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THE Council of Common Interests has approved the energy policy 2021

That will focus on long-term reforms in the power sector for providing reliable, secure, environment-friendly and affordable electricity to consumers. The energy minister told a presser the other day that people would see the impact of the new policy (on the economy) in the next five to 10 years. Generally speaking, the formulation of a broad national electricity policy targeting development of indigenous fuels for generation is welcome and will save the nation a lot of hard-earned dollars, make electricity affordable to all types of domestic consumers and help to end the price volatility associated with fluctuation in the global energy markets.

Further, the initiative will support the effort to move towards a competitive power market in the country and introduce transparency in the sector. Although the policy does state the intent of the authorities, it does not carry specific targets. For example, it is silent on privatization of inefficient, loss-making distribution companies.

Likewise, it does not clearly mention what local fuels will be preferred and how it
plans to bring in modern technologies. Perhaps the national action plan that would be ‘chalked out under the initiative’ will clearly define the targets for renewable energy, long-term hydel schemes, development of local fuels, improvement in power distribution, etc that the government aims to achieve over the next 10 years. However, the biggest challenge for the government will be the implementation of the policy and alignment of its intent with the targets of the other entities such as NTDC, as well as the availability of finances to execute reforms in the power market.
Most importantly, the new document promises to focus on increasing transmission capacity as the system currently can transport 24,000 MW against a generation capacity of 35,000 MW. This is the area where the government needs to drastically boost investment since the dearth of it is one of the major reasons that surplus power remains unutilized in spite of growing demand.

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