The Electricity Act 2003 was an important step towards rejuvenating the ailing power sector in India.
It deregulates the power sector and clearly defines power generation, transmission and distribution.
Key features of the Act include:
- De-licensing of power generation (excluding nuclear and large hydro power projects).
- Open access to the power transmission system.
- Independent power providers no longer obliged to sell power to state electricity boards. They may opt to sell to third parties, such as commercial consumers.
- Liberal provision for captive power generation.
- Electricity Regulatory Commissions given the authority to fix levels of renewable energy procurement by every open access consumer.
- Direct and transparent payment of subsidies.