With the ever increasing population of India the demand and use of energy in agriculture, industry and the domestic and public sectors has become an issue of serious concern. There is a huge capital requirement for setting up power plants, pipelines, ports, terminals, railway tracks to move fuel etc. Energy security has become a core focus with the Indian Economy growing at the annual rate of 7 to 8 percent. In recent years, the Government of India has initiated multiple measures which include encouraging private sector participation, a more holistic approach towards broad basing its supply base, and improving efficiency in the sector as a whole. Ten-year tax holiday has been offered to projects in generation and distribution of power. In the last four decades energy consumption has grown by about 700 percent in India. Presently there are is no clear policy framework for the Energy Sector. There is a pressing requirement to constitute an independent regulatory body for the energy sector to determine pricing of energy, the target market structure, cross-border investments and imports and exports of energy products and thus paving the way to attract investments and bring efficiency in the sector.
The Energy Conservation Act, 2001
(http://powermin.nic.in/acts_notification/energy_conservation_act/) was enacted to provide for efficient use of energy and its conservation and for other connected and incidental matters. The Act has defined Energy as ‘any form of energy derived from fossil fuels, nuclear substances or materials, hydro-electricity and includes electrical energy or electricity generated from renewable sources of energy or bio-mass connected to the grid’.