* **Private firms allowed to sell power independently**
* **Government removes purchase guarantee for distributors**
* **Policy hailed as landmark for clean energy**
* **Analysts urge competitive market, stronger grid**



"Private investors can now set up renewable energy-based power plants, choose their customers, negotiate prices and use the national grid to deliver electricity -- removing the state-run Power Development Board (PDB) as the sole buyer and seller from the process, according to a new policy.

State-owned power distribution companies will also be allowed to buy electricity from these plants if they wish. But unlike previously, the government will not now guarantee that these agencies will purchase 20 percent of the electricity produced.

Approved recently, the policy, titled "Enhancement of Private Participation in the Renewable Energy-based Power Generation", is the first of its kind to allow private firms to produce and sell power independently.

Sustainable energy advocates call it a "landmark" move to increase competition, transparency and investor confidence. Meanwhile, large businesses say it would draw local and foreign investment into clean energy as the government targets 20 percent of its electricity generation from renewable sources by 2030.

To tap the full benefits of the policy, analysts said the entire market operation should be ensured on competitive terms, and grid stability should also be maintained."

Private firms can now bypass BPDB and sell renewable power directly to customers