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9. The Company shall execute the project within 15 months from the date of MOU entered and generation of power should be made by 7.7.2001. For every quarter the progress report on implementation to be submitted to NEDCAP, . . .

17. Consequent to the entering of the above MOU, the power generation had actually started with effect from 13.1.2003. The Commission constituted under Reforms Act, having examined the application made by the petitioner under Section 44 of the Electricity Supply Act read with Section 21 (3) of the Reforms Act, consented for the installation of the captive power plant sets as standby for the initial start up power supply of the bagasse based co-generation plant, through order dated 25.1.2002 in O.P. No. 372/2001, subject to certain terms and conditions. Some of the excerpts of the said order at paragraphs 2, 4, 6 and 11, which are relevant, are extracted as follows for ready reference:

11. After examining the application in the light of the Practice Directions (REV-I) APERC No. 7 dated 20.2.2001 issued by the Commission, the Commission hereby consents for installation of Captive Power Plant 2 x 725 KVA. DG sets as standby for the initial start up power supply of the Bagasse based co-generation plant of 20 MW and in emergency and also consents for captive consumption of up to 5.01 MW of power from the Bagasse based co-generation plant of 20 MW, subject to following terms and conditions

25. In this context, it is essential to look into the Gazetted resolution of the Government of India dated 6.11.1996, which deals with the promotion of co- generation power plant. In the said resolution it is noted that urgent need has been recognized, to open an alternative route to augment the industrial growth and also the power generation. Further through the said resolution, the State Governments were requested to give high priority to set up captive power plants in their States and also encourage absorption of available surplus power to be generated from captive power plant into the State grid at a remunerative tariff. With the combined objectives of promoting better utilization of precious energy resources in the industrial activities and creation of additional power generation capacity in the system, encouragement to co-generation plants in the country was suggested through the said resolution. The original language employed in the said resolution dated 6.11.1996 is as follows:

"Accordingly the State Governments were requested to accord high priority to setting up of captive plants in their States and also encourage absorption of the available surplus power, to be generated in a captive power plant, in the State grid at a remunerative tariff.'

26. For better appreciation it is necessaly to extract the definition of co-generation and the objectives of the policy in the resolution dated 6.11.1996 as under:

"2. Definition of co-generation 2.1 A co-generation facility is defined as one which simultaneously produces two or more forms of useful energy such as electric power and steam, electric power and shaft (mechanical) power etc. Co-generation facilities, due to their ability to utilize the available energy in more than one form, use significantly less fuel input to produce electricity, steam, shaft power or other forms of energy than would be needed to produce them separately. Thus by achieving higher efficiency, co-generation facilities can make a significant contribution to energy conservation.