Electricity Distribution and Tariff Rates

2019 ias preliminary exam test series

Electricity generated by central sector generating stations is allocated to the beneficiary States and Union Territories in the electricity region by the Ministry of Power (MoP).

As per the extant guidelines of MoP, 50% of power is allocated to ‘Home’ State, 15% unallocated power kept at the disposal of Government of India and 35% is allocated to other constituents (except ‘Home’ State) of that region.

The present tariffs of nuclear power range from Rs 1.07 per unit in case of the oldest nuclear power station, Tarapur Atomic Power Station (TAPS) – 1&2 at Tarapur, Maharashtra to Rs 4.10 in case of the latest station, Kudankulam Nuclear Power Plant (KKNPP) -1&2 at Kudankulam, Tamil Nadu.

Nuclear power tariffs are comparable to those from contemporary units of other electricity generating technologies located in the area.

Reducing costs of nuclear power is an ongoing effort. In respect of indigenously designed Pressurised Heavy Water Reactors (PHWRs), efforts in this regard have included increasing unit size from 220 MW to 540 MW and further to 700 MW to gain from economies of scale, standardisation, improvement in design and efficiency and optimisation of gestation period.

In respect of projects to be set up with foreign cooperation, the measures include adopting appropriate business models to arrive at competitive unit cost.

As per the Foreign Direct Investment (FDI) Policy of the Government, FDI is not permitted in nuclear power sector. Thus, foreign companies cannot invest in nuclear power. Nuclear power projects to be set up with foreign technical cooperation are planned to be funded by a mix of equity and debt, with equity to be mobilised from internal resources of Nuclear Power Corporation of India Limited (NPCIL), Joint Venture companies between NPCIL and other Central Public Sector Undertakings and Government budgetary support. Foreign companies can however, invest in the supply chain for nuclear power projects.

Current Affairs for IAS Exam