Union Cabinet is likely to approve next week a new power tariff policy to boost regulatory mechanism for discoms and focus on clean energy sources like solar and wind. Besides, the Union Cabinet may also discuss the proposal for policy on supply of coal to unregulated sectors like steel and cement.
"Union Cabinet is most likely to discuss and approve the electricity tariff policy by the Power Ministry in its meeting expected next week", said a source.
"The Cabinet may also approve the policy for providing coal linkages (fuel supply from Coal India) to unregulated sectors like cement and steel", he said.
Besides encouraging faster roll-out of investment, the new policy will reflect a concern for environment and encourage renewable energy. It will also look to strengthen regulatory mechanism so that discoms become more efficient and conscious towards their duties to consumers.
In 2006, the central government had approved the National Tariff Policy under the provisions of Electricity Act, 2003. The Power Ministry is now in the process of getting Cabinet's nod for a new electricity tariff policy.
The proposed policy will bring in several unique aspects which have not been touched in the past.
The government has given enough indications that the policy will give a big push to power generation from renewable energy sources and address concerns related to environment.
Earlier, Power Minister Piyush Goyal had said: "It (policy) will allow distribution companies to buy any amount of power produced from the waste. The power plants will have to use processed municipal waste water available in their vicinity (in 100 km radius)."
The proposed policy aims to provide incentives to renewable energy projects as well as push for efficient use of power generated from conventional sources of energy like coal and others.