new integrated energy policy
Post on 02-Nov-2015
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New Integrated Energy Policy
Presentation for IEC : 2015 28th January 2015
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Why a new Policy?
Move away from getting into sectoral issues
First Fix Inter Sectoral Issues and Principles
Principles first, numbers later
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Objectives
Evolve Principles which will apply to all Energy Sectors
Deviations to be the exception; where unavoidable they will have to be specifically proposed, justified and approved
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Principles
Resource Assessment Role of Private Sector Single Regulator Pricing supply side and demand
side Taxation
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RESOURCE ASSESSMENT Recoverable Reserve estimation not available in
public domain Quantum of Recoverable Coal Reserves
doubtful Need periodic correction for economic and
environmental reasons Current reserve estimation not useful for
planning or deciding linkages
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ROLE OF PRIVATE SECTOR
The roles vary considerably across energy sectors
Mode of selection also varies ideally all sectors should use competitive bidding
Terms of operation should also be similar merchant sale is allowed in oil and gas sector but in coal it is restricted to captive use
Revenue share vs cost recovery is another common issue
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SINGLE REGULATOR Ideally there should be one regulator for all
energy sectors many countries use this model Till this happens the role of the regulator
should be uniform across sectors Power sector regulation is most advanced with
coal the most behind Not rational to trust regulator in one sector
but not in another
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PRICING SUPPLY SIDE AND DEMAND SIDE
Of all the issues this is the most difficult and also important. Pricing Policy has to take note of the fact that our import
dependence is rising and with it our exposure to external price developments
Supply side consumer price should be linked to import parity prices while production prices should be close to cost of production
Imperative that all suppliers of energy goods and services get fully compensated by prices/subsidies
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TAXATION Uniform treatment for all in Direct Taxation Accelerated Depreciation is not a good incentive
however if given in one area it should be given to all Indirect Taxation should be used to tax inefficient and
large vehicles/farm equipment Likewise Tax on efficient appliances should be minimised
if not made zero.
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SUBSIDIES Subsidies should be open and not hidden in terms of tax
concessions Subsidies should be linked to performance and not
capital investment On consumer side subsidies should be given as direct
cash transfer and not bundled with goods this never has the intended benefit
New Integrated Energy PolicyWhy a new Policy?ObjectivesPrinciplesRESOURCE ASSESSMENTROLE OF PRIVATE SECTORSINGLE REGULATORPRICING SUPPLY SIDE AND DEMAND SIDETAXATIONSUBSIDIES
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