Ministry of Power Issues Revised Proposal for Amendments to the Electricity Act

The Ministry of Power has issued a revised proposal for amendments to the Electricity Act 2003. The revised proposal is open for comments up to October 22, 2018. In the revised proposal, the Ministry of Power has included ample provisions for renewable energy generation and distribution.

The act will be called the Electricity (Amendment) Act 2018. It will apply to the entire country except Jammu and Kashmir.

In the proposal, it has been mentioned that “Decentralized distributed generation means electricity generation from wind, small hydro, solar, biomass, biogas, bio fuel, any kind of waste including municipal and solid waste, geothermal, hybrid power system or such other sources for end use at or near the place of generation.”

Per the proposal, renewable energy sources include hydro, wind, solar, bio-mass, bio-fuel, bio-gas, waste including municipal and solid waste, geothermal, tidal, forms of oceanic energy and co-generation.

The proposal also mentions Renewable Energy Service Company (RESCO), renewable generation obligation (RGO) and renewable purchase obligation (RPO). These weren’t mentioned in the original Electricity Act of 2003. According to the proposal, RESCO means an energy service company which provides renewable energy to the consumers in the form of electricity. RPO implies the minimum percentage of the purchase of electricity from renewable energy sources to be procured by every obligated entity.

The proposal describes, RGO as the renewable energy generation capacity required to be established or its equivalent capacity required to be procured from renewable energy sources and the sale of such energy along with the electricity generated from the coal or thermal generating stations, by a generating company that is involved in developing thermal power projects. This is a novel concept.

The proposal also has provisions for smart grid. Per the proposal, “Smart Grid” means an electricity network that uses information and communication technology to gather information and act intelligently in an automated manner to improve the efficiency, reliability, economics, and sustainability of generation, transmission and distribution of electricity.

In the proposal it is also mentioned that the central government will, after consultation with the state governments, prepare and notify a national policy for harnessing solar power and other forms of renewable energy to ensure electricity to un-electrified rural households and permitting standalone systems.