A Study On India's Independent Power-Producing Sector

India's power sector has undergone a notable transformation, marked by the increasing involvement of private, or independent, entrepreneurs since the economic liberalization of the 1990s. This includes decisive policy drivers and regulatory frameworks that shape a dynamic private sector, which has demonstrated amazing growth, surpassing related challenges.

- Colonel Engineer A R Mohammad Parvez Mazumder (Retd.)

1. Foreword:

Let us make an effort to investigate India's independent power-producing sector, focusing on the prevailing policy and regulatory framework, tariff trends, generation capacity, and the challenges encountered by independent power producers. Such a comprehensive study focusing solely on the private sector may be useful for Bangladesh stakeholders seeking to gain knowledge for investment purposes.

2. Policy and Regulatory Framework:

2.1 Key Legislation, Policy, and Role:

The basis of India's power sector regulation is the Electricity Act, 2003. It serves as the primary legislation governing the electricity generation, transmission, distribution, trading, and use. This act is a contributor to promoting competition and inspiring private sector participation, except for nuclear and large hydroelectric projects. Besides, the law creates a framework for open access to transmission and distribution systems, enabling any consumer with a substantial load to source power from any generator. The Act, 2003 also dictates the establishment of independent regulatory commissions at both the central (CERC: Central Energy Regulatory Commission) and state (SERC: State Energy Regulatory Commission) levels. These commissions commonly recommend regulating tariffs, ensuring compliance, and protecting consumer interests, creating a pathway for private entrepreneurs to invest and operate. Both CERC and SERCs arbitrate disputes between licensees and distribution companies at the national and state levels.