Ministry Of Power Invites Suggestions To Frame National Electricity Policy 2021

low angle view of posts under blue calm sky
Representational image. Credit: Canva

The Ministry of Power(MOP) has invited suggestions from industry stakeholders for framing the National electricity Policy 2021. 


Aims of the policy are:


 1. Promote clean and sustainable electricity generation


2. Development of adequate and efficient transmission system

3. Revitalisation of Discoms

4. Supply of reliable and quality power of specified standards in an efficient manner

5. Moving towards light touch regulation

6. Promotion of manufacturing of goods and services in India in the generation, transmission and distribution segments of the power sector under the Make in India initiative and Atma Nirbhar Abhiyaan.

RE sources and cogeneration:

As per the draft, as of March 31, 2020, the total installed capacity through renewable energy sources was about 87 GW, whereas the government has set a target of 175 GW generation capacity from renewables by 2022. Hence, the draft NEP encourages electricity generation from renewable sources due to its environmental benefits that couple with energy security. The MoP encourages hybrid renewable energy like wind-solar, solar-biomass, solar mini-hydel, etc., with or without energy storage systems as well. Except for waste to energy generation, all future procurement of power from renewable sources must be through tariff-based competitive bidding.

Also, the tariff of the renewable energy generators must cover the risk of curtailment of power by DISCOMs for reasons other than grid security or transmission constraints.

The draft policy also recommends swift implementation of differential tariffs between peak and off-peak hours for consumers and generating stations, to appreciate the peaking power value.

Also Read  AMEA Power Secures $75 Million Funding Round Led by SoftBank Group

Renewable purchase obligations (RPOs) supported by renewable energy certificates (RECs) have not functioned satisfactorily, noted the draft policy. Therefore, it suggests market-based options while removing shortcomings of the existing RPO-REC-based system. It also talks about an intra-state level cost-sharing mechanism to address issues concerning the flow of power from states where intermittent renewable sources of energy are concentrated. Power from these states is transmitted to other states, and the former is left to bear the variability of generation.

The draft also encourages solar rooftop installations and states that one way to promote solar PV systems, particularly in household applications and small industries, is through net metering. 


The draft says microgrids currently being used should be strengthened to enhance reliability of supply and wherever feasible, these should be integrated with the main grid.

EV Charging Stations Infrastructure:

According to the draft, certain tariff-based measures are needed for electric vehicle (EV) public charging stations and a separate consumer category based on a specific charging load. ‘Time of the Day Tariff’ can be employed to avoid charging load during peak demand hours. It also suggests provisions for injecting power back into the grid whenever an EV is parked and connected to chargers. Aggregators may be allowed to aggregate the demand of multiple public charging stations to purchase renewable energy using open access.

Also Read  CERC Grants Transmission License to POWERGRID Subsidiary for Evacuation of 4.5 GW Renewable Energy in Gujarat

Smart Meters:

Automation and smart metering can play a pivotal role in bringing positive transformation in the distribution sector says the draft policy. The draft suggests that all new electricity connections come with smart prepaid meters or simple prepaid meters. It further says that existing meters should be replaced with smart meters in the next three years from the date of the issuance of the NEP 2021.

Regulatory Process

According to the draft, wherever power or transmission service is procured based on guidelines issued by the Central Government under section 63 of the Electricity Act, 2003, the role of the appropriate commission is primarily to ensure compliance with the process. Section 63 of the Electricity Act refers to regulations of adopting tariffs discovered in the competitive bidding process.

R&M in Generation:

 The draft suggests R&M of thermal power plants for better efficiency and environmental compliance and PAT scheme to incentivize efficiency improvements for TPPs. Repowering of wind turbines shall increase efficiency and CUF.

Power Markets:

According to the draft, a new entity called aggregators may be created to aggregate demand, renewable power generation, demand response, micro-storage, and others, to help small consumers, prosumers, and producers reach the market. This would help promote open access, which is presently allowed for consumers with loads of 1 MW and above. Also, share of spot markets will be increased to about 25% during the year 2023-24. It suggests introduction of longer duration forward contracts and derivatives on the power exchange.

Also Read  MERC Greenlights MSEDCL's 7000 MW Solar Power Bid for Agricultural Revolution Under MSKVY 2.0


The draft says that the solar PV plans must consider robotic dry cleaning instead of water cleaning, based on cost-benefit analysis. While manual cleaning is one of the options, several robotic technologies have entered the market, providing a cost-effective method to clean solar panels compared to manual cleaning. The Ministry of New and Renewable Energy (MNRE) also has recommended the efficient utilization of water for cleaning utility-scale solar projects. The ministry said that project developers should try and minimize wastage and instead use robotic cleaning technology.

Click the given link to read the policy in detail.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.