities

The power sector is among the first sectors to be opened up for private sector investment. Though the initial impetus was on investment in power generation projects, subsequently, it has also been allowed in distribution and transmission projects. The Ministry has initiated several reform measures to attract private investment in order to enhance power generation capacity and promote energy efficiency in the country. For instance, the 'Electricity Act 2003' has been enacted to provide an enabling framework for the overall development of the power sector. It is an Act for consolidating the laws relating to generation, transmission, distribution, trading and use of electricity; taking measures conducive for development of electricity industry; promoting competition therein; and supplying electricity to all areas. The electricity Act also aims to rationalise electricity tariffs, promote efficient and environmentally benign policies, constitute CEA and regulatory commissions, provide for stringent penalties in case of theft of electricity, etc.

Under the Electricity Act 2003, the Central Government has prepared the 'National Electricity Policy' in consultation with State Governments and CEA. The policy has been announced for laying down the guidelines for accelerated development of the power sector and supply of electricity to all areas, keeping in view the availability of energy resources, technology, economics of generation and energy security issues. It aims at achieving the following objectives:-

• Access to electricity, that is, make it available for all households in next five years;



• Demand to be fully met by 2012 and energy shortages to be overcome;



• Supply of reliable and quality power of specified standards in an efficient manner and at reasonable rates;



• Per capita availability of electricity to be increased to over 1000 units by 2012;



• Minimum lifeline consumption of 1 unit/household/day as a merit good by year 2012;



• Protection of consumers' interests, etc.

Moreover, the Electricity (Amendment) Act, 2007 has been announced to amend certain provisions of the Electricity Act, 2003, such as, the Central Government, jointly with State Governments, to provide access to electricity to all areas including villages and hamlets through rural electricity infrastructure and electrification of households.

The Ministry of Power has set an ambitious mission of 'power for all by 2012', which is a comprehensive blueprint for power sector development. The mission requires that installed generation capacity should be at least 2, 00,000 MW by 2012. It aims to provide reliable, sufficient and quality power supply to all areas at an optimum cost as well as enhance commercial viability of power industry. To be able to achieve such objectives, following strategies are being adopted like:-

• Power generation strategy with focus on low cost generation, optimisation of capacity utilization, controlling the input cost, optimisation of fuel mix, technology upgradation and utilization of non-conventional energy sources;



• Transmission strategy with focus on development of National Grid including InterState connections, technology upgradation and optimisation of transmission cost;



• Distribution strategy with focus on system upgradation, loss reduction, theft control, consumer service orientation, quality power supply commercialisation, decentralized distributed generation and supply for rural areas;



• Financing strategy to generate resources for required growth of the power sector; etc.

Besides, the Ministry envisages establishing an integrated 'National Power Grid' in the country in a phased manner by the year 2012 with an inter-regional power transfer capacity of about 37,700 MW. The first phase has been completed in 2002, wherein regional grids were mainly connected by HVDC back to back stations and inter regional power transfer capacity of 5050 MW has been established. The implementation of second phase has already commenced and with the commissioning of Talcher Kolar HVDC bipole, Raipur Rourkela 400 kV D/C transmission system along with series compensation and second back to back station at Gajuwaka, inter regional power transfer capacity has grown to 9450 MW. It has created a synchronous grid from Arunachal Pradesh to Goa spanning across a length of 2500 km, encompassing an area of 16 lakh sq km with an installed capacity of over 50,000 MW. With other links, under implementation/ planning, the cumulative inter regional power transfer capacity is expected to be enhanced to 37,150 MW by 2012.

Moreover, rural electrification is considered vital programme for the socio-economic development of rural areas. Its objectives are to trigger economic growth and generate employment by providing electricity as an input for productive uses in agriculture and rural industries as well as improve the quality of life of the rural people by supplying electricity for lighting of homes, shops, community centres and public places in all villages.

The Government of India, from time to time, has been launching several programmes for electrification of rural areas in the country. For instance, the 'Rural Electrification Supply Technology (REST) Mission' has been launched with a view to accelerate electrification of all villages and households progressively by year 2012 through local renewable energy sources, decentralized technologies and conventional grid connection. It aims to provide affordable and reliable power supply to rural areas and effect implementation through distributed generation schemes, wherever feasible.

Besides, a scheme called the 'Rajiv Gandhi Grameen Vidhyutikaran Yojana (RGGVY) for Rural Electricity Infrastructure and Household Electrification' has been introduced in April, 2005 for achieving the National Common Minimum Programme objectives of providing access to electricity to all rural households over a period of four years. The Rural Electrification Corporation (REC) is the nodal agency for implementation of the scheme. Under this scheme, 90% Capital Subsidy will be provided for rural electrification infrastructure projects through:-

• Creation of Rural Electricity Distribution Backbone (REDB) with one 33/11 kV (or 66/11 kV) substation in every block where it does not exist.



• Creation of Village Electricity Infrastructure (VEI) for electrification of all unelectrified villages/habitations and provision of distribution transformer(s) of appropriate capacity in every village/habitation.



• Decentralized Distributed Generation (DDG) and Supply System form conventional sources for villages/habitations, where grid supply is not cost effective and where Ministry of Non-Conventional Energy Sources would not be providing electricity through their programme(s).

This scheme inter alia provides for financial assistance for electrification of all unelectrified Below Poverty Line (BPL) households with 100% capital subsidy.

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