The Union Cabinet today approved the proposal of the Ministry of Power for operationalization of the Power System Development Fund (PSDF) and the scheme formulated for utilization of funds deposited therein based on the procedure laid down in the Central Electricity Regulatory Commission (CERC) Power System Development Fund Regulations.

The Power System Development Fund will be utilized for the following purposes :

i)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.

ii)Installation of shunt capacitors, series compensators and other reactive energy generators for improvement of voltage profile in the grid.

iii)Installation of standard and special  protection schemes, pilot and demonstrative projects, and for setting right  discrepancies identified in protection audits on regional basis.

iv)Renovation and Modernization (R&M) of transmission and distribution systems for relieving congestion.

v)Any other scheme / project in furtherance of the above objectives, such as, conducting technical studies and capacity building, etc.

The PSDF will be operationalized within three months.