In order to meet the increasing power demand and to harness the untapped power potential of the State, both hydro and thermal, the Govt. of Meghalaya has decided to involve the State Sector, Joint Sector, Central Sector and Private Sector for execution of power projects.

The various sectors are defined as under:

1. State Sector :
   The State Government shall set up a State Generating Entity for promoting the Projects identified in the State Sector/Joint Sector.
   
   The State Generating entity shall strictly follow the Govt. policy in terms of employment and other developmental activities.
   
   
2. Joint Sector:
   The State Generating entity shall also explore the possibility of joint ventures with other generating companies to achieve its objectives in view of the constraints of limited financial resources available with the State Government.
   
   The State Generating entity and a generating company, selected by the process of bidding, shall enter into a joint venture agreement which will clearly define the extent of participation by each partner and sharing of risks relating to implementation and operation of the project.
   
   
3. Central Sector:
   Government of India undertakings such as NEEPCO, NHPC, NTPC, DVC, ONGC etc.
   
   
4. Private Sector:
   A registered private owned company/ consortium.

1. HYDRO POWER DEVELOPMENT
   
   The hydro power potential of Meghalaya is 3000 MW which is about 3% of the total hydro potential of the country. The power potential harnessed so far is only 185 MW with another 84 MW under implementation. Addition of another 40 MW is also being undertaken. Thus there is scope for further development in the hydro potential.
   
   The power projects have been divided into the following three categories for allotment to the eligible bidder i.e. a Company or a Consortium of Companies whether in the Public or Private sector.
   
   

   Category-I :	Small hydro projects up to 25MW capacity. Projects to be allotted through MOA Route in a transparent manner. However, projects below 10MW to be implemented through local participation.
   Category-II :	Medium hydro Projects above 25 MW and below 100 MW. Projects to be allotted through MOA Route in a transparent manner.
   Category-III :	Large and mega Projects above 100 MW capacity. Projects to be allotted through ICB Route, unless it is handed over to Govt. of India Undertakings.

   
   
   1. As a long term strategy, the Government shall make efforts for survey and investigation of the potential hydro/ thermal sites and for pre- paration of bankable detailed project report (DPR) for future execution.
      
      
   2. The generating company will be encourage to develop power plants in accordance with Section 8 of the Indian Electricity Act, 2003.
      
      
   3. The generating companies may identify potential projects on their own. However, the generating companies shall have to approach the government before taking up such projects. The company should have a local registered office within the state and also a local director to participate in the project whose share will be transferable to the tribals only. All terms and conditions of this policy shall also apply to such projects also.
      
      
   4. The State Govt. shall expedite suitable approval under the Meghalaya Land Transfer Act so as to facilitate investment in the Power Sector.
      
      
   5. Projects shall be named according to the location of the project and will be allotted on Build, Own, Operate & Transfer (BOOT) for a period of 35-40 years and thereafter the projects will revert back to the State Govt. free of cost.
      
      
   6. Royalty shall be levied from the allotted projects in the form of free power @12% and above of the deliverable energy during that period starting from the date of synchronization of the first generating unit, out of which the Govt. will plough over 2% for sustainable development cost of the area where the project is situated. A tripartite committee consisting of the representative of the state Govt. developers of the projects and a representative of the local committee will decide the schemes to be taken up in the area in a transparent manner.
      
      
   7. In view of the need to generate fund for development of environmental and social sector, Cess per unit of the power generated will be charged for meeting each of the following social development costs:development costs:
      
      
      1. Green cess @ 1paise per unit.
      2. Education @ 1paise per unit
      3. Health @ 1paise per unit
      4. Sustainable development @ 1paise per unit, to be passed on to a Committee consisting of local people for the Project Affected Area and one nominee each from the Govt. and the Project developer.
         
         However, projects below 25 MW will be exempted from payment of the cess.
         
         
   8. An Upfront premium of Rs. 1.00 lakh per MW will be charged from all such projects on IPP/PPP/JV mode for those projects of 25 MW and above. 50% will be payable at the time of signing the MOA, 25 % at the time of signing the Implementation Agreement and the remaining 25% immediately at the time of financial closure.
      
      
   9. The Developers shall be free to dispose of power from the Projects, after allowing for royalty in the shape of free power and meeting the demand in the State.
      
      
   10. The incentives /concessions offered by the Ministry of New and Renewable Energy shall be applicable for small hydro projects up to 25 MW. The State Govt. will facilitate setting up of such projects.
       
       
   11. The State Govt. shall encourage setting up of Captive power projects by the private sector to augment the power supply. Private industries will be permitted to go for captive generation up to 60 MW subject to the aforesaid conditions. For higher captive capacity, decision will be taken by the State Government on a case to case basis. Open access shall be facilitated wherever necessary according to the provisions of the act.
       
       
   12. The selection for IPPs will be based on efficiency and preference will be given to companies with strong technical and financial credentials.
       
       
   13. The State Govt. shall encourage de-centralized generation and distribution for remote and inaccessible areas where grid connectivity is either not feasible or not cost effective and the resources are available.
       
       
   14. Renovation, modernization & up-gradation of old hydro power stations shall be accorded priority as it is a faster and cheaper way of capacity addition than installing new capacity. The State Govt. would encourage Joint Ventures with the private sector at the plant level for Renovation and Modernization schemes with suitable bidding criteria.
       
       
2. THERMAL POWER PROJECTS DEVELOPMENT
   
   The State has a coal reserve of about 564 million tonnes, the calorific value of which ranges from 5694 kcal /kg to 9772 kcal/kg. The sulphur content of the coal ranges from 1.8% to 7.1% and the ash content ranges from 1.3% to 62%. The major coal reserves are in the southern belt of the State. Very close to these major coal reserves, there are huge quantities of limestone which is estimated at about 1000 million tonnes. Thus there is ample scope to develop thermal power stations to meet the baseload demand of the State. The detailed coal mine spreading over the state is enclosed at ANNEXURE – V.
   
   The state has to exploit the abundant coal resource to meet the existing power crisis by setting up of Thermal Power Projects and maintain an ideal mix of 40:60 of hydro and thermal mix. With this in mind the state has set an ambitious target of achieving a capacity addition of 1000- 2000 MW Thermal power by end of 11th plan on the basis of the following :
   
   
   1. Company or a Consortium of Companies, whether in the Public or Private sector will be encouraged for setting up of Thermal Power Project as per provision laid down in Section 7 of the Indian Electricity Act, 2003.
      
      
   2. The generating companies may identify potential projects on their own and develop thermal power plants in compliance with section 7 of the Indian Electricity Act, 2003. However, the generating companies shall have to approach the Government for facilitating the project. All terms and conditions of this policy applicable to thermal power plants shall apply
      
      
   3. The State Govt. shall expedite suitable approval under the Meghalaya Land Transfer Act so as to facilitate investment in the Power Sector.
      
      
   4. The State Govt. shall encourage setting up of Captive power projects by the private sector/ public undertakings to augment the power supply. Open access shall be facilitated wherever necessary according to the provisions of the Act. Terms and conditions of this policy will be applicable to such captive power plants.
      
      
   5. In view of the need to generate fund for development of environmental and social sector, Cess per unit of the power generated will be charged for meeting each of the following social development costs:
      1. Green cess @ 1paise per unit.
      2. Education @ 1paise per unit
      3. Health @ 1paise per unit
      4. Sustainable development @ 1paise per unit, to be passed on to a Committee consisting of local people for the Project Affected Area and one nominee each from the Govt. and the Project developer.
         
         
   6. Employment to the locals should be given priority according to the terms and conditions as may be agreed upon provided that such terms and conditions ensure at least 80% employment for the bonafide residents of the State in the Group C & Group D post and preference for employment for bonafide residents of the State in other categories.
      
      
   7. The State Govt. shall encourage de-centralised generation and distribution for remote and inaccessible areas where grid connectivity is either not feasible or not cost effective and the resources are available.
      
      
   8. With a view to expedite Letter of Allotment(LOA) in respect of coal fired projects, the Govt. of Meghalaya shall play a role of facilitator in coordinating various issues related to coal linkage with the coal mine owner of the state and coal block allocation with the Ministry of coal. The Govt. will facilitate establishment of a partnership with the power companies and the mine owners.
      
      
   9. Any environmental issue has to be compensated for and in accordance with the guide lines issued by the MOEF Govt. of India.
      
      
   10. The Relief & Rehabilitation (R&R) package for Thermal power stations, wherever required, should adequately compensate and address the concern of the Projects Affected People (PAP).The generating companies should also attend to the local needs through corporate social responsibility.
       
       
   11. Developers should adopt technologies that improve machines gross efficiency in the interest of environmental protection, by using super critical technology, in line with the Integrated Energy Policy of the GOI.