The Prime Minister of India, Dr. Manmohan Singh, has stressed the need for a wide range of power sector reforms including open access to the transmission system and a competitive energy market.
Speaking at a conference of chief ministers on the power sector, Dr. Singh emphasised the role of the states and the central sector in the reform process, suggesting that inter-state transmission needs to be opened up to competition and a separate and independent government entity be set up to control the National Load Despatch Centre. In addition, he underscored the importance of reducing transmission and distribution losses, launching a crash programme for capacity addition aimed at eliminating shortages latest by 2012, electrifying all villages by 2009, and taking steps to attract private investment.
The conference noted “with concern” that the country is presently facing serious peaking and energy shortages, and resolved that the States and the central government would vigorously pursue capacity addition programmes with orders in place by December 2007. The central government also plans to set up a National Power Project Management Board for monitoring the timely commissioning of new capacity and associated transmission projects.
The ministers also recognised that an estimated 20,000 MW of captive capacity is being sub-optimally utilised and resolved to do away with barriers to its use.
The conference also agreed to respond to transmission and distribution losses, currently running at about Rs. 47,000 crores ($11.5 billion) per annum, committing states to reduce losses to a level of 15% through the next five years.
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