New Delhi: Government has said that it has taken various policy and administrative steps, including de-licensing of thermal power generation, to encourage greater participation of private developers in the sector.

“A number of policy and administrative measures to enhance private participation in the power sector have been taken by the Government,” Minister of State for Power Jairam Ramesh said in a written reply to the Rajya Sabha.

The Government would enact new Electricity Act, 2003, de-license thermal power generation, form Central and State Regulatory Commissions, introduce mega power policy and Ultra Mega Power Projects (UMPP) initiatives among others.

Although, a policy on private sector participation was announced in 1991, the pace of private investment has been slow as most Independent Power Producers (IPPs) were unable to achieve closure for their projects, despite progressing well on the other clearances.

Delays in finalisation of Power Purchase Agreements (PPA) and high cost of electricity estimated for the projects were also some of the reasons.

Meanwhile, Government is reviewing a proposal to review the Mega Power Policy. “A proposal to review the Mega Power Policy, deleting the condition of privatisation of distribution in the cities is under consideration,” Power Minister Sushilkumar Shinde said in a written reply to the Rajya Sabha.

A condition of privatisation of distribution in cities, with a population of more than one million, for allocation of power from Mega Power Projects was stipulated to encourage investment in the sector by reducing the risk perception of the developers.

The Kerala Government has requested the Ministry of Power for amending the Mega Power Policy deleting the condition of privatisation of distribution in cities.