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Economic Survey Favours 49 pc FDI in N-Power Plants

Economic-Survey-Favours-49-pc-FDI-in-N-Power-PlantsThe Indian Finance Ministry’s Economic Survey (2008-09) has proposed the private sector’s entry into nuclear power generation with a foreign direct investment (FDI) component of 49 percent to widen the energy portfolio of the country. It has further proposed that the inefficient monopoly of state electricity boards be broken by creating a competitive electricity market through quicker operationalisation of open access.

The survey prescriptions are key policy indicators of the government and impacts the budget-making exercise.Regarding nuclear power, the survey proposed that private sector should be allowed entry, subject to regulations framed by the Atomic Energy Commission. The country’s installed nuclear power capacity is 4,120 MW, with entire programme being run by government-owned NPCIL. Private entry would not only help bring new technology in the sector but also provide fuel support as country’s domestic uranium production is just enough to fuel 10,000 MW.

The survey has suggested that each state regulatory commission should facilitate this by providing a rational and reasonable cross subsidy regime, without going into the controversy that few states blocking open access to power companies. While the number of open access transactions in inter state transmission have risen to 9,347 in 2008-09 (up to December 2008), the survey pointed out that only 1,394.3 MW of capacity has been made for this up to March 31, 2009.