Union Cabinet approves amendments of Power Tariff Policy to promote clean energy

The Union Cabinet has approved the proposal of the Union Ministry of Power for amendments in the Power Tariff Policy 2006.
The comprehensive amendments bring required changes for holistic view of the power sector and also to achieve the objectives of Ujwal DISCOM Assurance Yojana (UDAY) with the focus on 4 Es.
These 4 Es are: Electricity for all, Environment for a sustainable future, Efficiency to ensure affordable tariffs, Ensure financial viability and Ease of doing business to attract investments.
Key Highlights

  • 24X7 power supply will be ensured to all consumers. In this case state governments and regulators will devise appropriate power supply trajectory to achieve this.
  • Micro Grids will provide power to remote unconnected villages. It will have provision for purchase of power into the grid.
  • People near coal mines will be provided with affordable power through procurement of power from coal washery reject based plants.


  • Reduce power cost to consumers through expansion of existing power plants.
  • For reduction in overall power cost, benefit from sale of un-requisitioned power to be shared.
  • Through competitive bidding process, transmission projects will be developed in order to ensure faster completion at lower cost.
  • To enable Time of Day metering installations of smart meters will be fasten. It will help to reduce theft and allow net-metering.
  • Creating transmission capacity for accessing power from across India for lower power cost.


  • Renewable Power Obligation (RPO): By March 2022, 8% of electricity consumption shall be from solar energy in order to promote renewable energy and energy security.
  • Renewable Generation Obligation (RGO): New thermal plants based coal/ligniteto establish/purchase/ procure renewable capacity.
  • Transmission charges and losses will be not levied for solar and wind power between inter-State power transmission.
  • 100% power procurement produced from Waste-to-Energy plants in order to give big boost to Swachh Bharat Mission.

Ease of Doing Business

  • Investments will be encouraged in coal rich states like West Bengal, Odisha, Jharkhand and Chhattisgarh to generate employment.



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