Competition and Non-conventional energy:
The tariff policy bolsters competition through making it mandatory for a distribution licensee to procure power by competitive bidding through promoting captive power, open access and encouraging multiple players. The policy stipulates in which the Return on Investment should be at par along with other sectors and in which tariffs should be based on norms and achievements. Incentives should be given to motivate investors to be competent.
The policy promotes non-conventional energy and co-generation sources of energy through specifying a minimum percentage of off take of such energy. The developers of the project are to be provided adequate incentive to avail of the advantages of the Clean Development Mechanism (CDM). The cost of the project will also permit reasonable cost of setting up coal washeries, coal beneficiation system and ash handling and disposal systems.