2. GENERAL ENERGY POLICY
Political system and energy sector governance
India is a federal parliamentary republic consisting of 28 states and 9 union territories, which results in a complex political decision-making environment with multi-level governance. Many economic policy objectives are linked to the year 2022, the year when the country will celebrate the 75th anniversary of its independence in 1947. The parliament (Sansad) has two houses: the Council of States (Rajya Sabha) and the House of the People (Lok Sabha). India held general elections for the House during April and May 2019.
The prime minister is elected by Lok Sabha members of the majority party, following legislative elections. The president is indirectly elected for a five-year term by an electoral college consisting of elected members of both houses of parliament. The head of state is President Ram Nath Kovind, in office since July 2017.
Prime Minister Modi presides over the large energy portfolio, which is spread across central (federal) and state governments, with the states having some autonomy over energy policy. At federal level, India does not have one single ministry in charge of energy policy. The Government of India (GoI) has at least five ministries with responsibilities for energy: the Ministry of Power (MoP), the Ministry of Petroleum and Natural Gas (MoPNG), the Ministry of New and Renewable Energy (MNRE), the Ministry of Coal (MoC) and the Department of Atomic Energy (DAE) (Figure 2.11).
Electricity sector
The MoP governs the electricity sector in India and also hosts the Bureau of Energy Efficiency (BEE). The Central Electricity Authority (CEA) is the main advisor to the MoP and is responsible for the technical co-ordination and supervision of programmes and data collection and dissemination, notably through the five-year National Electricity Plan. Under the Electricity Act 2003 the Central Energy Regulatory Commission (CERC) is responsible for: fixing tariffs (regulated tariff and the tariff discovered through competitive bidding); licensing of transmission and trading; market development (facilitating open access, licensed traders, power exchanges); grid security (grid code, deviation settlement mechanism, ancillary services); regulating the interstate transmission system; adjudication of disputes; promotion of renewable energy sources; consumer protection; among other matters. The State Electricity Regulatory Commissions (SERCs) collaborate through the Forum of Regulators (FoR).
Public-sector undertakings (PSUs) under the MoP include the Power Finance Corporation (PFC) and Rural Electrification Corporation, which function as non-banking financial institutions and provide loans for power sector development. National Thermal Power Corporation (NTPC) is India’s largest integrated thermal power company and the National Hydroelectric Power Corporation (NHPC) the largest hydropower producer. In addition, the MoP oversees the functioning of the North Eastern Electric Power Corporation (NEEPCO), the system operator Power System Operation Corporation (POSOCO) and the central transmission utility Power Grid Corporation of India Limited (Powergrid).
India has several electricity transmission operators in the country. Powergrid owns and operates the majority of the interstate transmission lines, while intrastate lines are
26
IEA. All rights reserved.
2. GENERAL ENERGY POLICY
owned by the state transmission utilities. As recent reforms opened the sector to private or merchant investment, private-sector entities also build, own and operate interstate transmission lines.
Some energy-related departments are run directly under the Prime Minister’s Office. These include the DAE, which works on the development of nuclear power technology and the application of other radiation technologies, and NITI Aayog, which is an official think tank and policy advisory body of the GoI, co-ordinating activities that are inter-ministerial in nature, such as India's electric vehicle (EV) programme and reform of energy data. The DAE has a mission to enhance the share of nuclear power in the power sector by deployment of indigenous and other proven technologies, as well as thorium-based reactors with associated fuel cycle facilities. A central-government-owned corporation administered by the DAE, the Nuclear Power Corporation of India Limited (NPCIL) is responsible for the generation of nuclear power, operating India’s 21 nuclear reactors.
The MNRE is in charge of the development of solar, wind and other renewables in India. Under the MNRE are the National Institute of Solar Energy, the National Institute of Wind Energy and the Indian Renewable Energy Development Agency (IREDA), which functions as a non-banking financial institution providing loans for renewable energy and energy efficiency projects. Solar Energy Corporation of India (SECI) is responsible for the implementation of various MNRE subsidy schemes, such as the solar park scheme and the grid-connected solar rooftop scheme. Biofuels are managed by the MoPNG.
Figure 2.11 Main institutions involved in energy policy making in India
IEA 2019.All rights reserved.
Coal sector
The MoC has oversight of exploration, exploitation and the development of coal and lignite resources in India. Under the ministry, the Coal Controller Organisation is responsible for the sampling of coal, inspection of collieries, issuing guidelines for the maintenance of grades of coal, granting permission for the opening and closure of mines, and collecting
27
ENERGY INSIGHTS
IEA. All rights reserved.