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Energy policy and governance - principles, Rakesh Kacker, Director India Habitat Centre
- 1. Energy Policy and Governance - Principles Presentation for TERI UNIVERSITY 5th February 2016: 9:15 am 1
- 2. Approach Move away from getting into sectoral issues First Fix Inter Sectoral Issues and Principles Principles first, numbers later 2
- 3. 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 3
- 4. Principles Resource Assessment Role of Private Sector Single Regulator Pricing – supply side and demand side Taxation 4
- 5. 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 linkages5
- 6. 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 Revenue share vs cost recovery is another common issue 6
- 7. 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 another7
- 8. 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 8
- 9. 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 Efficient appliances like low energy DC devices should have zero taxation 9
- 10. 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 10
- 11. Recent Developments Fossil Fuel Price fall Solar Energy price fall Coal Import reduction Coal opened for merchant sale 11
- 12. Use of Principles Administrative measures Legal measures Demand Side Management – Consumer Education and Support 12