India’s new power tariff policy: Will it boost investment into the renewable sector?

  The Centre has unveiled a new power tariff policy which allows 100 per cent expansion by existing power plants, passing on levies to consumers and purchase of 100 per cent electricity produced from waste.
A holistic view of the power sector has been taken and comprehensive amendments have been made in the Tariff policy 2006. Aim is to achieve the objectives of Ujwal Discom Assurance Yojana (UDAY) with the focus on 4 Es that is Electricity for all, Efficiency to ensure affordable tariffs, Environment for a sustainable future, Ease of doing business to attract investments and ensure financial viability.
Under the first E (Electricity for all), the policy is aiming at 24/7 supply to all consumers and state governments and regulators will devise a power supply trajectory to achieve this. Under the second E (efficiency), 100 per cent expansion of existing plants will be allowed because it is always easy to go for brown field expansion as these already have clearance like environment and forest approvals. Under third E (Environment), the tariff policy provides that under the renewable Power Obligation (RPO) 8 per cent of electricity consumption excluding hydro power, shall be from solar energy by March 2022. Under the RPO, the discoms are required to either buy certain proportion of their purchases from renewable source or buy RPO certificates.

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