Proposed Modification to the Mega Power Policy

Following are the modifications proposed to the Mega Power policy :

1.     There shall be no mandatory requirement of privatization of distribution in the power purchasing states.

2.     There shall be no mandatory requirement of inter-State sale of power.

3.     The present dispensation of price preference available to the domestic bidders in case of PSU projects will continue for a period of five years or till competitive bidding for all new generation projects is introduced for public sector projects under the Tariff Policy, 2006 as amended from time to time, whichever is earlier. However, the price preference will not apply to tariff based competitively bid projects of PSUs.

4.     The benefits of Mega Power Policy will also be extended to supercritical projects to be awarded through ICB with the mandatory condition of setting up indigenous manufacturing facility provided they meet all other eligibility criteria of Mega Power Policy.

5.     There shall be no further requirement of ICB for procurement of equipment for these projects if the requisite quantum of power has been tied up or the project has been awarded through tariff based competitive bidding as the requirements of ICB for the purpose of availing deemed export benefits under chapter 8 of the Foreign Trade Policy would be presumed to have been satisfied. In all other cases, ICB for equipments shall be mandatory.

6.     The mega power benefits would also be extended to such expansion unit(s), even if the total capacity of expansion unit(s) is less; than the threshold qualifying capacity, provided the size of the unit(s) is not less than that provided in the earlier phase of the project granted mega power project certificate. All other conditions stipulated while issuing the mega power status certificate to the earlier project will continue to be applicable.

7.     Before, the power starts flowing into the grid, the mega power projects would be required to tie up power supply to the distribution companies / utilities through long term PPA(s). They may sell power outside long term PPA(s) in accordance with the National Electricity Policy (NEP), 2005 and Tariff Policy (TP), 2006, as amended from time to time. Where the developer has achieved financial closure (investment decision by the Board in case of Public Sector Company / Corporation /Authority) but has not tied up requisite long term PPA, developer could apply for mega power status by furnishing a legally enforceable undertaking / bond to the MoP.

8.     MoP would issue guidelines for monitoring the above mentioned conditions of the Mega Power Policy through a monitoring Committee headed by Joint Secretary.