Strengthening of Power Systems Including Power Sector Development Fund: Most Important Topic for 2021 RBI Assistant Exam

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  • The Government has approved the scheme for operationisation of Power System Development Fund (PSDF) in January, 2014. As on 31.12. 2013, about ₹ 6300 crore was available with this Fund.

The Criteria and Purpose for Which the PSDF Will be Utilized Are as Follows

  • Creating necessary transmission systems of strategic importance based on operational feedback by Load Dispatch Centers for relieving congestion in Inter-State Transmission Systems (ISTS) and Intra-State System which are incidental to the ISTS.
  • Installation of shunt capacitors, series compensators and other reactive energy generators for improvement of voltage profile in the grid.
  • Installation of standard and special protection schemes, pilot and demonstrative projects, and for setting right the discrepancies identified in protection audits on regional basis.
  • Renovation and Modernization (R&M) of transmission and distribution systems for relieving congestion.
  • Any other scheme/project in furtherance of the above objectives, such as, conducting technical studies and capacity building etc.
  • Projects proposed by distribution utilities in the above areas that have a bearing on grid safety and security, provided these are not covered under any other scheme of the Government of India will be eligible under this scheme. Private Sector projects will not be eligible for assistance from the Fund.
  • This information was given by Shri Jyotiraditya Scindia, Minister of State for Power (I/C) in a written reply to Lok Sabha.
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Procedure for Application, Screening, Appraisal, Monitoring, Sanction Etc. Of PSDF

  • The Regional Power Committees, Generating Companies, Transmission Licensees, Distribution Licensees, Load Dispatch Centers, Power Exchange as the case may be, shall furnish necessary details of the projects, schemes or activities to the Nodal Agency.
  • The Nodal Agency shall place these projects or scheme or activities for techno-economic scrutiny by the Appraisal Committee.
  • After scrutinizing the proposals, the Appraisal Committee shall submit its Appraisal Report and recommendations in writing to the Central Commission, and to the project entity who has submitted the proposal.
  • The Nodal Agency will approach the Central Commission, along with the recommendations of the Appraisal Committee, for ascertaining that the projects/scheme (s) / activities are covered within the scope of these Regulations.
  • The Central Commission, on receipt of such reference, will look into the following aspects viz. :-
  • Whether the proposed projects/schemes/activities are in line with the purposes defined in these regulations;
  • Whether the proposed scheme (s) have been prioritized in accordance with the principles envisaged in these regulations.
  • If the conditions specified in clause of this regulation are satisfied, the Central Commission shall communicate to the Nodal Agency that the proposed projects are in line with the principles defined in these regulations and have been prioritized in accordance with the principles envisaged in these regulations.
  • The Central Commission, at this stage shall not go into the details of the project cost, which will be examined by the appropriate commission only at the time of filing of tariff petition by the project entity to ensure inter alia that the tariff in respect of such project/scheme is not claimed for the portion of grant from the PSDF.
  • Based on the communication received in this regard from the Central Commission, the Nodal Agency shall approach the Monitoring Committee for sanction of the fund from the PSDF.

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