The Cabinet Committee on Economic Affairs is expected to take up tomorrow the Power Ministry’s proposal to amend the Mega Power Policy.

The policy was introduced in November 1995 to provide impetus to the setting up of large power projects and derive benefits from economies of scale.

“The proposal for making changes to the Mega Power Policy may be taken up at tomorrow’s (Cabinet) meeting,” said a source without providing further details.

Thermal power projects of 1,000 MW and hydel plants of 500 MW are eligible for benefits under the policy.

These guidelines were modified in 1998, 2002 and 2006 to encourage power development in Jammu & Kashmir and the North Eastern region.

The projects can tie up electricity sales with distribution utilities through long—term power purchase agreements. They can also sell power outside these agreements, in accordance with the National Electricity Policy 2005 and the Tariff Policy 2006, as amended from time to time.

The benefits of policy also apply to energy—efficient supercritical projects that are awarded through international competitive bidding with the mandatory condition of setting up indigenous manufacturing facilities.

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