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OEM Update

Power plants may sell unallocated output

January 12, 2010 5:20 am

The Union Cabinet will shortly take up a proposal for allowing existing power projects to sell a part of their unallocated generation capacity in the open market at market-determined prices. The Planning Commission is giving a final shape to a note prepared by the petroleum ministry on the issue which will be put up before the Cabinet for its approval. 
A government official pointed out that the proposal for allowing open access in the power sector mooted by the Planning Commission earlier this year was put in limbo for some months as the power ministry went slow in preparing the note. It has, however, now completed the note and passed it on to the Planning Commission for its inputs.
The open access system puts in place a transparent power market enabling consumers to source their electricity requirements from any source and from any part of the country without any geographical or regulatory restrictions on such sale. Though it is permitted in the country under the Electricity Act 2003, lack of clarity on pricing and other regulatory impediments has failed expand the new system beyond captive power (CPPs) units.

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