Power Sector in India

When India became independent in 1947, the country had a power generating capacity of 1,362 megawatt (MW). Today, India is the sixth largest in terms of power generation and the per capita power consumption in the country is 733.54 kilowatt-hours per year (kWh/yr). It is said that power or electricity is the most critical component of infrastructure, which affects the economic growth and well-being of a nation. Presently, about 65 per cent of the electricity consumed in India is generated by thermal power plants, 22 per cent by hydroelectric power plants, three per cent by nuclear power plants and the rest 10 percent come from other alternate sources like solar, wind, biomass, etc. With major developments in the infrastructure sector and improvement in the standard of living, the demand for power in the country is expected to grow at a rate of 10-12 per cent up till 2017.

The power sector is mainly divided into three major pillars: Generation, Transmission, and Distribution. The generation is divided into also three sectors: Central Sector, State Sector, and Private Sector. Indian solar installations are forecasted to be approximately 1,000 MW in 2014, according to Mercom Capital Group, a global clean energy communications and consulting firm.

The investment climate is positive in the power sector. Due to policy of liberalisation, the sector has witnessed higher investment flows than envisaged. The Ministry of Power has  proposed for the addition of 76,000 MW of power capacity in the 12th Five Year plan (2012-17). The Ministry has set a target of adding 93,000 MW in the 13th Five Year Plan (2017-2022). The industry has attracted FDI worth INR. 43,530.99 crore (US$ 7.24 billion) during the period April 2000 to May 2014. Some of the major investments made into the Indian power sector are by Suzlon Group, Tata Power Renewable Energy Ltd – subsidy of Tata Power, Jakson Group, Bharat Heavy Electricals Ltd (BHEL), Swelect Energy Systems (SWEES).

India has emerged as one of the fastest growing economies in the world. Its current economic performance reflects a healthy trend based on increased consumption, investment and exports. Over the next five years, this growth is expected to continue. The Government of India has identified the power sector as a key sector of focus to promote sustained industrial growth.

India currently operates 19 atomic reactors which produce 4,780 MW of electricity and has set an ambitious target of generating 63,000 MW nuclear power by 2032. With many bilateral nuclear agreements in place, India is expected to become a major hub for manufacturing nuclear reactors and associated components. Market-oriented reforms, such as the target of 'Power for all' by and plans to add 88.5gigawatts (GW) of capacity by 2017 and 100 GW by 2022, provide high incentives for capacity addition in power generation, which would increase the demand for electrical machinery. Foreign participation in the development and financing of generation and transmission assets, engineering services, equipment supply and technology collaboration in nuclear and clean coal technologies is expected to increase.