National Electricity Policy

By:
Rakesh Kumar 10th Batch


In compliance with section 3 of the Electricity Act 2003 the
Central Government has notified the National Electricity Policy
on12February2005.
TheNationalElectricityPolicyaimsat
laying guidelines for accelerated development of the power
sector,
providingsupplyofelectricitytoallareas
and protecting interests of consumers and other stakeholders
keepinginviewavailabilityofenergyresources,
technologyavailabletoexploittheseresources,
economics of generation using different resources, and energy
securityissues.

The National Electricity Policy has been evolved in consultation

with:
StateGovernments,
CentralElectricityAuthority(CEA),
Central Electricity Regulatory Commission (CERC) and other
stakeholders.

Objectives
AccesstoElectricity-Availableforallhouseholdsinnextfiveyears
AvailabilityofPower-Demandtobefullymetby2012.Energyand

peaking shortages to be overcome and adequate spinning reserve

tobeavailable.
Supply of Reliable and Quality Power of specified standards in an
efficientmannerandatreasonablerates.
Percapitaavailabilityofelectricitytobeincreasedtoover1000units
by2012.
Minimum lifeline consumption of 1 unit/household/day as a merit
goodbyyear2012.
FinancialTurnaroundandCommercialViabilityofElectricitySector.
Protectionofconsumersinterests.

 CEAto notify first National Electricity Plan in six months with a

perspectiveupto12thPlanperiod.ThePlanpreparedbyCEAto
be used by prospective generating companies, transmission
utilities and transmission/distribution licensees. as a reference
document.
DevelopmentofruralelectrificationDistributionbackbone,village
electrification, household electrification to achieve the NCMP
targetofcompletinghouseholdelectrificationinnextfiveyears.
Financial support in termsof capital subsidy to States forrural
electrification.RECtobenodalagencyforruralelectrificationat
CentralGovt.level.

Creation of adequate generation capacity with a spinning

reserveofatleast5%by2012
Full development of hydro potential. Provision of long tenor
financefortheseprojects.
Choiceoffuelthermalgenerationtobebasedoneconomicsof
generationandsupplyofelectricity.
DevelopmentofNationalGrid.

Costofrecoveryofserviceformconsumersattariffreflecting

efficientcoststoensurefinancialviabilityofthesector.
Provisionofsupporttolifelineconsumers(householdsbelow
povertylinehavingconsumptionof30unitspermonth)interms
oftariffs.
Availabilitybasedtariff(ABT)tobeextendedtoStatelevelfor
bettergriddisciplinethrougheconomicsignaling
Specialemphasisontimeboundreductionoftransmissionand
distributionlosses.
Measurestopromotecompetitionaimedatconsumerbenefits.
ReliabilityandqualityofpowersupplytobemonitoredbyState
ElectricityRegulatoryCommissions.
Exploitationofnon-conventionalenergysourcessuchassmall
hydro,solar,biomassandwindforadditionalpowergeneration
capacity.

Thank You