Centre forms panel on power reforms

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  1. The Central government has formed a panel headed by Sanjiv Nandan Sahai,Special Power Secretary on power reforms.
  2. The panel will recommend measures required to be made in the Power Purchase Agreements(PPAs) and for increasing competitiveness in the power markets.
  3. PPA is a contract between the one who generates electricity and one which is looking to purchase it.
  4. PPA defines all of the commercial terms for the sale of electricity between the two parties such as (a)when the project will begin commercial operation (b)schedule for delivery of electricity (c)penalties for under delivery (d)payment terms and (e)termination.
  5. The Power Sector has witnessed a huge growth in terms of capacity addition during the last few years.But it is reeling under stress as the mismatch in demand and supply has led to stressed power assets or non-performing assets(NPAs).
  6. According to the 37th Standing Committee On Energy report,about 34 power plants in the country amount to about ₹1.40 lakh crore NPAs.
  7. The debt has increased due to several factors such as (a)capacity addition without tied-up PPAs with Distribution Companies (DISCOMs), (b)coal supply issues (c)inability of DISCOMs to pay to generators (d)regulatory issues among others.