New Delhi, Oct 1 (Inditop.com) The cabinet Thursday approved amendments in the mega power policy to encourage setting up of new power plants.
According to the new norms, the states that control the power distribution network can also buy electricity from mega power plants. Earlier, the mega power policy required states to privatise their distribution system for purchasing power from mega plants.
“The existing condition of privatisation of distribution by power purchasing states would be replaced by the condition that power purchasing states shall undertake to carry out distribution reforms as laid down by the ministry of power,” a government statement said.
The ministry guidelines mandate privatisation of distribution networks in the future.
The conditions requiring inter-state sale of power for getting mega power status has been removed from the amended power policy, the government said.
The mega power projects would be required to tie up with distribution companies and utilities and can sell power in accordance with the National Electricity Policy 2005 and Tariff Policy 2006, it added.
The existing 15 percent price preference for the domestic bidders would continue.
Also, it would not be mandatory for the developers to undertake international competitive bidding for procurement of equipment for mega power projects.
A basic custom duty of 2.5 percent would be applicable on brownfield expansion of existing mega projects.
All other benefits under mega power policy available to greenfield projects would also be available to expansion units (brownfield projects), the statement added.
