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• Fixing trading margin in inter-state trading of electricity, if considered necessary.CERC also has advisory functions on:• Formulation of national electricity policy and tariff policy;• Promotion of competition, efficiency and economy in the activities of the electricityindustry;• Promotion of investment in electricity industry; and• Any other matter referred to CERC by the Government of India.D. Needs assessment1. National Energy StrategyThe National Energy Strategy is based on the IEP announced in 2008. The broadvision behind IEP is to meet the demand for energy services of all sectors at competitiveprices to deliver a sustained growth rate of 8 per cent through 2031-32, and to meet thelifeline energy needs of all citizens.This calls for an approach to realizing a cost-effective energy system through thefollowing elements:• Energy markets should be competitive, wherever possible, though competitionalone has been shown to have its limitations in a number of areas of the energysector and independent regulation becomes even more critical in such instances;• Pricing and resource allocations that are determined by market forces under aneffective and credible regulatory oversight;• Transparent and targeted subsidies;• Improved efficiencies across the energy chain;• Policies that reflect externalities of energy consumption;• Policies that rely on incentives/disincentives to regulate market and consumerbehaviour;• Policies that are implementable; and• Management reforms that create accountability and incentives for efficiency.With regard to climate change concerns, the thrust has been on energy efficiencyimprovement in all sectors, on mass transport and on accelerated development ofnuclear and hydro electricity. The most important among the strategy recommendationsincluded technology mission for clean coal technologies and focus on R&D on variousclimate-friendly technologies. The IEP framework has been developed over a 25-yeartime horizon (2006-07 to 2031-32). This is spread over to five FYP periods and stronglyrecommends the low-carbon route: the thrust during the 12 th FYP period and subsequentyears is on the low-carbon route.Thermal power generation options under low-carbon strategiesMr. Kirit Parikh, Chairman, Expert Committee on Integrated Energy Policy during 2005-06, subsequently chaired the Expert Group on Low Carbon Strategies for Inclusive62