Diesel, A Transportation Fuel, Is Cheaper For Power Generation Than Traditionally Used Liquid Fuel Jaideep Mishra NEW DELHI THERE are reports of crippling shortages of electricity pan-India and rising dieselisation in tandem, to fuel power generation. It seems to point at a deficit in policy making. Note that cross-country trading of electricity remains minuscule, notwithstanding nominally power surplus regions. It's also a fact that the margin on power trading remains clamped at a lowly 4 paise per unit. What's surely required is holistic energy policy. Given the current power deficit, the policy solution is to step-up capacity addition in power generation, revamp distribution and cut down on systemic leakage. But concurrently, what's required is proactive policy for inter-state trading of power. Such a policy paradigm would make better use of existing capacity, and provide power to deficit regions at modest marginal cost. Yet the summary ceiling on power trading, now in place for years, would scarcely incentivise transactions and boost exchange. Actually, to continue with the ceiling rates even as diesel-powered electricity is supplied at Rs10 per unit seems wholly incongruous. It is true that in a scenario of widespread shortages, regulating margins is quite desirable, so as to avoid sheer profiteering. However, a rigid regulatory approach may well short-circuit the still fledging national market for electricity and discourage power exchange. Further, the norm that power traded cross-country be no dearer than the intra-state price, save for wheeling charges, does not seem particularly market-friendly either. Given that the power sector is hugely capital intensive, the lack of reasonable market design and margins can stultify trading and dispatch. Besides, the credit risks endemic in inter-utility sales here surely need to be factored into the traded price of power. Such exchange needs a policy push. However, a recent staff paper of the CERC, the electricity regulator, suggests low priority for "open access' to transmission line capacity. Now the idea of open access is that efficient power producers can competitively seek custom. Yet the paper on