Overcoming power shortages:

NEP aims at meeting both energy and peak demand fully through 2012 along within creating 5 percent spinning reserves at national level. The policy emphasizes full development of the feasible hydro-potential that is a clean and renewable source of energy. Harnessing the hydro- potential will also facilitate economic development of our hilly and North- eastern states that have a huge hydro-power resource base. NEP emphasizes the requirement of debt financing of longer tenor for hydro projects to make these projects more viable economically.

The National Electricity Policy realizes in which our country will have to depend on thermal generation to a large extent for meeting future electricity demand even after developing the feasible hydro potential. Although the choice of fuel would be based on the economics of generation and supply of electricity, coal would essentially continue to keep the primary fuel in view of the energy security needs. Natural gas could also be promoted as fuel for power generation, depending upon their availability at reasonable prices.

NEP emphasizes the requirement for harnessing the surplus capacity available from captive generation plants by the grid for overcoming power shortages. This aim is to be achieved by appropriate commercial arrangements among distribution licensees and the captive generators. You have learnt previously that substantial captive generation capacity has been established over the years and there is reasonable surplus available from this source that requires to be tapped.