India’s power industry has been one of the most dynamic one in the world given the variety of sources it uses for generation, transmission and distribution of energy. The country is the world’s third largest electricity producer (with a production capacity of 1,278.91 TWh in 2015) and the fourth largest power consumer. Moreover, the 5th largest installed capacity in the world is situated here. The installed power capacity in India totalled 306.36 GW, as of September 2016. The country is also home to the world’s largest single location solar power plant, with a capacity of 648 megawatts, located in Kamuthi, Tamil Nadu.
During the period FY2010 – FY2016, India saw its electricity production growing at a CAGR of 6.21% . Between April 2016 and August 2016, electricity production surged to 486.44BU, a 5.69% increase on year-over-year basis. Owing to factors like rise in population, increase in per capita income, urbanisation, industrialisation, and improving standard of living, the country’s power consumption is predicted to reach 1,894.7 TWh in 2022, up from 1174.07 TWh in 2015.
‘India’s got diversity in power production sector too!’
India is known to produce power from a variety of sources. These include conventional sources like natural gas, coal, oil, hydro, and nuclear; and non-conventional sources like solar, wind, and domestic and agri wastes. Due to alarming increase in pollution, the government of India has shifted its focus from fuel-based energy to solar and wind energy. It is estimated that by 2022, solar power will contribute 100 GW, while wind energy will account for 60 GW. As per the estimations of the Planning Commission’s 12th Five Year Plan, domestic energy generation is likely to touch 669.6 Million Tonnes of Oil Equivalent (MTOE) by 2016-2017. Further, by 2021-2022, this value is estimated to reach 844 (MTOE).
The government of India has been introducing various policies and schemes to expand the power industry in India whilst keeping it clean (not causing pollution). Listed below are the goals set by the government of India:
Under the 12th Five Year Plan (2012-17), India targets addition of 885 GW.
By 2019, the Indian government aims to produce 2 trillion units (kilowatt hours) of energy.
By 2022, the government wants to add 175 GW of renewable energy and restart work on hydro power projects.
Under the 13th Five Year Plan (2017-22), the country aims to add 100 GW.
By 2030, India aims to have 40% of its electricity generated from renewable energy.
“The Indian power sector has been attracting too many national and international investments due to its promising future”
The Indian power industry is enjoying support from around 293 domestic and foreign companies that will help the country generate 266 GW of energy from wind, sun, biomass, and small hydro sources over the next 5 to 10 years. Investments from these companies would amount to circa USD 310-350bn. By 2020, the wind energy segment alone is expected to have investments of about USD 14.91bn. During the period between April 2000 and March 2016, India’s power industry attracted foreign direct investments (FDI) totalling USD 10.48bn. It is predicted that by the end of the 12th Five Year Plan, the industry will attract investments of circa USD 228.75bn, with 60% of them coming from the private sector. Currently, the players that are leading the market include NTPC, Tata Power, NHPC, Reliance Power, and CESC limited.