Electricity sector in India

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The utility electricity sector in India had an installed capacity of 303 GW as of 30 Jun2016.[1][2]
Renewable Power plants constituted 28% of total installed capacity and Non-Renewable Power
Plants constituted the remaining 72%. The gross electricity generated by utilities is 1,106 TWh
(1,106,000 GWh) and 166 TWh by captive power plants during the 201415 fiscal.[3] The gross
electricity generation includes auxiliary power consumption of power generation plants. India
became the world's third largest producer of electricity in the year 2013 with 4.8% global share
in electricity generation surpassing Japan and Russia.[4]
During the year 2014-15, the per capita electricity generation in India was 1,010 kWh with total
electricity consumption (utilities and non utilities) of 938.823 billion or 746 kWh per capita
electricity consumption.[3] Electric energy consumption in agriculture was recorded highest
(18.45%) in 2014-15 among all countries.[3] The per capita electricity consumption is lower
compared to many countries despite cheaper electricity tariff in India.[5]

Sources of electricity in India by Installed Capacity as of 2016[6]

By the end of calendar year 2015, despite poor hydro electricity generation, India has become
power surplus country with huge power generation capacity idling for want of electricity
demand.[7][8][9][10] The calendar year 2016 started with steep fall in the international price of energy
commodities such as coal, diesel oil, naphtha, bunker fuel and LNG which are used in electricity
generation in India.[11][12][13][14][15] Earlier many of the power stations which are using fuels other
than coal are unable to operate due to high cost of LNG and petro products. This situation has
changed due to glut in petroleum products globally. The prices are falling to such an extent that
these fuels have become cheaper to give competition for pit head coal based power generators.
Many of the stranded gas and liquid fuel based power stations would be competing with
indigenous coal based power stations in an electricity market where demand growth is not
encouraging.[16] All the segments of the electricity sector such as fuel suppliers, fuel transporters

(railways, harbours, pipelines, etc.), Electricity generators, electricity transmission companies

and distribution companies would be facing severe competition to cut down the prices and
improve their operating efficiency in a final consumer dictated market.[17] If the power
distribution companies, keep on charging exorbitant tariffs to bulk consumers, they would be
opting for solar/wind power plants or take over an existing power plant to meet their captive
consumption. Due to tepid growth in electricity consumption, coal stocks are continuously
building up at power stations as well as coal mines.[18][19]
In order to address the lack of adequate electricity availability to all the people in the country by
March 2019, GoI has launched a scheme called "Power for All". This scheme will ensure
continuous and uninterrupted electricity supply to all households, industries and commercial
establishments by creating and improving necessary infrastructure. Its a joint collaboration of
GoI with states to share funding and create overall economic growth.[20][21]

History
The first demonstration of electric light in Calcutta was conducted on 24 July 1879 by P W
Fleury & Co. On 7 January 1897, Kilburn & Co secured the Calcutta electric lighting licence as
agents of the Indian Electric Co, which was registered in London on 15 January 1897. A month
later, the company was renamed the Calcutta Electric Supply Corporation. The control of the
company was transferred from London to Calcutta only in 1970. Enthused by the success of
electricity in Calcutta, power was thereafter introduced in Bombay.[22] Mumbai saw electric
lighting demonstration for the first time in 1882 at Crawford Market and Bombay Electric
Supply & Tramways Company (BEST) set up a generating station in 1905 to provide electricity
for the tramway.[23] The first hydroelectric installation in India was installed near a tea estate at
Sidrapong for the Darjeeling Municipality in 1897.[24] The first electric street light in Asia was lit
on 5 August 1905 in Bangalore.[25] The first electric train ran between Bombay's Victoria
Terminus and Kurla along the Harbour Line, in 1925.[26]

Installed capacity
The total installed power generation capacity is sum of utility capacity, captive power capacity
and other non-utilities

Utility power
Growth of Installed Capacity in India[3][1]
Thermal (MW)
Renewable (MW)
%
Installed
Nuclea
SubGrowth
Capacit
Other Sub-Total Total
r
Diese Total
(on
y
Coal Gas
Hydel Renewabl Renewabl (MW) yearly
l Therma (MW)
as on
e
e
basis)
l
31-Dec756 98
854
508
508 1,362
-

Growth of Installed Capacity in India[3][1]

Thermal (MW)
Renewable (MW)
%
Installed
Sub- Nuclea
Capacit
Other Sub-Total Total Growth
r
Diese Total
(on
y
Coal Gas
Hydel Renewabl Renewabl (MW) yearly
l Therma (MW)
as on
e
e
basis)
l
1947
31-Dec1,004 149
1,153
560
560 1,713 8.59%
1950
31-Mar1,597 228
1,825
1,061
1,061 2,886 13.04%
1956
31-Mar2,436 300
2,736
1,917
1,917 4,653 12.25%
1961
31-Mar4,417 137 352
4,903
4,124
4,124 9,027 18.80%
1966
31-Mar8,652 165 241
9,058
640 6,966
6,966 16,664 10.58%
1974
31-Mar10,83
14,875 168 164 15,207
640
10,833 26,680 12.02%
1979
3
31-Mar14,46
26,311 542 177 27,030 1,095
14,460 42,585 9.94%
1985
0
31-Mar18,30
41,236 2,343 165 43,764 1,565
18,307 63,636 9.89%
1990
7
31-Mar21,65
54,154 6,562 294 61,010 2,225
902
22,560 85,795 4.94%
1997
8
31-Mar26,26
105,04
62,131 11,163 1,135 74,429 2,720
1,628
27,897
4.49%
2002
9
6
31-Mar13,69
34,65
132,32
71,121
1,202 86,015 3,900
7,760
42,414
5.19%
2007
2
4
9
31-Mar- 112,02 18,38
38,99
199,87
1,200 131,603 4,780
24,503
63,493
9.00%
2012
2
1
0
7
31 Mar
169,11 23,06
41,26
271,72
1,200 188,898 5,780
35,777
77,044
11.98%
2015
8
2
7
2
31 Mar 185,17 24,50
42,78
301,96
993 210,675 5,780
42,727
85,510
11.13%
2016
2
8
3
5
31 May 186,24 24,50
42,78
303,08
919 211,670 5,780
@42,849
85,632
9.88%
2016
3
9
3
3
@ for the break up of other renewable sources (see Table below))

The planned additional thermal power generation capacity excluding renewable power during the
last two years of the 12th plan period (up to March 2017) is nearly 84,000 MW.[27]

Captive power

The installed captive power generation capacity (above 1 MW capacity) in the industries is
47,082 as on 31 March 2015.[3] Another 75,000 MW capacity diesel power generation sets
(excluding sets of size above 1 MW and below 100 kVA) are also installed in the country.[28][29] In
addition, there are innumerable DG sets of capacity less than 100 kVA to cater to emergency
power needs during the power outages in all sectors such as industrial, commercial, domestic and
agriculture.[30]
Captive Power Generation
Source

Captive Power Capacity (MW)

Coal

Share

27,588

58.60%

83

0.17%

Hydroelectricity
Renewable energy source

Included in 'Oil'

Natural Gas

5,215

11.08%

Oil

14,196

30.17%

Total

47,082

100.00%

The total installed utility power generation capacity as on 30 June 2016 with sector wise & type
wise break up is as given below.[31]
Nuclea
r
(MW)

Thermal (MW)
Sector
Coal

SubTotal
Thermal

8.08 0.30

69.83

Central

51,390.00 7,555.33

State

64,130.50 7,210.70

Private

70,722.38 9,742.60

All India

186,242.8 24,508.6
8
3

Percentag
e

61.44

SubOther
Total
Hydel Renewab
Renewab
le
le
5,780.0 11,571.4
0.00 55,649.73
0.00 11,571.43 76,296.76
0
3
363.9
28,092.0
101,760.9
71,705.13
0.00
1,963.81 30,055.81
3
0
4
554.9
125,025.5
81,019.94
0.00 3,120.00 40,885.57 44,005.57
6
1
918.8 211,670.4 5,780.0 42,783.4
303,083.2
42,849.38 85,632.81
9
0
0
3
1

Diese
l

Gas

1.90

14.11

14.13

List of Indian States

State-wise All India installed capacity as of July 2015 [show]

Demand

Total
(MW)

Renewable (MW)

28.25

100

Demand trends
During the fiscal year 2015-16, the electricity generated in utility sector is 1,090,851 billion
KWh with a short fall of requirement by 23.557 billion KWh (-2.1%) against the 2.2% deficit
anticipated. The peak load met was 148,463 MW with a short fall of requirement by 4,903 MW
(-3.3%) against the 2.7% deficit anticipated. In LGBR 2016 report, India's Central Electricity
Authority anticipated for the 201617 fiscal year, a base load energy surplus and peaking surplus
to be 1.1% and 2.6% respectively.[33] Though few regions are expected to face energy shortage,
power would be made available adequately from the surplus regions with the higher capacity
inter regional transmission links.[34] By the end of calendar year 2015, India has become power
surplus country despite lower power tariffs.[7][8][35][36]
All India (Anticipated) Power Supply Position in FY 2016-17[33]
Energy
Peak Power
Region Requirement Availability Surplus(+)/Deficit( Demand Supply Surplus(+)/Deficit((MU)
(MU)
-)
(MW) (MW)
)
Northern
357,459
351,009
-1.8% 55,800 54,900
-1.6%
Western
379,087
405,370
+6.9% 51,436 56,715
+10.3%
Southern
310,564
320,944
+3.3% 40,145 44,604
-10.0%
Eastern
151,336
135,713
-10.3 % 21,387 22,440
+4.9%
North16,197
14,858
-8.3%
2,801 2,695
-3.8%
Eastern
All
169,40
1,214,642 1,227,895
+1.1% 164,377
+2.6%
India
3

Power Deficit (Region-wise)

Demand drivers
Of the 1.4 billion people in the world who have no access to electricity, India accounts for over
300 million. The International Energy Agency estimates India will add between 600 GW to 1,200
GW of additional new power generation capacity before 2050.[37] This added new capacity is
equivalent to the 740 GW of total power generation capacity of European Union (EU-27) in

2005. The technologies and fuel sources India adopts, as it adds this electricity generation
capacity, may make significant impact to global resource usage and environmental issues.[38]
Some 800 million Indians use traditional fuels fuelwood, agricultural waste and biomass cakes
for cooking and general heating needs. These traditional fuels are burnt in cook stoves, known
as chulah or chulha in some parts of India.[39] Traditional fuel is inefficient source of energy, its
burning releases high levels of smoke, PM10 particulate matter, NOX, SOX, PAHs,
polyaromatics, formaldehyde, carbon monoxide and other air pollutants.[40][41][42] Some reports,
including one by the World Health Organisation, claim 300,000 to 400,000 people in India die of
indoor air pollution and carbon monoxide poisoning every year because of biomass burning and
use of chullahs.[43] Traditional fuel burning in conventional cook stoves releases unnecessarily
large amounts of pollutants, between 5 and 15 times higher than industrial combustion of coal,
thereby affecting outdoor air quality, haze and smog, chronic health problems, damage to forests,
ecosystems and global climate. Burning of biomass and firewood will not stop, these reports
claim, unless electricity or clean burning fuel and combustion technologies become reliably
available and widely adopted in rural and urban India. The growth of electricity sector in India
may help find a sustainable alternative to traditional fuel burning.
In addition to air pollution problems, a 2007 study finds that discharge of untreated sewage is
single most important cause for pollution of surface and ground water in India. There is a large
gap between generation and treatment of domestic wastewater in India. The problem is not only
that India lacks sufficient treatment capacity but also that the sewage treatment plants that exist
do not operate and are not maintained. Majority of the government-owned sewage treatment
plants remain closed most of the time in part because of the lack of reliable electricity supply to
operate the plants. The wastewater generated in these areas normally percolates in the soil or
evaporates. The uncollected wastes accumulate in the urban areas cause unhygienic conditions,
release heavy metals and pollutants that leaches to surface and groundwater.[44][45] Almost all
rivers, lakes and water bodies are severely polluted in India. Water pollution also adversely
impacts river, wetland and ocean life. Reliable generation and supply of electricity is essential for
addressing India's water pollution and associated environmental issues.
Other drivers for India's electricity sector are its rapidly growing economy, rising exports,
improving infrastructure and increasing household incomes.
Growth of Electricity Consumption in India[3][46]
% of Total

Fiscal
Consumptio
year
n
Domesti Commercia Industria Tractio Agricultur
ending
(GWh)
c
l
l
n
e
on
31Dec4,182 10.11%
4.26% 70.78% 6.62%
2.99%
1947
31Dec5,610 9.36%
5.51% 72.32% 5.49%
2.89%
1950
3110,150 9.20%
5.38% 74.03% 3.99%
3.11%

Per-Capita
Generation
Misc (in kWh)

[clarification needed]

5.24
%

16.3

4.44
%

18.2

4.29

30.9

Growth of Electricity Consumption in India[3][46]

Fiscal Consumptio
% of Total
Generation
year
(in kWh)
n
Domesti Commercia Industria Tractio Agricultur
Misc [clarification needed]
ending (GWh)
c
l
l
n
e
on
Mar%
1956
313.75
Mar16,804 8.88%
5.05% 74.67% 2.70%
4.96%
45.9
%
1961
312.97
Mar30,455 7.73%
5.42% 74.19% 3.47%
6.21%
73.9
%
1966
314.13
Mar55,557 8.36%
5.38% 68.02% 2.76%
11.36%
126.2
%
1974
314.10
Mar84,005 9.02%
5.15% 64.81% 2.60%
14.32%
171.6
%
1979
313.83
Mar124,569 12.45%
5.57% 59.02% 2.31%
16.83%
228.7
%
1985
313.83
Mar195,098 15.16%
4.89% 51.45% 2.09%
22.58%
329.2
%
1990
314.01
Mar315,294 17.53%
5.56% 44.17% 2.09%
26.65%
464.6
%
1997
315.75
Mar374,670 21.27%
6.44% 42.57% 2.16%
21.80%
671.9
%
2002
314.45
Mar525,672 21.12%
7.65% 45.89% 2.05%
18.84%
559.2
%
2007
315.00
March
785,194 22.00%
8.00% 45.00% 2.00%
18.00%
883.6
%
-2012
314.88
March
824,301 22.29%
8.83% 44.40% 1.71%
17.89%
914.4
%
-2013
315.14
March
881,562 22.95%
8.80% 43.17% 1.75%
18.19%
957
%
-2014
315.37
March
938,823 23.53%
8.77% 42.10% 1.79%
18.45%
1010.0Provisional
%
-2015

The per capita annual domestic electricity consumption in India during the year 2009 was 96
kWh in rural areas and 288 kWh in urban areas for those with access to electricity in contrast to
the worldwide per capita annual average of 2,600 kWh and 6,200 kWh in the European Union.[47]

Rural electrification
See also: Rural Electrification Corporation Limited
As of 30 September 2015, 97.2% of 597,464 villages in India are electrified.[48] Of those who did
have access to electricity in rural India, the supply was intermittent and unreliable.[21]
Rural
# of
Electrification
states
rates
and UTs
100%
16
+99%

+95%

+90%

+80%

Under 80%

Remarks [48]

electrification %, un-electrified villages: Karnataka (99.9%, 34),

Uttara Khand (99.5%, 107), Himachal Pradesh (99.8%, 39),
Madhya Pradesh (99.2%, 396), West Bengal (99.97%, 13)
Bihar (97.0%), Rajasthan (98.9%), Chhattisgarh (94.6%), Jammu
& Kashmir (98.3%), Tripura (97.0%), Uttar Pradesh (98.6%)
JharKhand (91.5%), Odisha (92.8%), Nagaland (94.1%), Mizoram
(90.3%)
Assam (88.7%), Meghalaya (85.9%), Manipur (89.4%), Andaman
& Nicobar (86.1%)
Arunachal Pradesh (70.0%)

India's Ministry of Power launched Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) as
one of its flagship programme in July 2015 with the objective of providing round the clock
power to the rural areas . It focuses on reforms in rural power sector by separation of feeder lines
(rural households & agricultural) and strengthening of transmission and distribution
infrastructure.The earlier scheme for rural electrification viz. Rajiv Gandhi Grameen
Vidyutikaran Yojana (RGGVY) has been subsumed in the new scheme as its rural electrification
component.[49]

Electricity consumption
Satellite pictures of India show thick haze and black carbon smoke above India and other Asian
countries. This problem is particularly severe along the Ganges Basin in northern India. Major
sources of particulate matter and aerosols are believed to be smoke from biomass burning in
rural parts of India, and air pollution from large cities in northern India.
Play media
India lit up at night. This media, courtesy of NASA, was taken by the crew of Expedition 29 on
21 October 2011. It starts over Turkmenistan, moving east. India begins past the long wavy solid
orange line, marking the lights at the India-Pakistan borderline. New Delhi, India's capital and

the Kathiawar Peninsula are lit. So are Mumbai, Hyderabad, Chennai, Bangalore and many
smaller cities in central and southern India, as this International Space Station's video shifts
south-eastward through southern India, into the Bay of Bengal. Lightning storms are also
present, represented by the flashing lights throughout the video. The pass ends over western
Indonesia.
Per-Capita Electricity consumption (kWh)[50] (in 201415 provisional)
Per-Capita Consumption
State/Union Territory
Region
(kWh)
Dadra & Nagar Haveli
Western
13,769
Daman & Diu
Western
6,960
Goa
Western
1,803
Gujarat
Western
2,105
Chhattisgarh
Western
1,719
Maharashtra
Western
1,257
Madhya Pradesh
Western
813
Western Region
Puducherry
Southern
1,655
Tamil Nadu
Southern
1,616
[51]
Andhra Pradesh
Southern
1,040
Telangana
Southern
1,356
Karnataka
Southern
1,211
Kerala
Southern
672
Lakshadweep
Southern
657
Southern Region
Punjab
Northern
1,858
Haryana
Northern
1,909
Delhi
Northern
1,561
Himachal Pradesh
Northern
1,336
Uttarakhand
Northern
1,358
Chandigarh
Northern
1,052
Jammu & Kashmir
Northern
1,169
Rajasthan
Northern
1,123
Uttar Pradesh
Northern
502
Northern Region
Odisha
Eastern
1,419
Sikkim
Eastern
685
Jharkhand
Eastern
835
West Bengal
Eastern
647
Andaman & Nicobar Islands
Eastern
361
Bihar
Eastern
203
Eastern Region
Arunachal Pradesh
North Eastern
525

Per-Capita Electricity consumption (kWh)[50] (in 201415 provisional)

Per-Capita Consumption
State/Union Territory
Region
(kWh)
Meghalaya
North Eastern
Mizoram
North Eastern
Nagaland
North Eastern
Tripura
North Eastern
Assam
North Eastern
Manipur
North Eastern
North Eastern Region
National
1,010

704
449
311
303
314
295

Note: Per Capita Consumption=(Gross Electricity Generation + Net Import) / Mid Year
Population.

Electricity generation

*Electricity generation in India till 2012

India's electricity generation from 1950 to 1985 were very low when compared to developed
nations. Since 1990, India has recorded faster growth in electricity generation. India's electricity
generation has increased from 179 TW-hr in 1985 to 1,057 TW-hr in 2012.[4] Power generation
by coal fired plants and non conventional renewal energy sources (RES) has mainly contributed
to the growth in the total electricity generation whereas the contribution from natural gas, oil and
hydro plants has decreased in last four years (2012-2016). The gross utility electricity generation
target (excluding RES and imports from Bhutan) is 1,173 billion kWh during the year 2016-17
against the corresponding actual generation of 1,102 billion Kwh during the year 2015-16 with
6.41% annual growth target.[52][53] The CEA generation data is nearly 5% more than the NLDC
data.
Yearly gross electricity generation - mode wise (GWh)[3]
Yea
Nucle Hydr Sub
Utility and Captive
Fossil Fuel
RES
r
ar
o
total
Power
Coal Oil Gas
Min Sol Win Bio Oth Sub Utility Capti Mi Total
i ar d ma er total
ve sc
hyd
ss

ro
201
415
201
314
201
213
201
112

835,8 1,4 41,0 36,10 129,2 1,043,

28,2
61,7 1,105, 166,4
1,271,8
na na
na na
na
38 07 75
2
44
666
14
80
446 26
72
746,0 1,8 44,5 34,22 134,8 961,55
na na
87 68 22
8
47
2

na na na

59,6 1,021, 156,6

1,177,8
na
15
167 43
10

691,3 2,4 66,6 32,86 113,7 907,04

na na
41 49 64
6
20
0

na na na

57,4 964,48 144,0

1,108,4
na
49
9 09
98

612,4 2,6 93,2 32,28 130,5 871,22

na na
97 49 81
6
11
4

na na na

51,2 922,45 134,3

1,056,8
na
26
1 87
38

Notes: Coal includes lignite also; na data not available;

The total generation from all renewable energy sources is nearly 15% of the total electricity
generation (utility and captive) in India.

Conventional sources
Main article: Energy policy of India

Thermal power
A thermal power plant in Maharashtra
Thermal power plants convert energy rich fuels such as coal, natural gas, petroleum products,
agricultural waste, domestic trash/waste, etc. into electricity. Other sources of fuel include
landfill gas and biogases. In some plants, renewal fuels such as biogas are co-fired with coal.
India's electricity sector consumes about 72% of the coal produced in the country.[54]
Pollution from thermal power plants
The high ash content in India's coal affects the thermal power plant's potential emissions.[55]
Therefore, India's Ministry of Environment & Forests has mandated the use of beneficiated coals
whose ash content has been reduced to 34% (or lower) in power plants in urban, ecologically
sensitive and other critically polluted areas, and ecologically sensitive areas. Coal benefaction
industry has rapidly grown in India, with current capacity topping 90 MT.
India has an extensive review process, one that includes environment impact assessment, prior to
a thermal power plant being approved for construction and commissioning. The Ministry of
Environment and Forests has published a technical guidance manual to help project proposers
and to prevent environmental pollution in India from thermal power plants.[56] The operating coal
fired power stations need to invest nearly INR 12.5 millions per MW capacity for installing

pollution control equipment to comply with the latest emission norms notified by the Ministry of
Environment and Forests in the year 2016.[57][58]
Coal supply constraints

Demand, production and import of coal[59] (in million tonnes)

A large part of Indian coal reserve is similar to Gondwana coal. It is of low calorific value and
high ash content. The carbon content is low in India's coal, and toxic trace element
concentrations are negligible. The natural fuel value of Indian coal is poor. On average, the
Indian power plants using India's coal supply consume about 0.7 kg of coal to generate a kWh,
whereas United States thermal power plants consume about 0.45 kg of coal per kWh. This is
because of the difference in the quality of the coal, as measured by the Gross Calorific Value
(GCV). On average, Indian coal has a GCV of about 4500 Kcal/kg, whereas the quality
elsewhere in the world is much better; for example, in Australia, the GCV is 6500 Kcal/kg
approximately.[60] India imported nearly 95 Mtoe of steam coal and coking coal which is 29% of
total consumption to meet the demand in electricity, cement and steel production.[61] China has
banned import of high ash coal, high sulphur coal and contaminated coal with trace metals which
are causing air pollution.[62]
The state and central power generation companies are permitted by Government of India with
flexible coal linkage swaps from inefficient plants to efficient plants and from plants situated
away from coal mines to pit head to minimize cost of coal transportation thus leading to
reduction in cost of power [63]
Natural gas supply constraints
The installed capacity of natural gas-based power plants and the ready to be commissioned with
the commencement of natural gas supply is nearly 26,765 MW at the end of financial year 201415. These base load power plants are operating at overall PLF of 25% only due to severe
shortage of Natural gas in the country.[64] Imported LNG was too costly for the power generation.
Many of these power stations are shut down throughout the year for lack of natural gas supply.
Natural gas shortage for power sector alone is nearly 100 MMSCMD.[65] The break even price for
switching from imported coal to LNG in electricity generation is estimated near 6 US$/mmBtu.
[66]
Indian government has taken steps to enhance the generation from the stranded gas based
power plants for meeting peak load demand by waiving applicable import duties and taxes due to
drastic fall in the LNG and crude oil international prices.[67]

During the year 2016, global LNG spot prices have been falling drastically below 6 US$/mmBtu
due to excess production capacity.[68] Though LNG landed prices are competitive to the
electricity generation from the imported coal, there is limitation to import LNG due to lack of
adequate regasification capacity.[69] By the middle of 2016, LPG international spot prices have
also fallen drastically due to LPG market glut.[70] This would facilitate use of LPG in place of
Naphtha or diesel oil (23 kg of LPG is equal to one mmbtu) where the gas based power plants
are not able to receive re-gasified LNG.[71]

Gasification of Char/Coal
Gasification of coal or lignite or biomass, produces syngas or coal gas or wood gas which is a
mixture of hydrogen, carbon monoxide and carbon dioxide gases. Coal gas can be converted into
synthetic natural gas by using FischerTropsch process at low pressure and high temperature.
Coal gas can also be produced by underground coal gasification where the coal deposits are
located deep in the ground or uneconomical to mine the coal.[72] Synthetic natural gas production
technologies have tremendous scope to meet the SNG requirements of gas-based power stations
fully using the locally available coal (or imported coal in short run). Dankuni coal complex is
producing syngas which is piped to the industrial users in Calcutta.[73] Many coal based fertiliser
plants which are shut down can also be retrofitted economically to produce synthetic natural gas
for bridging natural gas shortages. It is estimated that SNG production cost would be below 6 $
per mmBtu.[74][75] The indigenously produced natural gas by the Exploration & Production (E&P)
contractors sold at prevailing international gas prices do not guarantee the natural gas supply
whereas the SNG produced from coal/ biomass is reliable & dependable fuel supply to the gas
based power stations and other natural gas consumers.
Replacement of old thermal power plants
ndia's coal-fired, oil-fired and natural gas-fired thermal power plants are inefficient and offer
significant potential for greenhouse gas (CO2) emission reduction through better technologies.
India's thermal power plants emit 50% to 120% more CO2 per kWh produced when compared to
the average emissions from their European Union (EU-27) counterparts.[76] The central
government has firmed up plans to shut down 11,000 MW of thermal power generation capacity
that are at least 25 years old and replace with bigger size plants of super-critical pressure
technology totalling to at least 20,000 MW with for an estimated investment of 70,000 crore
(US$10 billion).[77] As part of this plan around 100 old units of capacities ranging between 60
MW to 220 MW will be replaced by around 30 state-of-the-art super-critical units ranging
between 660 MW to 800 MW, thus saving 40,000 crore (US$5.9 billion) on land acquisition as
well infrastructure cost like rail and water linkages along with facilities like ash pond and power
evacuation lines.
Recently few old diesel generator plants and gas turbine plants (Vatwa 100 MW) were also
decommissioned. However their residual life can be used effectively for grid reserve service by
keeping them in working condition and connected to grid.[78]

Hydro power
Main article: Hydroelectric power in India
The hydro-electric power plants at Darjeeling and Shivanasamudram were established in 1898
and 1902 respectively and were among the first in Asia.
India is endowed with economically exploitable and viable hydro potential assessed to be about
84,000 MW at 60% load factor. In addition, 6740 MW in terms of installed capacity from Small,
Mini, and Micro Hydel schemes have been assessed. Also, 56 sites for pumped storage schemes
with an aggregate installed capacity of 94,000 MW have been identified. It is the most widely
used form of renewable energy. India is blessed with immense amount of hydro-electric potential
and ranks 5th in terms of exploitable hydro-potential on global scenario.
The present installed capacity as of 31 May 2014 is approximately 40,661.41 MW which is
16.36% of total electricity generation in India.[79] The public sector has a predominant share of
97% in this sector.[80] National Hydroelectric Power Corporation (NHPC), Northeast Electric
Power Company (NEEPCO), Satluj jal vidyut nigam (SJVNL), Tehri Hydro Development
Corporation, NTPC-Hydro are a few public sector companies engaged in development of
hydroelectric power in India.
Pumped storage schemes are perfect centralised peaking power stations for the load management
in the electricity grid. Pumped storage schemes would be in high demand for meeting peak load
demand and storing the surplus electricity as India graduates from electricity deficit to electricity
surplus. They also produce secondary /seasonal power at no additional cost when rivers are
flooding with excess water. Storing electricity by other alternative systems such as batteries,
compressed air storage systems, etc. is more costlier than electricity production by standby
generator. India has already established nearly 6800 MW pumped storage capacity which is part
of its installed hydro power plants.[81]

Nuclear power
Main article: Nuclear power in India
Kudankulam Nuclear Power Plant (2 x 1000 MW) under construction in 2009.
As of Apr 30, 2016, India had 5.78 GW of installed nuclear electricity generation capacity[82] or
1.91% of total installed electricity generation capacity in India. India's Nuclear plants generated
37,835 million units in year 2014-15.[83]
India's nuclear power plant development began in 1964. India signed an agreement with General
Electric of the United States for the construction and commissioning of two boiling water
reactors at Tarapur. In 1967, this effort was placed under India's Department of Atomic Energy.
In 1971, India set up its first pressurized heavy water reactors with Canadian collaboration in
Rajasthan. In 1987, India created Nuclear Power Corporation of India Limited to commercialize
nuclear power.

Nuclear Power Corporation of India Limited is a public sector enterprise, wholly owned by the
Government of India, under the administrative control of its Department of Atomic Energy. Its
objective is to implement and operate nuclear power stations for India's electricity sector. The
state-owned company has ambitious plans to establish 63 GW generation capacity by 2032, as a
safe, environmentally benign and economically viable source of electrical energy to meet the
increasing electricity needs of India.[84]
India's nuclear power generation effort satisfies many safeguards and oversights, such as getting
ISO-14001 accreditation for environment management system and peer review by World
Association of Nuclear Operators including a pre-start up peer review. Nuclear Power
Corporation of India Limited admits, in its annual report for 2011, that its biggest challenge is to
address the public and policy maker perceptions about the safety of nuclear power, particularly
after the Fukushima incident in Japan.[83]
In 2011, India had 18 pressurized heavy water reactors in operation, with another four projects of
2.8 GW capacity launched. The country plans to implement fast breeder reactors, using
plutonium based fuel. Plutonium is obtained by reprocessing spent fuel of first stage reactors.
India is in the process of launching its first prototype fast breeder reactor of 500 MW capacity in
Tamil Nadu.
India has nuclear power plants operating in the following states: Maharashtra, Gujarat,
Rajasthan, Uttar Pradesh, Tamil Nadu and Karnataka. These reactors have an installed electricity
generation capacity between 100 MW and 540 MW each. KKNPP Unit-1 with a capacity of
1,000 MWe was commissioned in July, 2013 while KKNPP Unit-2, also with a capacity of 1,000
MWe is nearing first approach to criticality in 2016.
In 2011, The Wall Street Journal reported the discovery of uranium in a new mine in India, the
country's largest ever. The estimated reserves of 64,000 tonnes, could be as large as 150,000
tonnes (making the mine one of the world's largest). The new mine is expected to provide India
with a fuel that it now imports. Nuclear fuel supply constraints had limited India's ability to grow
its nuclear power generation capacity. The newly discovered ore, unlike those in Australia, is of
slightly lower grade. This mine is expected to be in operation in 2012.[85]
India's share of nuclear power plant generation capacity is just 1.2% of worldwide nuclear power
production capacity, making it the 15th largest nuclear power producer. India aims to supply 9%
of it electricity needs with nuclear power by 2032.[83] India's largest nuclear power plant project
is planned to be implementedat Jaitapur, Maharashtra in partnership with Areva, France.
India's government is also developing up to 62, mostly thorium reactors, which it expects to be
operational by 2025. It is the "only country in the world with a detailed, funded, governmentapproved plan" to focus on thorium-based nuclear power. The country currently gets under 2% of
its electricity from nuclear power, with the rest coming from coal (60%), hydroelectricity (16%),
other renewable sources (12%) and natural gas (9%). It expects to produce around 25% of its
electricity from nuclear power.[86]

Non-conventional sources

Main article: Renewable energy in India

India's Renewable energy sector is amongst the world's most active players in renewable energy
utilization, especially solar and wind electricity generation.[87] As of June 2016, India had grid
connected installed capacity of about 42.85 GW non-conventional renewable technologies-based
electricity capacity, about 14.15% of its total; exceeding the capacity of hydroelectric power for
the first time in history.[82][88][89][90]
Renewal Energy Installed Capacity in India[1][89] (as of 31 March 2016)
Type
Grid Connected Power
Wind
Solar
Small Hydel Power Projects
Biomass Power & Gasification and Bagasse Cogeneration
Waste to Power
Total - Grid Connected Power
Off-Grid/Captive Power
Biomass (non-bagasse) Cogeneration
SPV Systems (>1 kW)
Waste to Power
Biomass Gasifiers
Water Mills/Micro Hydel
Aerogenerator/Hybrid Systems
Total - Off-Grid/Captive Power

Capacity
(in MW)
26,866.66
6,762.85
4,273.47
4,831.33
115.08
42,849.38
651.91
313.88
160.16
182.39
18.71
2.69
1,329.74

As of August 2011, India had deployed renewal energy to provide electricity in 8846 remote
villages, installed 4.4 million family biogas plants, 1800 microhydel units and 4.7 million square
metres of solar water heating capacity. India plans to add about 30 GW of installed electricity
generation capacity based on renewal energy technologies, by 2017.[91]

Solar power
Main article: Solar power in India
India is endowed with vast solar energy. The solar radiation of about 5,000 trillion kWh per year
is incident over its land mass with average daily solar power potential of 0.25 kWh per m2 of
used land area with the available commercially proven technologies.[92] As of 31 March 2016, the
installed capacity was 6,763 MW.[89] India expects to install an additional 10,000 MW by 2017,
and a total of 100,000 MW by 2022.[93][94][95]

Price history of silicon PV cells since 1977. The great thing about solar power is that it is a
technology and not a fuel. It is unlimited and the more it is deployed the cheaper it would be.[96]
While the more limited fossil fuels are used, the more expensive they become.
Installation of solar power plants require nearly 2.4 hectares (0.024 km2) land per MW capacity
which is similar to coal-fired power plants when life cycle coal mining, consumptive water
storage & ash disposal areas are also accounted and hydro power plants when submergence area
of water reservoir is also accounted. 1.33 million MW capacity solar plants can be installed in
India on its 1% land (32,000 square km). There are vast tracts of land suitable for solar power in
all parts of India exceeding 8% of its total area which are unproductive barren and devoid of
vegetation.[97] Part of waste lands (32,000 square km) when installed with solar power plants can
produce 2,000 billion Kwh of electricity (two times the total generation in the year 2013-14) with
land productivity/yield of 1.5 million (US$22,000) per acre (6 Rs/kwh price) which is at par
with many industrial areas and many times more than the best productive irrigated agriculture
lands. Moreover, these solar power units are not dependent on supply of any raw material and are
self productive. There is unlimited scope for solar electricity to replace all fossil fuel energy
requirements (natural gas, coal, lignite, nuclear fuels and crude oil) if all the marginally
productive lands are occupied by solar power plants in future. The solar power potential of India
can meet perennially to cater per capita energy consumption at par with USA/Japan for the peak
population in its demographic transition.[98]
In the year 2016, the levelized tariff in US$ for solar electricity has fallen below 3 cents/kWh
which is far cheaper than the fuel cost incurred by coal based power plants in India.[99][100]
Canal Solar Power Project in Kadi, Gujarat
Land acquisition is a challenge to solar farm projects in India. Some state governments are
exploring means to address land availability through innovation; for example, by exploring

means to deploy solar capacity above their extensive irrigation canal projects, thereby harvesting
solar energy while reducing the loss of irrigation water by solar evaporation.[101] The state of
Gujarat was first to implement the Canal Solar Power Project, to use 19,000 km (12,000 mi) long
network of Narmada canals across the state for setting up solar panels to generate electricity. It
was the first ever such project in India.
Synergy with irrigation water pumping and hydro power stations
The major disadvantage of solar power (PV type) is that it can not produce electricity during the
night time and cloudy day time also. In India, this disadvantage can be overcome by installing
pumped-storage hydroelectricity stations. Ultimate electricity requirement for river water
pumping (excluding ground water pumping) is 570 billion Kwh to pump one cubic meter of
water for each square meter area by 125 m height on average for irrigating 140 million hectares
of net sown area (42% of total land) for three crops in a year.[102] This is achieved by utilising all
the usable river waters by interlinking Indian rivers.[103] These river water pumping stations
would also be envisaged with pumped-storage hydroelectricity features to generate electricity
during the night time. These pumped-storage stations would work at 200% water pumping
requirement during the day time and generate electricity at 50% of total capacity during the night
time. Also, all existing and future hydro power stations can be expanded with additional pumpedstorage hydroelectricity units to cater night time electricity consumption. Most of the ground
water pumping power can be met directly by solar power.[104]

Wind power
Main article: Wind power in India
India has the fifth largest installed wind power capacity in the world. In the year 2015-16, wind
power accounted for 8.5% of India's total installed power capacity, and 2.5% of the country's
power output. India targets to install an additional 60 GW of wind power capacity by 2022[95]
The development of wind power in India began in the 1990s by Tamil Nadu Electric Board near
Tuticorin, and has significantly increased in the last decade. As of 31 March 2016, the installed
capacity of wind power was 26.74 GW, spread across many states of India.[89] The largest wind
power generating state is Tamil Nadu accounting for nearly 30% of installed capacity, followed
in decreasing order by Maharashtra, Gujarat, Rajasthan and Karnataka.[105]

Biomass power
In this system biomass, bagasse, forestry, domestic organic wastes, industrial organic wastes and
agro residue & agricultural wastes are used as fuel to produce electricity.[106] Nearly 750 million
tons of non edible (by cattle) biomass is available annually in India which can be put to use for
higher value addition.[107]
Torrefied biomass

Huge quantity of imported coal is being used in pulverised coal-fired power stations. Raw
biomass can not be used in the pulverised coal mills as they are difficult to grind into fine
powder due to caking problem of raw biomass. However 100% biomass can be fired after
Torrefaction in the pulverised coal mills for replacing imported coal.[108] Cofiring dry biomass up
to 20% heat input with coal is possible directly in pulverised coal-fired power stations without
facing caking problem.[109] North west and southern regions can replace imported coal use with
biomass where surplus agriculture/crop residue biomass is burnt in the fields causing pollution
problems.
Biomass gasifier
India has been promoting biomass gasifier technologies in its rural areas, to utilise surplus
biomass resources such as rice husk, crop stalks, small wood chips, other agro-residues. The goal
was to produce electricity for villages with power plants of up to 2 MW capacities. During 2011,
India installed 25 rice husk based gasifier systems for distributed power generation in 70 remote
villages of Bihar. The largest biomass-based power plant in India is at Sirohi, Rajasthan, having
the capacity of 20 MW, i.e., Sambhav Energy Limited. In addition, gasifier systems are being
installed at 60 rice mills in India. During the year, biomass gasifier projects of 1.20 MW in
Gujarat and 0.5 MW in Tamil Nadu were successfully installed.[91]
Biogas
This pilot programme aims to install small-scale biogas plants for meeting the cooking energy
needs in rural areas of India. During 2011, some 45000 small-scale biogas plants were installed.
Cumulatively, India has installed 4.44 million small-scale biogas plants.
In 2011, India started a new initiative with the aim to demonstrate medium size mixed feed
biogas-fertiliser pilot plants. This technology aims for generation, purification/enrichment,
bottling and piped distribution of biogas. India approved 21 of these projects with aggregate
capacity of 37016 cubic metre per day, of which 2 projects have been successfully commissioned
by December 2011.[91]
India has additionally commissioned 158 projects under its Biogas based Distributed/Grid Power
Generation programme, with a total installed capacity of about 2 MW.
India is rich in biomass and has a potential of 16,881 MW (agro-residues and plantations), 5000
MW (bagasse cogeneration) and 2700 MW (energy recovery from waste). Biomass power
generation in India is an industry that attracts investments of over INR 6 billion every year,
generating more than 5000 million units of electricity and yearly employment of more than 10
million man-days in the rural areas.[citation needed]
As of 2010, India burnt over 200 million tonnes of coal replacement worth of traditional biomass
fuel every year to meet its energy need for cooking and other domestic use. This traditional
biomass fuel fuelwood, crop waste and animal dung is a potential raw material for the
application of biomass technologies for the recovery of cleaner fuel, fertilisers and electricity
with significantly lower pollution.

Biomass available in India can and has been playing an important role as fuel for sugar mills,
textiles, paper mills, and small and medium enterprises (SME). In particular there is a significant
potential in breweries, textile mills, fertiliser plants, the paper and pulp industry, solvent
extraction units, rice mills, petrochemical plants and other industries to harness biomass power.
[110]

Geothermal energy
Geothermal energy is thermal energy generated and stored in the Earth. Thermal energy is the
energy that determines the temperature of matter. India's geothermal energy installed capacity is
experimental. Commercial use is insignificant.
According to some ambitious estimates, India has 10,600 MW of potential in the geothermal
provinces but it still needs to be exploited.[111] India has potential resources to harvest geothermal
energy. The resource map for India has been grouped into six geothermal provinces:[112]

Himalayan Province Tertiary Orogenic belt with Tertiary magmatism

Areas of Faulted blocks Aravalli belt, Naga-Lushi, West coast regions and SonNarmada lineament.

Volcanic arc Andaman and Nicobar arc.

Deep sedimentary basin of Tertiary age such as Cambay basin in Gujarat.

Radioactive Province Surajkund, Hazaribagh, Jharkhand.

Cratonic province Peninsular India

India has about 340 hot springs spread over the country. Of this, 62 are distributed along the
northwest Himalaya, in the States of Jammu and Kashmir, Himachal Pradesh and Uttarakhand.
They are found concentrated along a 30-50-km wide thermal band mostly along the river valleys.
Naga-Lusai and West Coast Provinces manifest a series of thermal springs. Andaman and
Nicobar arc is the only place in India where volcanic activity, a continuation of the Indonesian
geothermal fields, and can be good potential sites for geothermal energy. Cambay graben
geothermal belt is 200 km long and 50 km wide with Tertiary sediments. Thermal springs have
been reported from the belt although they are not of very high temperature and discharge. During
oil and gas drilling in this area, in recent times, high subsurface temperature and thermal fluid
have been reported in deep drill wells in depth ranges of 1.7 to 1.9 km. Steam blowout have also
been reported in the drill holes in depth range of 1.5 to 3.4 km. The thermal springs in India's
peninsular region are more related to the faults, which allow down circulation of meteoric water
to considerable depths. The circulating water acquires heat from the normal thermal gradient in
the area, and depending upon local condition, emerges out at suitable localities. The area
includes Aravalli range, Son-Narmada-Tapti lineament, Godavari and Mahanadi valleys and
South Cratonic Belts.[112]

In a December 2011 report, India identified six most promising geothermal sites for the
development of geothermal energy. These are, in decreasing order of potential:

Tattapani in Chhattisgarh

Puga in Jammu & Kashmir

Cambay Graben in Gujarat

Manikaran in Himachal Pradesh

Surajkund in Jharkhand

Chhumathang in Jammu & Kashmir

India plans to set up its first geothermal power plant, with 25 MW capacity at Puga in Jammu
and Kashmir.[113]

Tidal wave energy

Tidal energy technologies harvest energy from the seas. The potential of tidal wave energy
becomes higher in certain regions by local effects such as shelving, funnelling, reflection and
resonance.
India is surrounded by sea on three sides, its potential to harness tidal energy is significant.
Energy can be extracted from tides in several ways. In one method, a reservoir is created behind
a barrage and then tidal waters pass through turbines in the barrage to generate electricity. This
method requires mean tidal differences greater than 4 metres and also favourable topographical
conditions to keep installation costs low. One report claims the most attractive locations in India,
for the barrage technology, are the Gulf of Khambhat and the Gulf of Kutch on India's west coast
where the maximum tidal range is 11 m and 8 m with average tidal range of 6.77 m and 5.23 m
respectively. The Ganges Delta in the Sunderbans, West Bengal is another possibility, although
with significantly less recoverable energy; the maximum tidal range in Sunderbans is
approximately 5 m with an average tidal range of 2.97 m. The report claims, barrage technology
could harvest about 8 GW from tidal energy in India, mostly in Gujarat. The barrage approach
has several disadvantages, one being the effect of any badly engineered barrage on the migratory
fishes, marine ecosystem and aquatic life. Integrated barrage technology plants can be expensive
to build.
In December 2011, the Ministry of New & Renewable Energy, Government of India and the
Renewable Energy Development Agency of Govt. of West Bengal jointly approved and agreed to
implement India's first 3.75 MW Durgaduani mini tidal power project. Indian government
believes that tidal energy may be an attractive solution to meet the local energy demands of this
remote delta region.[113]

Another tidal wave technology harvests energy from surface waves or from pressure fluctuations
below the sea surface. A report from the Ocean Engineering Centre, Indian Institute of
Technology, Madras estimates the annual wave energy potential along the Indian coast is
between 5 MW to 15 MW per metre, suggesting a theoretical maximum potential for electricity
harvesting from India's 7500 kilometre coast line may be about 40 GW. However, the realistic
economical potential, the report claims, is likely to be considerably less.[114] A significant barrier
to surface energy harvesting is the interference of its equipment to fishing and other sea bound
vessels, particularly in unsettled weather. India built its first seas surface energy harvesting
technology demonstration plant in Vizhinjam, near Thiruruvananthpuram.
The third approach to harvesting tidal energy consists of ocean thermal energy technology. This
approach tries to harvest the solar energy trapped in ocean waters into usable energy. Oceans
have a thermal gradient, the surface being much warmer than deeper levels of ocean. This
thermal gradient may be harvested using modified Rankine cycle. India's National Institute of
Ocean Technology (NIOT) attempted this approach over the last 20 years, but without success.
In 2003, with Saga University of Japan, NIOT attempted to build and deploy a 1 MW
demonstration plant.[115] However, mechanical problems prevented success. After initial tests near
Kerala, the unit was scheduled for redeployment and further development in the Lakshadweep
Islands in 2005. The demonstration project's experience have limited follow-on efforts with
ocean thermal energy technology in India.

Electricity transmission and distribution

Installed transmission (circuit km) and distribution capacity (MVA) up to end of March 2015
Substations [116]
Transmission lines [117]
Capacity
c.km / MVA ratio#
(MVA)
(c.km)
500 kV HVDC
13,500
9,432
0.699
765 kV
121,500
18,644
0.153
400 kV
192,422
135,949
0.707
200 kV
268,678
149,412
0.556
#

the ratio to be multiplied with transmission line capacity (MVA) to give average installed length
of transmission line per one MVA of installed substation capacity at each voltage level.
The spread of high voltage transmission lines is such that it can form a square matrix of area 416
km2 (i.e. on average, at least one HV line within 10.2 km distance/vicinity) in entire area of the
country. The length of high-voltage transmission lines is nearly equal to that of the USA
(322,000 km (200,000 mi) of 230 kV and above) but transmits far less electricity.[118] The HV
transmission lines (132 kV and above) installed in the country is nearly 700,000 km
(430,000 mi) (i.e. on average, at least one 13 kV transmission line within 4.5 km distance).[119]
The length of transmission lines (400 V and above and excluding 220 V lines) is 10,558,177 km
(6,560,547 mi) as on 31 March 2015 in the country.[3] The spread of total transmission lines
(400 V) is such that it can form a square matrix of area 36.8 km2 (i.e. on average, at least one
transmission line within 3 km distance) in entire area of the country.

The all-time maximum peak load is not exceeding 153,515 MW in the unified grid whereas the
all-time peak load met is 148,005 MW on 11 September 2015.[120] The maximum achieved
demand factor of substations is not exceeding 60% at 200 kV level. The operational performance
of the huge capacity substations and the vast network of high voltage transmission lines with low
demand factor is not satisfactory in meeting the peak electricity load.[121] Detailed forensic
engineering studies are to be undertaken and system inadequacies rectified to evolve into smart
grid for maximising utility of the existing transmission infrastructure with optimum future capital
investments.[29]
The July 2012 blackout, affecting the north of the country, was the largest power grid failure in
history by number of people affected. The introduction of Availability Based Tariff (ABT) has
brought about stability to a great extent in the Indian transmission grids. However, presently it is
becoming outdated in a power surplus grid.
India's Aggregate Transmission and Commercial (ATC) losses is 27% in 2011-12.[122][123] Whereas
the total ATC loss was only 9.43% out of the 4,113 billion kWh electricity supplied in USA
during the year 2013. The Government has pegged the national ATC losses at around 24% for the
year 2011 & has set a target of reducing them to 17.1% by 2017 & to 14.1% by 2022. A high
proportion of non-technical losses are caused by illegal tapping of lines, and faulty electric
meters that underestimate actual consumption also contribute to reduced payment collection. A
case study in Kerala estimated that replacing faulty meters could reduce distribution losses from
34% to 29%.[37]

Problems with India's power sector

India's electricity sector faces many issues. Some are:[42][124][125][126]

Inadequate last mile connectivity is the main problem to supply electricity for all users.
The country already has adequate generation and transmission capacity to meet the full
demand temporally and spatially.[3] However, due to lack of last-mile link-up with all
electricity consumers and reliable power supply (to exceed 99%), many consumers
depend on DG sets using costly diesel oil for meeting unavoidable power requirements.[29]
Also more than 10 million households are using battery storage UPS as back-up in case
of load shedding.[127] India imports nearly US$2 billion worth of battery storage UPS
every year. The distribution companies should focus on providing uninterrupted power
supply to all the consumers who are using costly DG set's power. This should be achieved
by laying separate buried power cables (not to be effected by rain and winds) for
emergency power supply in addition to the normal supply lines. Emergency supply power
line shall supply power when the normal power supply line is not working. Emergency
power supply would be charged at higher price without any subsidy but less than the
generation cost from diesel oil. Nearly 80 billion KWh electricity is generated annually in
India by DG sets which are consuming nearly 15 million tons of diesel oil.

Demand build up measures can be initiated to consume the cheaper electricity (average
price Rs 2.5 per kWhr) available from the grid instead of running the coal/gas/oil fired
captive power plants in various electricity intensive industries.[128][129] The captive power

generation capacity by coal/gas/oil fired plants is nearly 47,000 MW mainly established

in steel, fertiliser, aluminium, cement, etc. industries.[3] These bulk captive electricity
producers can draw cheaper electricity from the grid on short term open access (STOA)
basis and avoid the costly imported coal/RLNG/natural gas or utilise these fuels for
process purposes instead of electricity generation.[130] Some of these idling captive power
plants can be used for grid reserve service for earning extra revenue.[131] At present
substantial diesel oil is consumed by railways for rail traffic on its non electrified rail
lines. To eliminate the substantial cost of imported diesel fuel, power ministry is
envisaging to fund the electrification of these lines and achieve additional power demand
of 7 billion units.[132]

No access to electricity: Over 300 million people in India or 60 million households have
no access to electricity.[21] Of those who do, almost all find electricity supply intermittent
and unreliable.[133] However, many of the power stations are idling for lack of electricity
demand. The idling generation capacity can supply three times the domestic electricity
needs (nearly 80 billion KWh) of the people who do not have access to electricity.

A system of cross-subsidization is practiced based on the principle of 'the consumer's

ability to pay'. In general, the industrial and commercial consumers subsidize the
domestic and agricultural consumers.[134][135] Further, Government giveaways such as free
electricity for farmers, partly to curry political favor, have depleted the cash reserves of
state-run electricity-distribution system and led them to amassing a debt of 2.5 trillion
(US$37 billion).[136] This has financially crippled the distribution network, and its ability
to pay for purchasing power to meet the demand in the absence of subsidy reimbursement
from state governments.[137] This situation has been worsened by state government
departments that do not pay their electricity bills.

Name plate/declared capacity of the many coal fired plants owned by IPPs are
overrated above the actual maximum continuous rating (MCR) capacity.[138] The reason
for overrating the capacity is to over-invoice the plant cost.[139] These plants operate 15 to
10% below their declared capacity on daily basis and operate rarely at declared capacity.
Thus these units are not effectively contributing to the on line spinning reserves to
maintain power system / grid stabilization. This is also due to reason that point of
connection charges are levied in India based on energy exported instead of MCR capacity
as applicable for national grid in UK.

Intra day load and demand graphs are not made in India at every 15 minutes or less
intervals to understand power grid nature and its short comings with respect to grid
frequency. These graphs should be plotted with comprehensive data collected from
SCADA / on line for all grid connected generating stations ( 100 KW) and load data
from all substations to impart authenticity to the data presented.[140] Comprehensive list of
grid connected power stations along with declared capacity shall be prepared by
CEA/POSOCO for all types of power plants (including wind, solar, biomass, cogeneration, etc.) and update the data on weekly basis.

Coal supply: Despite abundant reserves of coal, the country isn't producing enough to
feed its power plants. India's monopoly coal producer, state-controlled Coal India, is
constrained by primitive mining techniques and is rife with theft and corruption. Poor
coal transport infrastructure has worsened these problems. To expand its coal production
capacity, Coal India needs to mine new deposits. However, most of India's coal lies under
protected forests or designated tribal lands. Any mining activity or land acquisition for
infrastructure in these coal-rich areas of India, has been rife with political demonstrations,
social activism and public interest litigations. By the end of year 2015, the international
coal prices have dropped to US$42.55 per ton which is below the local coal producers
sale price. This situation is transforming coastal power station's generation cheaper than
pit head power station's generation when electricity is made available to major load
centers.[17] Being massive consumer of local and imported coal, India should end the Coal
India's coal pricing monopoly and implement coal trading in commodities stock exchange
to arrive at market determined coal price on daily basis. This is possible by devising
standard coal grades / trading instruments and identifying coal supply hubs in central
India, eastern India, west coast and east coast to facilitate trading in imported and local
coal.[18]

Poor pipeline connectivity and infrastructure to harness India's abundant coal bed
methane and natural gas potential. The giant new offshore natural gas field has delivered
far less gas than claimed causing shortage of natural gas.

Average transmission, distribution and consumer-level losses exceeding 30% which

includes auxiliary power consumption of thermal power stations, fictitious electricity
generation by wind generators & independent power producers (IPPs), etc.

The residential building sector is one of the largest consumers of electricity in India.
Continuous urbanization and the growth of population result in increasing power
consumption in buildings. Thus, while experts express the huge potential for energy
conservation in this sector, the belief still predominates among stakeholders that energyefficient buildings are more expensive than conventional buildings, which adversely
affects the greening of the building sector.[141]

Key implementation challenges for India's electricity sector include new project
management and execution, ensuring availability of fuel quantities and qualities, lack of
initiative to develop large coal and natural gas resources available in India, land
acquisition, environmental clearances at state and central government level, and training
of skilled manpower to prevent talent shortages for operating latest technology plants.[142]

Hydroelectric power projects in India's mountainous north and north east regions have
been slowed down by ecological, environmental and rehabilitation controversies, coupled
with public interest litigations.

Theft of power: In India, financial loss due to theft of electricity may be around $16
billion yearly. Populist pro-free power measures also bleed the power companies. Some

power companies continue to bleed and lead to bankruptcy due to one of these factors.
This also lead to pay more by legal users. This creates a scenario where villages have
huge cut of power and simultaneously availability of power in the grid with no purchase
by DISCOMs.

Losses in the connector systems/service connections leading to premature failure of

capital equipments like transformers

India's nuclear power generation potential has been stymied by political activism since
the Fukushima disaster. The track record of executing nuclear power plants is also very
poor in India[143]

Lack of clean and reliable energy sources such as electricity is, in part, causing about
800 million people in India to continue using traditional biomass energy sources
namely fuel wood, agricultural waste and livestock dung for cooking and other
domestic needs.[39] Traditional fuel combustion is the primary source of indoor air
pollution in India, causes between 300,000 and 400,000 deaths per year and other chronic
health issues.

Resource potential in electricity sector

According to Oil and Gas Journal, India had approximately 38 trillion cubic feet (Tcf) of proven
natural gas reserves as of January 2011, world's 26th largest. United States Energy Information
Administration estimates that India produced approximately 1.8 Tcf of natural gas in 2010, while
consuming roughly 2.3 Tcf of natural gas. The electrical power and fertiliser sectors account for
nearly three-quarters of natural gas consumption in India. Natural gas is expected to be an
increasingly important component of energy consumption as the country pursues energy resource
diversification and overall energy security.[144][145]
Until 2008, the majority of India's natural gas production came from the Mumbai High complex
in the northwest part of the country. Recent discoveries in the Bay of Bengal have shifted the
centre of gravity of Indian natural gas production.
The country already produces some coalbed methane and has major potential to expand this
source of cleaner fuel. According to a 2011 Oil and Gas Journal report, India is estimated to have
between 600 and 2000 Tcf of shale gas resources (one of the world's largest). Despite its natural
resource potential, and an opportunity to create energy industry jobs, India has yet to hold a
licensing round for its shale gas blocks. It is not even mentioned in India's central government
energy infrastructure or electricity generation plan documents through 2025. The traditional
natural gas reserves too have been very slow to develop in India because regulatory burdens and
bureaucratic red tape severely limit the country's ability to harness its natural gas resources.[76][124]
[146]

Electricity trading with neighbour countries

Despite low electricity per capita consumption in India, the country is going to achieve surplus
electricity generation during the 12th plan (2012 to 2017) period provided its coal production and
transport infrastructure is developed adequately.[147][148][149] India has been exporting electricity to
Bangladesh and Nepal and importing excess electricity from Bhutan.[150][151] Surplus electricity
can be exported to the neighboring countries in return for natural gas supplies from Pakistan,
Bangladesh and Myanmar.
Bangladesh, Myanmar and Pakistan are producing substantial natural gas and using for
electricity generation purpose. Bangladesh, Myanmar and Pakistan produce 55 million cubic
metres per day (mcmd), 9 mcmd and 118 mcmd out of which 20 mcmd, 1.4 mcmd and 34 mcmd
are consumed for electricity generation respectively.[152][153] Whereas the natural gas production in
India is not even adequate to meet its non-electricity requirements.
Bangladesh, Myanmar and Pakistan have proven reserves of 184 billion cubic metres (bcm), 283
bcm and 754 bcm respectively. There is ample opportunity for mutually beneficial trading in
energy resources with these countries.[154] India can supply its surplus electricity to Pakistan and
Bangladesh in return for the natural gas imports by gas pipe lines. Similarly India can develop on
BOOT basis hydro power projects in Bhutan, Nepal and Myanmar. India can also enter into long
term power purchase agreements with China for developing the hydro power potential in
Brahmaputra river basin of Tibet region. India can also supply its surplus electricity to Sri Lanka
by undersea cable link. There is ample trading synergy for India with its neighbouring countries
in securing its energy requirements.

Electricity as substitute to imported LPG and kerosene

The net import of liquefied petroleum gas (LPG) is 6.093 million tons and the domestic
consumption is 13.568 million tons with Rs. 41,546 crores subsidy to the domestic consumers in
the year 2012-13.[155] The LPG import content is nearly 40% of total consumption in India. The
affordable electricity retail tariff (860 Kcal/Kwh at 90% heating efficiency) to replace LPG
(lower heating value 11,000 Kcal/Kg at 75% heating efficiency) in domestic cooking is 6.47
Rs/Kwh when the retail price of LPG cylinder is Rs 1000 (without subsidy) with 14.2 kg LPG
content. Replacing LPG consumption with electricity reduces its imports substantially.
The domestic consumption of kerosene is 7.349 million tons with Rs. 30,151 crores subsidy to
the domestic consumers in the year 2012-13. The subsidised retail price of kerosene is 13.69
Rs/litre whereas the export/import price is 48.00 Rs/litre. The affordable electricity retail tariff
(860 Kcal/Kwh at 90% heating efficiency) to replace kerosene (lower heating value 8240
Kcal/litre at 75% heating efficiency) in domestic cooking is 6.00 Rs/Kwh when Kerosene retail
price is 48 Rs/litre (without subsidy).
In the year 2014-15, the plant load factor (PLF) of coal-fired thermal power stations is only
64.46% whereas these stations can run above 85% PLF comfortably provided there is adequate
electricity demand in the country.[156] The additional electricity generation at 85% PLF is nearly
240 billion units which is adequate to replace all the LPG and kerosene consumption in domestic
sector.[157] The incremental cost of generating additional electricity is only their coal fuel cost
which is less than 3 Rs/Kwh. Enhancing the PLF of coal-fired stations and encouraging domestic

electricity consumers to substitute electricity in place of LPG and kerosene in household

cooking, would reduce the government subsidies and idle capacity of thermal power stations can
be put to use economically. The domestic consumers who are willing to surrender the subsidised
LPG/kerosene permits or eligible for subsidized LPG/kerosene permits, may be given free
electricity connection and subsidised electricity tariff.[133]
During the year 2014, IPPs are offering to sell solar power below 5.50 Rs/Kwh to feed into the
high voltage grid.[158][159] This price is close to affordable electricity tariff for the solar power to
replace LPG and Kerosene use (after including subsidy on LPG & Kerosene) in domestic sector.

Electricity driven vehicles

The retail prices of petrol and diesel are high in India to make electricity driven vehicles more
economical as more and more electricity is generated from solar energy in near future without
appreciable environmental effects. The retail price of diesel is 53.00 Rs/litre in the year 2012-13.
The affordable electricity retail price (860 Kcal/Kwh at 75% input electricity to shaft power
efficiency) to replace diesel (lower heating value 8572 Kcal/litre at 40% fuel energy to crank
shaft power efficiency) is 9.97 Rs/Kwh. The retail price of petrol is 75.00 Rs/litre in the year
2012-13. The affordable electricity retail price (860 Kcal/Kwh at 75% input electricity to shaft
power efficiency) to replace petrol (lower heating value 7693 Kcal/litre at 33% fuel energy to
crank shaft power efficiency) is 19.06 Rs/Kwh. In the year 2012-13, India consumed 15.744
million tons petrol and 69.179 millon tons diesel which are mainly produced from imported
crude oil at huge foreign exchange out go.[155]
Electricity driven vehicles would become popular in future when its energy storage/battery
technology becomes more long lasting and maintenance free.[160] V2G is also feasible with
electricity driven vehicles to contribute for catering to the peak load in the electricity grid.
Electricity driven vehicles can also be continuously charged with Wireless Electricity
Transmission (WET) technology which transmits electricity over 5 km distance without wires to
charge devices (mobile and stationary) between the range of 3-12 volts under any weather
conditions.[161]

Human resource development

Rapid growth of electricity sector in India demands that talent and trained personnel become
available as India's new installed capacity adds new jobs. India has initiated the process to
rapidly expand energy education in the country, to enable the existing educational institutions to
introduce courses related to energy capacity addition, production, operations and maintenance, in
their regular curriculum. This initiative includes conventional and renewal energy.
A Ministry of Renewal and New Energy announcement claims State Renewable Energy
Agencies are being supported to organise short-term training programmes for installation,
operation and maintenance and repair of renewable energy systems in such places where
intensive RE programme are being implemented. Renewable Energy Chairs have been
established in IIT Roorkee and IIT Kharagpur.[91]

Education and availability of skilled workers is expected to be a key challenge in India's effort to
rapidly expand its electricity sector.

Regulation and administration

The Ministry of Power is India's apex central government body regulating the electrical energy
sector in India. This ministry was created on 2 July 1992. It is responsible for planning, policy
formulation, processing of projects for investment decisions, monitoring project implementation,
training and manpower development, and the administration and enactment of legislation in
regard to thermal, hydro power generation, transmission and distribution. It is also responsible
for the administration of India's Electricity Act (2003), the Energy Conservation Act (2001) and
to undertake such amendments to these Acts, as and when necessary, in conformity with the
Indian government's policy objectives.[162]
Electricity is a concurrent list subject at Entry 38 in List III of the seventh Schedule of the
Constitution of India. In India's federal governance structure, this means that both the central
government and India's state governments are involved in establishing policy and laws for its
electricity sector. This principle motivates central government of India and individual state
governments to enter into memorandum of understanding to help expedite projects and reform
electricity sector in respective state.[163]

Trading
Bulk power purchasers can buy electricity on daily basis for short, medium and long term
duration from reverse e-auction facility.[164] The electricity prices transacted under reverse eauction facility are far less than the prices agreed under bilateral agreements.[165] Multi
Commodity Exchange has sought permission to offer electricity future markets in India.[166]

Government-owned power companies

India's Ministry of Power administers central government owned companies involved in the
generation of electricity in India. These include National Thermal Power Corporation, Damodar
Valley Corporation, National Hydroelectric Power Corporation and Nuclear Power Corporation
of India. The Power Grid Corporation of India is also administered by the Ministry; it is
responsible for the inter-state transmission of electricity and the development of national grid.
The Ministry works with various state governments in matters related to state government owned
corporations in India's electricity sector. Examples of state corporations include Telangana Power
Generation Corporation, Andhra Pradesh Power Generation Corporation Limited, Assam Power
Generation Corporation Limited, Tamil Nadu Electricity Board, Maharashtra State Electricity
Board, Kerala State Electricity Board, and Gujarat Urja Vikas Nigam Limited.[1]

Funding of power infrastructure

India's Ministry of Power administers Rural Electrification Corporation Limited and Power
Finance Corporation Limited. These central government owned public sector enterprises provide
loans and guarantees for public and private electricity sector infrastructure projects in India.

Borrowing by state owned discoms

Borrowings by state owned discoms & Commercial losses of discoms

The accumulated losses of state-owned discoms (without subsidies) rose from Rs 11,699
crore in 2004-05 to Rs 71,271 crore in 2013-14. These losses have resulted in state
discoms relying more on short-term loans to fund their operations. Borrowings by state
discoms rose from Rs 1,58,003 crore in 2007-08 to Rs 5,45,922 crore in 2013-14 (CAGR
23%).

Consequently, the interest cost on these loans worsens the poor finances of state discoms.
Poor finances of the discoms affect their ability to buy power, thus leading to power
deficits.

Budgetary support
After the enactment of Electricity Act 2003 budgetary support to power sector is negligible.[167]
State Electricity Boards get initial financial help from Central Government in the event of their
unbundling.

See also

Energy policy of
India
Availability-based
tariff

Levelised energy cost

Solar power

Energy returned on
energy invested

Torrefaction

Global electricity
prices

Grid parity

Economics of
new nuclear
power plants

Net metering

Negawatt
power

Demand
response

Energy
cannibalism

Spark spread

Electricity

Energy
portal

Coal slurry pipeline

40,000 MW Yarlung
Tsangpo
Hydroelectric Project

Reliance east west

gas pipeline

Central
Electricity
Authority of
India

Wind Turbine

List of power
stations in India

market

Indian Rivers
Inter-link

Index of solar
energy articles

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"Reverse e-auction lowering power prices. Ind-Ra". Retrieved 26 May 2016.
"MCX move to launch electricity future faces legal hurdle". The Financial Express.

1.

Ignatius Pereira. "'No proposal to bring down power price'". The Hindu.
Retrieved 29 July 2015.

External links

- Latest news about Indian Power Sector at one place

National electricity Plan - 2012, CEA, GoI

Electricity grid maps of southern region

Macro Patterns in the Use of Traditional Biomass Fuels A Stanford/TERI report on

energy sector and human history

India's Energy Policy and Electricity Production

Power generation has grown rapidly

[http://www.ibef.org/industry/power-sector-india.aspx]
Electricity production in India stood at 1,048.7 BU in FY15, a 8.4 per cent growth over the
previous fiscal.
Over FY1015, electricity production expanded at a CAGR of 6.3 per cent.
Electricity production in India reached 654.5 BU during April -October 2015.
According to the Planning Commissions 12th Five Year Plan, total domestic energy production
would reach 669.6 million tonnes of oil equivalent (MTOE) by 201617 and 844 MTOE by
202122.

Introduction
Power is one of the most critical components of infrastructure crucial for the economic growth
and welfare of nations. The existence and development of adequate infrastructure is essential for
sustained growth of the Indian economy.
Indias power sector is one of the most diversified in the world. Sources of power generation
range from conventional sources 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.
Electricity demand in the country has increased rapidly and is expected to rise further in the
years to come. In order to meet the increasing demand for electricity in the country, massive
addition to the installed generating capacity is required.
India ranks third, just behind US and China, among 40 countries# with renewable energy focus,
on back of strong focus by the government on promoting renewable energy and implementation
of projects in a time bound manner.
Market Size
Indian power sector is undergoing a significant change that has redefined the industry outlook.
Sustained economic growth continues to drive electricity demand in India. The Government of
Indias focus on attaining Power for all has accelerated capacity addition in the country. At the
same time, the competitive intensity is increasing at both the market and supply sides (fuel,
logistics, finances, and manpower).

Total capacity of renewable energy plants in India stood at 42,850 megawatts as on April 30,
2016, thereby surpassing the 42,783 megawatts capacity of large hydroelectricity projects in the
country.$ Cumulative solar installations in India crossed the 7.5 gigawatt (GW) mark in May
2016, about 2.2 GW more than all of the solar installations in 2015.%
The Planning Commissions 12th Five-Year Plan estimates total domestic energy production to
reach 669.6 Million Tonnes of Oil Equivalent (MTOE) by 201617 and 844 MTOE by 202122.
As of January 2016, total thermal installed capacity stood at 200.74 Gigawatt (GW), while hydro
(renewable) energy installed capacity totaled 42.66 GW. At 5.78 GW, nuclear energy capacity
remained broadly constant compared with the previous year.India's rooftop solar capacity
addition grew 66 per cent from last year to reach 525 Mega Watts (MW), and has the potential to
grow up to 6.5 Giga watts (GW)!. Indias wind power capacity, installed in FY2016, is estimated
to increase 20 per cent over last year to 2,800 Mega Watt (MW)@, led by favourable policy
support that has encouraged both independent power producers (IPP) and non-IPPs. India is
expected to add nearly 4,000 Megawatts (MW)## of solar power in 2016, nearly twice the
addition of 2,133 MW in 2015.
Indias wind energy market is expected to attract investments totaling Rs 1,00,000 crore (US$
14.82 billion) by 2020, and wind power capacity is estimated to almost double by 2020 from
over 23,000 MW in June 2015, with an addition of about 4,000 MW per annum in the next five
years.
Investment Scenario
Around 293 global and domestic companies have committed to generate 266 GW of solar, wind,
mini-hydel and biomass-based power in India over the next 510 years. The initiative would
entail an investment of about US$ 310350 billion.
Between April 2000 and March 2016, the industry attracted US$ 10.48 billion in Foreign Direct
Investment (FDI).
Some major investments and developments in the Indian power sector are as follows:

The State Bank of India (SBI) has signed an agreement with The World Bank for Rs
4,200 crore (US$ 625 million) credit facility, aimed at financing Grid Connected Rooftop
Solar Photovoltaic (GRPV) projects in India.

The World Bank Group has committed to provide US$ 1 billion for Indias solar energy
projects and plans to work with other multilateral development banks and financial
institutions to develop financing instruments to support future solar energy development
in the country.

The Ministry of New and Renewable Energy (MNRE) has signed an agreement with
Germany-based KfW Development Bank to fund the Rs 300 crore (US$ 44.47 million)
floating solar projects in Maharashtra and Kerala, which is expected to generate over 310
GW of green energy.

CLP India, one of the largest foreign investors in Indias power sector, has acquired a 49
per cent stake in SE Solar, a Special Purpose Vehicle (SPV) set-up by Suzlon Group for
building a 100 MW solar energy plant at Veltoor in Telangana, for Rs 73.5 crore (US$
10.9 million).

The Ministry of New and Renewable Energy (MNRE) plans to launch an integrated bio
energy mission with an investment of Rs 10,000 crore (US$ 1.48 billion) from FY 201718 to FY 2021-22, aimed at enhancing the use of bio-fuels like ethanol and biogas and
reducing consumption of fossil fuels.

The worlds largest single rooftop solar power plant of 11.5 MW capacity spread across
42 acres was inaugurated in Beas Dera campus in Amritsar, which is expected to generate
power for approximately 8,000 homes.

Canada's second largest pension fund, Caisse de depot et placement du Quebec (CDPQ),
has set up its office in India and committed to invest US$ 150 million in the Indian
renewable energy sector over the next three to four years.

Suzlon Energy Ltd, one of Indias leading wind turbine maker, plans to set up 3,000
Mega Watt (MW) power generation units of solar, wind and hybrid sources in Telangana,
with an investment of Rs 1,200 crore (US$ 178 million).

India Power Corporation, one of the power generation companies in India, plans to
expand its thermal power capacity by acquiring stake in Meenakshi Energy from French
major Engie which has 89.11 per cent stake in the target company.

Sembcorp Industries have launched a 2,640 Mega Watt (MW) SembcorpGayatri power
complex worth US$ 3 billion in Nellore, Andhra Pradesh which is the largest Foreign
Direct Investment (FDI)driven project on a single site in the thermal power industry in
India.

Ostro Energy Private Limited, a renewable energy platform backed by private equity (PE)
firm Actis, plans to invest US$ 425 million in projects in Andhra Pradesh, including two
wind farms with a total capacity of 197.4 Mega Watt (MW).

SunEdison, worlds largest renewable energy company, plans to continue its focus on
Make in India by further reducing the cost of renewable energy and developing over 15
gigawatts (GW) of wind and solar projects in the country by 2022.

ThyssenKrupp India, the Indian arm of the German engineering conglomerate, plans to
make high-grade environment-friendly boilers which use less fuel, for the Indian power
sector by collaborating with a foreign company.

Aditya Birla Group has announced a partnership with the Abraaj Group, a leading
investor in global growth markets, to build a large-scale renewable energy platform that
will develop utility-scale solar power plants in India.

Sterlite Grid, Indias largest private operator of transmission systems, is joining hands
with US major Burn & McDonnell for its Rs 3,000 crore (US$ 444.72 million) power
transmission project in the Kashmir valley.

Inox Wind Ltd, a subsidiary of Gujarat Fluorochemicals, a wind energy solutions

provider, plans to double its manufacturing capacity to 1,600 MW at a total investment of
Rs 200 crore (US$ 29.65 million) by the end of the next financial year.

The Dilip Shanghvi family, founders of Sun Pharma, acquired 23 per cent stake in Suzlon
Energy, with a preferential issue of fresh equity for Rs 1,800 crore (US$ 266.83 million).

Reliance Power Ltd signed an accord with the Government of Rajasthan for developing
6,000 MW of solar power projects in the state over the next 10 years.

Hilliard Energy plans to invest Rs 3,600 crore (US$ 533.66 million) in Ananthapur
district of Andhra Pradesh in the solar and wind power sector for the generation of 650
MW of power.

Solar technology provider SunEdison signed a definitive agreement to acquire

Continuum Wind Energy, Singapore, with assets in India. The company, headquartered in
Belmont, California, would take over 242 MW of operating wind assets that Continuum
owns and operates in Maharashtra and Gujarat as well as 170 MW of assets under
construction.

Japanese internet and telecommunications giant SoftBank, along with Bharti Enterprises
(of Sunil Mittal) and Taiwanese manufacturing giant Foxconn, plan to invest US$ 20
billion in solar energy projects in India.

Government Initiatives
The Government of India has identified power sector as a key sector of focus so as to promote
sustained industrial growth. Some initiatives by the Government of India to boost the Indian
power sector:

The Government of India plans to set up a trading platform for clean energy, which will
be jointly developed by the Ministry of New and Renewable Energy (MNRE) and Power
Trading Corporation of India (PTC), to help states buy, sell and trade renewable-based
power.

The Government of India and the Government of the United Kingdom have signed an
agreement to work together in the fields of Solar Energy and Nano Material Research,

which is expected to yield high quality and high impact research outputs having industrial
relevance, targeted towards addressing societal needs.

Mr Piyush Goyal, Minister of State (Independent Charge) for Power, Coal, New and
Renewable Energy, has stated that the Government of India has set a target to electrify all
un-electrified villages in the country by the end of 2016.

The Ministry of Petroleum and Natural Gas is seeking to enhance India's crude oil
refining capacity through 2040 by setting up a high-level panel, which will work towards
aligning India's energy portfolio with changing trends and transition towards cleaner
sources of energy generation.

The Government of India plans to start as many as 10,000 solar, wind and biomass power
projects in next five years, with an average capacity of 50 kilowatt per project, thereby
adding 500 megawatt to the total installed capacity.

Mr Piyush Goyal, Minister of State (Independent Charge) for Power, Coal and New &
Renewable Energy outlined Government of Indias goal to provide electricity to every
home in India by 2020, while also focussing on ensuring the cost of power is affordable
to everyone.

Government of India has asked states to prepare action plans with year-wise targets to
introduce renewable energy technologies and install solar rooftop panels so that the states
complement government's works to achieve 175 Gigawatts of renewable power by 2022.

Under the Deen Dayal Upadhyaya Gram Jyoti Yojna (DDUGJY), the Government of
India has electrified 258 villages across the country between February 15, 2016 and
February 21, 2016 and has decided to electrify remaining 18,452 unelectrified villages by
May 01, 2018.

The Government of India plans to sell another 5 per cent stake in the country's largest
power producer National Thermal Power Corporation (NTPC), at a floor price of Rs 122
(US$ 1.78) per share, which will help the government raise over Rs 5,000 crore (US$
733.6 million), thereby helping to raise funds as part of the divestment plan.

The Ministry of New and Renewable Energy (MNRE) has outlined new guidelines which
allow state government to use its unproductive and non-agricultural land for solar parks,
thereby minimising the use of private land and reducing the problems faced and costs
incurred for land acquisition for solar park projects.

The Government of India plans to auction large sized hydropower projects, similar to the
auction of Ultra Mega Power Projects (UMPPs) for thermal power plants of capacity
4,000 megawatt (MW) in Sasan in Madhya Pradesh and Mundra in Gujarat, which have
been setup in a cost effective manner.

The Union Cabinet has approved amendments to the new power tariff policy under the
Electricity Act that aims to improve regulations for setting rates, promote clean energy
and ensure uninterrupted supply to all consumers by FY 2021-22.

The Union Cabinet has approved the Ujwal DISCOM Assurance Yojna (UDAY) for
financial turnaround and revival of power distribution companies (DISCOMs), which
will ensure accessible, affordable and available power for all.

The Government of India has resolved the issues regarding transfer of mining leases and
grant of forest clearances to the winning bidders of coal blocks. It expects operations to
start in about 10 more mines by March 2016, easing coal availability to the projects
attached to these mines.

The Ministry of Power has planned to provide electricity to 18,500 villages in three years
under the Deendayal Upadhyaya Gram Jyoti Yojana (DUGJY). Out of these, 3,500
villages would receive electricity through off-grid or renewable energy solutions.

The Ministry of New & Renewable Energy is implementing two national level
programmes, namely Grid Connected Rooftop & Small Solar Power Plants Programme
and Off-Grid & Decentralised Solar Applications, in order to promote installation of solar
rooftop systems, as per Mr Piyush Goyal, Minister of State (Independent Charge) for
Power, Coal & New and Renewable Energy.

The Government of Odisha plans to set up a large 1,000-MW solar power park under
public-private partnership (PPP) mode involving an investment of about Rs 6,500 crore
(US$ 953.67 billion).

The Government of Telangana plans to set up an incubator centre, in collaboration with

University of Austin, Texas, for start-ups in the renewable energy sector, to support new
companies entering the renewable energy market.

A Joint Indo-US PACE Setter Fund has been established, with a contribution of US$ 4
million from each side to enhance clean energy cooperation.

The Government of India announced a massive renewable power production target of

175,000 MW by 2022; this comprises generation of 100,000 MW from solar power,
60,000 MW from wind energy, 10,000 MW from biomass, and 5,000 MW from small
hydro power projects.

The Union Cabinet of India approved 15,000 MW of grid-connected solar power projects
of National Thermal Power Corp Ltd (NTPC).

The Road Ahead

The Indian power sector has an investment potential of Rs 15 trillion (US$ 222.36 billion) in the
next 45 years, thereby providing immense opportunities in power generation, distribution,
transmission, and equipment, according to Union Minister Mr Piyush Goyal.
The governments immediate goal is to generate two trillion units (kilowatt hours) of energy by
2019. This means doubling the current production capacity to provide 24x7 electricity for
residential, industrial, commercial and agriculture use.
The Government of India is taking a number of steps and initiatives like 10-year tax exemption
for solar energy projects, etc., in order to achieve India's ambitious renewable energy targets of
adding 175 GW of renewable energy, including addition of 100 GW of solar power, by the year
2022. The cumulative installed capacity of solar power in India has crossed the 4 Gigawatt mark
as of June 30, 2015. The government has also sought to restart the stalled hydro power projects
and increase the wind energy production target to 60 GW by 2022 from the current 20 GW.
Exchange Rate Used: INR 1 = US$ 0.0148 as on July 11, 2016
References: Media Reports, Press Releases, Press Information Bureau (PIB)
Note: # - EYs Renewable Energy Country Attractiveness Index, ! - by 2020 as per India Solar
Rooftop Map | 2016 Edition by Bridge to India, @ - as per rating agency ICRA, ## - as per
global clean energy communications and research firm Mercom Capital Group, $- as per data
from Central Electricity Authority, % - according to a report by Mercom Capital
Disclaimer: This information has been collected through secondary research and IBEF is not
responsible for any errors in the same

India's Power Sector

April 19, 2010 [ http://www.worldbank.org/en/news/feature/2010/04/19/india-power-sector]
Overview
To meet the needs of India's growing economy, providing reliable, affordable, secure, and
sustainable energy requires exploring a range of options including maximizing domestic
production, diversifying the fuel mix and the source of supply, and maintaining sufficient
reserves, if necessary. This will ensure price stability as also security of supply in the energy
sector. Fluctuations in the delivery price of the energy have cascading effect on the growth
process itself. Despite high economic growth, poverty remains high. Hence, expanding economic
development opportunities is a key focus of the government.
India is still home to about 350 million people who lack access to electricity, more than 25% of

the worldwide total of 1.4 billion people without electricity. The per capita electricity
consumption (KWh per capita) is only around 566 compared to world average of 2,782. India
aims to achieve universal access and an annual minimum consumption of 1,000 kWh for all its
citizens by 2012. India also faces massive demand-supply gap exacerbated by delays in capacity
addition, problems in securing fuel linkages and inefficiencies especially in network segments.
Challenges
Lack of reliable power continues to be a major constraint to sustained industrial growth,
investment and economic competitiveness for the country. Electricity shortages are estimated to
cost the country around 7% of GDP. Electricity generation/supply has grown at only an average
of 5.3% per year.
Improved performance of the sector is necessary for ensuring sustained and inclusive growth.
India's challenges in the power sector are significant:
Low access to modern energy: With a largely rural population base and low access to modern
energy services, there is high dependence on traditional fuels: non-commercial biomass still is a
significant energy source, constituting more than 30 percent of the fuel mix in the country. More
than 350 million people still lack access to electricity. Low access to modern energy sources in
rural areas compromises productivity, particularly opportunities for non-farm employment for
the labor force engaged in agriculture. However, there is rapidly rising demand for modern
commercial fuels, spurred by rising wealth and steadily improving access.
Heavy dependence on fossil fuel with significant untapped renewable energy potential:
India continues to rely heavily upon fossil fuel (coal) for its power sector. While it has a
significant hydropower potential in absolute terms (150,000 MW) but this is small compared to
the countrys energy needs and also largely untapped (only 25% potential harnessed so far).
More than 60% of firms and a large percentage of homes rely on captive or back up generation
Reported peak power deficit is 10.3% and the energy deficit is 8.5%, while actual shortages of
electricity experienced on the ground are even higher. Reliability, fuel efficiency, and
environmental performance of about 27,000 MW of old coal based generation capacity need to
be improved.
Weak sector institutions and utility governance are compromising sectors financial
performance: The accountability, operational efficiency, and customer service orientation of
restructured entities remain low. Around 28% of electricity supplied into the state level
transmission systems is lost due to technical and non-technical reasons, and cost recovery from
tariffs is only approximately 80%. As a result, the financial condition of the sector remains
fragile, resulting in slow commercialization and a high degree of budget/ debt dependence.
Distribution losses are estimated at approximately $14 billion in 2010-11. This poor financial
performance and dependence on the state governments deters private investment and restricts the
ability of the sector to invest in new generation capacity and in maintaining and extending the
network. To some extent, this creates a vicious circle in which the state electricity utilities lack
the funds necessary to improve infrastructure and the performance of the sector in meeting
customer needs, with blackouts remaining common. The industrial tariffs continue to cross-

subsidize household and farmers, the sector is exposed to a high degree of politicization. With a
few exceptions, processes for ensuring regulatory independence, competence, and accountability
need significant improvement.
Sustainability and climate change considerations are increasing in importance: The sector
development strategy include an increased reliance on coal to meet the energy requirement.
Although India has low per capita emissions, it is currently the sixth largest GHG emitter in the
world and accounts for 4% of global GHG emissions. Coal fired power plants comprise 65% of
total capacity in the country, with the sector responsible for 50% of countrys CO2 emissions.
While CO2 emissions are likely to continue to grow until at least 2040, India has significant
potential for following a lower or higher carbon path, depending on its policies, institutions and
the international support it receives. If the government were to implement the full set of policies
identified in its Integrated Energy Policy report (2006), there is scope for reducing emissions to
the reference scenario by about 30% by 2030. Key measures include (i) improving the efficiency
of supply and consumption of energy; (ii) expanding the proportion of natural gas, and
hydropower in the fuel mix; and (iii) reducing energy intensity in the transport sector.
Government Priorities
India's current grid-connected generation capacity is about 177,000 MW (65% coal; 22% hydro;
13% other). Under the 11th 5-Year Plan (2007-2012), the government of India expects to provide
all its people with access to electricity by 2012. While the government of India is working to
strengthen the public sector's capacity, it is also encouraging a paradigm shift to scale-up publicprivate partnerships (PPP) in the sector. Currently, the private sector is only handling 21.9% of
grid-based generation and 12% of distribution.
To achieve these goals, the government is focusing on:
Increasing Access:
Electrify all villages, providing access to all rural households and free connections to all belowpoverty-line families under the flagship program Rajiv Gandhi Grameen Vidyutikaran Yojana
(RGGVY); with an aim to achieve universal access and annual minimum level of consumption to
1000 kWh by 2012.
Climate Change:
National Action Plan on Climate Change (NAPCC) emphasizes the overriding priority of
maintaining high economic growth rates to raise living standards, the plan identifies measures
that promote our development objectives while also yielding co-benefits for addressing climate
change effectively. The plan identifies eight core national missions running through 2017.
One key pillar is National Solar Mission which aims to establish India as a global leader in solar
energy, by creating an enabling policy framework for deployment of 1000 MW by 2013 leading
upto 20 GW of solar power by 2022. The other key pillar is National Mission for Enhanced
Energy Efficiency (NMEEE) which seeks to strengthen the market for energy efficiency by
creating conducive regulatory and policy regime. NMEEE has been envisaged to foster
innovative and sustainable business models to the energy efficiency sector, including focus on (i)

standards and labeling, (ii) industrial end use efficiency in large consumers, (iii) accelerated shift
to energy efficiency appliances, and (iv) energy efficiency financing platform.
Expanding Generation:
Adding generation capacity of about 80,000 MW over next five year period (four times of
historical five year average), including 16,000 MW of hydropower.
Increasing renewable energy from 4% of installed capacity to 10% by 2012, by expanding
small and medium hydro, wind, and biomass.
Increasing share of solar energy ,under the National Solar Mission of the GoI, to 20,000 MW
by 2020
Improving Energy Efficiency:
Rehabilitating and modernizing about 27,000 MW of old coal-fired power plants.
Increasing the share of supercritical power plants to 20% of new installations.
Managing Demand:
Including in irrigated agriculture which accounts for 20-25% of total electricity consumed.
Adopting stringent and enforceable energy-efficiency standards.
Improving quality of energy supply and service:
Expanding inter-regional transmission from 10,000 MW to 37,000 MW by 2012
Upgrading and expanding distribution networks and setting up management information
systems as the network is overloaded and suffers from poor performance with excessively large
technical losses of electricity. Non-technical commercial losses, which capture widespread theft
and deficiencies in billing and collection, are also extremely high. In 2008-09, aggregate
technical and commercial (AT&C) losses ranged between 13 and 81% of electricity generated at
the state level, and averaged 28% at the national level (Power Finance Corp. Ltd., 2010). In an
ongoing attempt to reduce AT&C losses to 15%, a Restructured Accelerated Power Development
and Reform Programme was introduced by GoI . This programme provides for the conversion of
central-government loans into grants contingent on sustained reductions in AT&C losses at the
state level.
World Bank Support
Through its lending and non-lending support, the World Bank's program addresses both the first
generation issues in the sector (access, asset creation and maintenance, sector and corporate
governance, efficiency) and the second generation issues (competition, private sector
participation, securing reliable energy supplies, climate change, and regional energy trade).
While Policy frameworks for reform and investment have come a long way, implementation and
institution/capacity building remain a major challenge. The Bank's lending to India's power
sector is modest $4 billion portfolio, compared to its requirements of $30 billion per annum on
average.
The World Banks support is following the strategy of selective, in-depth, long-term
engagements with key sector institutions, with a focus on improving technical, commercial,
safeguard, and fiduciary practices. For instance, the program has introduced ideas such as

resource corridors and the use of tools like river basin analyses and cumulative impact
assessments in its environmental analysis of hydro projects. The support is bringing new
technologies to the attention of counterparts, working to improve the transparency and
objectivity of procurement practices, and making efforts to increase the effectiveness of dispute
resolution mechanisms.
With core objectives of supporting the development of a low-carbon growth path for the sector
and improving service delivery across the supply chain and to the last mile, the support reflects
the view that institution-building, business process re-engineering, and improvement of business
fundamentals are more likely to yield sustained results and better outcomes than one-off projectlevel interactions. As exemplars of good practice, strengthened institutions can themselves build
implementation capacity in other institutions and have broader knock-on system-wide effects
(as is the case with Power Grid, which now provides technical assistance to state transmission
utilities across the country).
The World Banks program is also aimed to initiate debate on challenges of access and
agriculture consumption, through analytical work at national and state level. The agenda is to
move to a Middle Income Country program of selective lending with deep analytical inputs and
technical assistance programs. The technical assistance programs, often wedded within project
designs, are aimed at creating and/or strengthening institutions for effective service delivery and
regulation, facilitating the effective functioning of domestic and regional electricity markets, and
promoting clean energy options to meet country demand.
The Bank support is centered on three core areas:
Energy distribution services- This set of engagements focuses on improvement of quality and
efficiency of service delivery through support for distribution utilities, including for
organizational transformation, corporate governance, and business practices. It also includes
attention to improving rural supply and moving towards universal access.
Regional and domestic energy markets- This set of engagement focuses on the expansion of
transmission capacity at both regional and national levels, to facilitate the development of
efficient electricity markets and inter-regional power transfer. It provides technical support on
load dispatch functions and energy trading within the broader objective of enhancing sector
governance through assistance to regulatory and competition authorities.
Clean energy development- This set of engagement covers clean power generation through
support for hydropower projects, renewable energy development (including distributed
generation for improved rural access and services), and solar power. The engagement in Solar
power includes policy support and implementation support for addressing the barriers faced for
solar power development in India and institutional capacity building of the nodal agency and
solar centre of excellence. The clean energy development also includes a focus on energy
efficiency through (i) support for the rehabilitation of thermal power plants, for (ii) enhancing the
efficiency of power transmission and distribution through loss reduction and smarter grids, and
for (iii) increasing demand for energy efficiency investments in micro, small and medium
enterprise (MSMEs) clusters and to build their capacity to access commercial finance.