Flourishing POWER SECTOR enlightening India


Electricity or power is one of the critical components for the socio-economic growth and overall development of any country. If there is no power, then the country lacks basic infrastructure which in turn paralyses the country’s economy. The proper planning and implementation of power utility is as important as maintaining the economic quotient of the nation.

India has always been rich in the availability of power resources. Its power sector is one of the most diversified in the world. This is because India does not rely on the conventional resources. It has embraced the new and evolving technologies as well as preserving its natural resources.

The sources of power generation in the country range from conventional ones such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic waste. The electricity demand in the country has been increasing rapidly in the country and is expected to rise further in the years to come.

To meet the ever-increasing demand, the authorities have been installing additional electricity generating capacities to the existing ones. As per reports, in May 2018, the country ranked 4th in the Asia Pacific region out of 25 nations on an index that measures their overall power.

Market Size

The power sector in India is undergoing a significant change redefining the industry outlook. While sustained economic growth continues to drive electricity demand in India, the Government of India’s focus on attaining ‘Power for all’ has accelerated capacity addition. As of May, 2019, the total installed capacity of power stations in India stood at 356.82 Gigawatt (GW) and it is increasing by the day.

Investment Scenario

According to reports, the power sector attracted Foreign Direct Investment (FDI) of USD 14.32 billion between April 2000 and March 2019 accounting for 3.41 per cent of total FDI inflows in India. Some of the major investments and developments in the sector include, Renascent Power Ventures Pvt Ltd’s acquisition of 75.01 per cent stake in Prayagraj Power Generation Company Limited (PPGCL) for USD854.94 million in November, 2018; Kohlberg Kravis Roberts & Co (KKR) acquired Ramky Enviro Engineers Limited for USD 530 million in August, 2018 and ReNew Power made the largest M&A deal by acquiring Ostro Energy for USD 1,668.21 million in April, 2018.

Government Initiatives

The Government of India has identified power as a key sector of focus so as to promote sustained industrial growth and some initiatives undertaken by the Government to boost the power sector include:

  • A draft amendment to Electricity Act, 2003 was been introduced. It discusses separation of content & carriage, direct benefit transfer of subsidy, 24×7 Power supply is an obligation, penalisation on violation of PPA, setting up Smart Meter and Prepaid Meters along with regulations related to the same.
  • Ujwal Discoms Assurance Yojana (UDAY) was launched to encourage operational and financial turnaround of state-owned Power Distribution Companies (DISCOMS), with an aim to reduce Aggregate Technical & Commercial (AT&C) losses to 15 per cent.
  • The Ministry of New and Renewable Energy set solar power tariff caps at Rs 2.50 (USD 0.04) and Rs 2.68 (USD 0.04) unit for developers using domestic and imported solar cells and modules, respectively.
  • The Government of India approved National Policy on Biofuels – 2018, the expected benefits of which are cleaner environment, employment generation, reduced import dependency, boost to infrastructural investment in rural areas and additional income to farmers.

The achievements as regards power sector in the past four years include India’s rank jumped to 24 in 2018 from 137 in 2014 on World Bank’s Ease of doing business – “Getting Electricity” ranking; Energy deficit reduced to 0.7 per cent from 4.2 per cent in FY14; 100 per cent village electrification achieved under Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY).

Road Ahead

The Government of India has released its roadmap to achieve 175 GW capacity in renewable energy by 2022, which includes 100 GW of solar power and 60 GW of wind power. It is also preparing a ‘rent a roof’ policy for supporting its target of generating 40 gigawatts (GW) of power through solar rooftop projects by 2022. The coal-based power generation capacity in India, which currently stands at 191.09 (As of May 2019) GW is expected to reach 330-441 GW by 2040.

India could become the world’s first country to use LEDs for all lighting needs by 2019, thereby saving Rs 40,000 crore (US$ 6.23 billion) on an annual basis.
All the states and union territories of India are on board to fulfil the Government of India’s vision of ensuring 24×7 affordable and quality power for all as per the Ministry of Power and New & Renewable Energy, Government of India.

Source: https://www.ibef.org/industry/power-sector-india.aspx

Article by Mr. Shrikrishna Kulkarni

Author Shrikrishna Kulkarni
Shrikrishna Kulkarni

Strong sales professional with a Diploma in Electrical Engineering + Diploma in Business Management focused in Electrical and Electronics Engineering & Business Management from Shri Bhagubhai Mafatlal Polytechnic, Vileparle.




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