Report Final Power Industry

A Report on Power Industry
Power Sector in India
1
Contents
Contents..................................................................................................................... 2
1.Overview................................................................................................................. 3
How does Power reach us? .....................................................................................3
Power Sector .......................................................................................................... 4
Power Sources.........................................................................................................5
Distribution ............................................................................................................ 6
Transmission ........................................................................................................ 7
Market .................................................................................................................... 7
Role of Public and Private Sector............................................................................8
The 5 year plans .................................................................................................... 9
2.Major Players in the Market...................................................................................12
Generation ........................................................................................................... 12
Generation............................................................................................................ 15
Transmission......................................................................................................... 15
Distribution........................................................................................................... 16
3.Challenges and Opportunities...............................................................................17
4. Conclusion............................................................................................................ 21
2
1.Overview
Power development is the key to the economic development. India is world's 6th
largest energy consumer, accounting for 3.4% of global energy consumption. Due
to India's economic rise, the demand for energy has grown at an average of 3.6%
per annum over the past 30 years.
Remarkable growth and progress have led to extensive use of electricity in all the
sectors of economy in the successive five years plans. The average per capita
consumption of electricity in India is estimated to be 704 kWh during 2008-09.
However, this is fairly low when compared to that of some of the developed and
emerging nations such US (~15,000 kWh) and China (~1,800 kWh). The world
average stands at 2,300 kWh.
Due to shortage of electricity, power cuts are common throughout India and this
has adversely effected the country's economic growth. Theft of electricity, common
in most parts of urban India, amounts to 1.5% of India's GDP. Despite an ambitious
rural electrification program, some 400 million Indians lose electricity access during
blackouts. While 80 percent of Indian villages have at least an electricity line, just
44 percent of rural households have access to electricity.
The commercial losses are mainly due to low metering efficiency, theft & pilferages.
This may be eliminated by improving metering efficiency, proper energy accounting
& auditing and improved billing & collection efficiency.
How does Power reach us?
Electric power is normally generated at 11-25kV in a power station. To transmit

over long distances, it is then stepped-up to 400kV, 220kV or 132kV as necessary.
Power is carried through a transmission network of high voltage lines. Usually,
these lines run into hundreds of kilometres and deliver the power into a common
power pool called the grid. The grid is connected to load centres (cities) through a
sub-transmission network of normally 33kV (or sometimes 66kV) lines. These lines
terminate into a 33kV (or 66kV) substation, where the voltage is stepped-down to
11kV for power distribution to load points through a distribution network of lines at
11kV and lower.
The power network, which generally concerns the common man, is the distribution
network of 11kV lines or feeders downstream of the 33kV substation. Each 11kV
feeder which emanates from the 33kV substation branches further into several
subsidiary 11kV feeders to carry power close to the load points (localities, industrial
areas, villages, etc.,). At these load points, a transformer further reduces the
voltage from 11kV to 415V to provide the last-mile connection through 415V
feeders (also called as Low Tension (LT) feeders) to individual customers, either at
3
240V (as single-

phase supply) or
at 415V (as
three- phase
supply). A
feeder
could be either
an overhead
line or an
underground cable. In urban areas, owing to the density of customers, the length of
an 11kV feeder is generally up to 3 km. On the other hand, in rural areas, the
feeder length is much larger (up to 20 km). A 415V feeder should normally be
restricted to about 0.5-1.0 km. Unduly long feeder lead to low voltage at the
consumer end.
Power Sector
The three areas of operations related to the power sector are generation, transmission and
distribution of power.
Generation:
India has the fifth largest generation capacity in the world with an installed capacity
of 161 GW as on June 2010 which is about 4 percent of global power generation.
In order to provide availability of over 1000 units of per capita electricity by year
2012, it has been estimated that need-based capacity addition of more than
100,000 MW would be required. The Indian government has set ambitious goals in
the 11th plan for power sector owing to which the power sector is poised for
significant expansion.
The spread of the installed capacities (in MW) as per the different regions of the
country as recorded on 31 May 2010 is given as under:
4
Grand
Power Sources
Region Total(MW) About 64% of the electricity consumed in India
Northern is generated by thermal power plants, 23% by
Region 42722.62 hydroelectric power plants and 3% by nuclear
Western Region 50689.22 power plants. More than 50% of India's
Southern commercial energy demand is met through the
Region 44241.3 country's vast coal reserves. The country has
Eastern Region 21319.61 also invested heavily in recent years on
North East renewable sources of energy such as wind
Regions 2302.93 energy. Additionally, India has committed
Islands 76.12
massive amount of funds for the construction of
various nuclear reactors which would generate at least 30,000 MW. In July 2009,
India unveiled a $19 billion plan to produce 20,000 MW of solar power by 2020.
The contribution of different sources of power generation can be classified as:
Power Installed
Source Capacity (MW)
Thermal 103448.98
Nuclear 4560.00
Hydro
(Renewable) 36913.40
Renewable
Energy
Sources (RES)* 16429.42
*Renewable Energy Sources include Small Hydro Project, Biomass Gasifier, Biomass
Power, Urban & Industrial Waste Power and Renewable Energy Sources.
Out of the total thermal power generated, the contributions of Coal, Gas and Diesel
are given as under:
5
Thermal Power Installed

Source Capacity
Coal 85193.38
Gas 17055.85
Diesel 1199.75
Distribution
Distribution of Power in India is marred by a large amount of Transmission and
Distribution (T & D) losses. Currently, these figures stand at 33% of distributed
power which are far more than the global benchmarks.
In order to address some of the issues in the distribution, following reforms have
been undertaken:
• Unbundling of the State Electricity Boards: These boards have been

divided into separate generation, transmission and distribution units.
• Privatization of power distribution: This has been done through either

the franchisee route or outright.
6
• Launch of Accelerated Power Development & Reform Programme

(APDRP) in 2001: This was done with the objective of strengthening of Sub
– Transmission and Distribution network and reduction in AT&C losses.
The Distribution companies face problems due to inefficiencies in metering, billing

and collection operations.
Following figure gives the distribution of electrical power among various groups. It
is seen that most of the consumption is done by domestic customer.
Figure: Classification of customers of Electrical Power in India
Transmission
Transmission of electricity is defined as bulk transfer of power over a long distance
at high voltage, generally of 132kV and above.
The entire country has been divided into five regions for transmission systems,
namely, Northern Region, North Eastern Region, Eastern Region, Southern Region
and Western Region. The Interconnected transmission system within each region is
also called the regional grid.
The current installed transmission capacity is only 13 percent of the total installed
generation capacity. Ministry of Power plans to establish an integrated National
Power Grid in the country by 2012 with close to 200,000 MW generation capacities
and 37,700 MW of inter-regional power transfer capacity
Market
The contribution of the different sectors is seen here (As of June 2010):
7
Figure: Different players in the Power Sector
The electricity sector in India is predominantly controlled by the Government of

India's public sector undertakings (PSUs). Major PSUs involved in the generation of
electricity include
• National Thermal Power Corporation (NTPC)
• National Hydroelectric Power Corporation (NHPC)
• Nuclear Power Corporation of India (NPCI)
Besides PSUs, several state-level corporations, such as Maharashtra State

Electricity Board, Kerala State Electricity Board, (MSEB),in Gujarat (MGVCL, PGVCL,
DGVCL, UGVCL four distribution Companies and one controlling body GUVNL, and
one generation company GSEC), are also involved in the generation and intra-state
distribution of electricity.
The PowerGrid Corporation of India (PGCIL) is responsible for the inter-state

transmission of electricity and the development of national grid.
Role of Public and Private Sector

The power sector is mostly dominated by the Central and State utilities.
• Out of the overall generation capacity, the share of central and state utilities
stands at about 33% and 50 % respectively; and remaining being covered by
the private sector.
• In the distribution and transmission, the share of central and state utilities
remains at about 40 percent and 60 percent respectively.
But the participation of the Private sector is also growing due to the supportive
government policies of the government. Some of the reforms in the sector include:
• Electricity Act, 2003: Removed the need for license for generation projects,
encouraged competition through international competitive bidding, identified
transmission as a separate activity
• Unbundling of SEBs
8
• Tax benefits
• Accelerated Power Development and Reform Program (APDRP) for
distribution
• Permission for trading of power
Some of the important private players in the sector include

o Tata Power
o RPG Group
o Reliance Energy
Some international players include the China Light and Power (CLP), Marubeni
Corporation.
Still, the new entrants in this sector face a number of challenges relating to the
project execution, fuel security, power equipment capacities, infrastructure
constraints, etc
The 5 year plans
During the 11th five-year-plan, a total of 78.7 GW of capacity would be added. Out
of the total contribution, central and state utilities together are estimated to add
nearly 63.7 GW.
Capacity Enhancement: Targets and Achievements
A short peek at our past performances indicate that during the last three five year
plans (8th, 9thand 10th), we have barely managed to achieve half of the capacity
addition that was planned.
Entering into the third year of the 11th five year plan, slippages have appeared on
the planned approx. 79 GW capacity addition. The following figure gives an
indication of the difference between the planned capacity building and the actual
results over the five year plans.
9
Figure: Capacity Addition-Targets and Achievements
Power for all by 2012
The Government of India has an ambitious mission of POWER FOR ALL BY 2012.
This mission would require that the installed generation capacity should be at least
200,000 MW by 2012. Power requirement will double by 2020 to 400,000MW.
Objectives
o Sufficient power to achieve GDP growth rate of 8%
o Reliable power
o Quality power
o Optimum power cost
o Commercial viability of power industry
o Power for all
Strategies
o Power Generation Strategy with focus on low cost generation, optimization
of capacity utilization, controlling the input cost, optimisation of fuel mix,
Technology upgradation and utilization of Non Conventional energy
sources
o Transmission Strategy with focus on development of National Grid
including Interstate connections, Technology upgradation & optimization of
transmission cost.
10
o Distribution strategy to achieve Distribution Reforms with focus on System

upgradation, loss reduction, theft control, consumer service orientation,
quality power supply commercialization, Decentralized distributed
generation and supply for rural areas.
o Regulation Strategy aimed at protecting Consumer interests and making
the sector commercially viable.
o Financing Strategy to generate resources for required growth of the power
sector.
o Conservation Strategy to optimise the utilization of electricity with focus on
Demand Side management, Load management and Technology
upgradation to provide energy efficient equipment / gadgets.
o Communication Strategy for political consensus with media support to
enhance the general public awareness.
According to CRISIL Research estimates, about INR 7,50,000 crore is likely to be

invested in the power sector over the next five years by 2013-14. Of this, INR
4,80,000 crore is expected to be invested in the power generation space. Nearly
half of the investments in the power generation space is likely to be made by the
private sector.
11
2.Major Players in the Market

Generation
National Thermal Power Corporation Ltd
NTPC Limited, India’s largest power company with an installed capacity of

29,894 MW is presently operating 15 coal based, 7 gas based power stations
and 4 joint ventures. NTPC contributed around 28.5% of the country’s entire
power generation during the year 2007-08 and plans to become a 75,000
MW power company by 2017. NTPC has moved ahead by diversifying its
portfolio to emerge as an integrated power major with presence across the
entire energy value chain. NTPC has been allocated 6 coal mine blocks which
are expected to produce 48 million tons per annum.
NTPC has been ranked No. 1 in 'Best Workplaces for Large Organizations'
and eighth overall in 2008 by Great Places to Work in collaboration with the
Economic Times.
With its excellent practice in Human Capital Management, NTPC is the most
admired organization in public sector. Powered by dynamic and dedicated
workforce
Tata Power Company Limited
It Started as the Tata Hydroelectric Power Supply Company in 1911, it is an

amalgamation of two entities: Tata Hydroelectric Power Supply Company
and Andhra Valley Power Supply Company (1916). Today Tata Power
Company Limited is India’s largest private sector electricity generating
company with an installed generation capacity of over 2977 MW
Tata Power has entered into a 51:49 joint venture with PowerGrid
Corporation of India for the 1200 km Tala transmission project. The joint
12
venture is India’s first transmission project to be executed with public-

private partnership
GMR Power Corporation Pvt ltd
The 200 MW power plant in Chennai was commissioned in 1998. The entire
power generated at this plant is supplied to the Tamil Nadu State Electricity
Board.
A distinguishing feature of this plant is a sophisticated sewage treatment

unit, the first and only one of its kind in India. GMR Power Corporation,
instead of burdening the water supply of the water-starved city of Chennai,
has developed a unique method of conserving water. The plant treats 7200
cubic meters of raw sewage per day from Chennai Metropolitan & Sewerage
Board to produce 5400 cubic meters of clean water for its own use
Reliance Energy Ltd
Reliance Energy is India’s largest integrated private sector power utility

company. The company is into generation, transmission, distribution and
trading of power. It distributes over 5,000 MW of power - the largest in the
country.
Reliance Energy and its affiliate companies power 2 out of 3 homes in
Mumbai and 1 out of 2 in Delhi and has a consumer base of 5 million
catering to an estimated population of 25 million in Mumbai, Delhi and
Orissa. It is poised to become a nationwide power company, providing world
class quality, reliable and competitively priced power to millions of
customers.
Essar Power
India's first independent power plant with a 515 MW combined cycle
capacity, Essar power has set new standards of excellence in power
13
generation and plant productivity.
Essar Power's 515 MW combined cycle power plant at Hazira supplies 300
MW to the Gujarat Electricity Board (GEB), while 215 MW meets the entire
power requirements of Essar Steel Ltd. The plant commenced its commercial
operations in 1997. The plant benefits from many strategic advantages,
world-class equipment and a skilled team.
Reliance Power
Reliance Power Limited is part of the Reliance Anil Dhirubhai Ambani Group
and is established to develop, construct and operate power projects
domestically and internationally. The Company on its own and through
subsidiaries is currently developing 13 medium and large sized power
projects with a combined planned installed capacity of 28,200 MW, one of
the largest portfolios of power generation assets under development in India.
It is in the top three private sector business houses on all major financial
parameters, with a market capitalization of Rs.325,000 crores (US$ 81
billion), net assets in excess of Rs.115,000 crores (US$ 29 billion), and net
worth to the tune of Rs.55,000 crores (US$ 14 billion).
Jindal Steel and Power Limited
Jindal Steel and Power Limited is the most valuable private steel producer in
India, with an annual turnover of over US $2.1 billion (Rs. 10,000 crore),
Jindal Steel & Power Limited (JSPL) forms a part of the US $12 billion (over
Rs. 60,000 crore) Jindal Group. JSPL is a leading player in Steel, Power,
Mining, Oil & Gas and Infrastructure.
JPL has set up India’s first mega power project in the private sector at
Raigarh, Chhattisgarh. The company has invested approximately. Rs. 4310
crore for setting up 1000 MW power plant which commenced commercial
14
operation of the 1st unit in December 2007 and all four units (250 MW each)
were commissioned within a span of nine months.
Jindal Power Limited is expanding its capacity at Tamnar by setting up a

2400 MW Thermal Power plant at an estimated cost of Rs 13,410 crore. The
company has already placed order on Bharat Heavy Electricals Limited
(BHEL) for supply, erection and commissioning of 4X600 MW Boiler Turbine
Generation (BTG) package. The existing 1000 MW power plant was set up
with four Turbine Generators of 250 MW each, also supplied by BHEL.
JPL has also signed an MoU with the State Government of Jharkhand to set
up a 2640 MW Thermal Power plant.
In the Hydro sector, JPL has signed agreements for 6100 MW projects in
Arunachal Pradesh in joint venture with Hydro Power Development
Corporation of Arunachal Pradesh Limited(HPDCAPL).
India has total installed capacity of 161351.8 Million Watts with Maharashtra
as the leader state with 13.30% followed by Tamil Nadu 9.07% and Gujarat
stands third with 8.8% of the total installed Capacity.
Generation
India is the fifth largest generation capacity in the world after US ,Japan
,China and Russia these four countries total consume almost 49% of power
generated all across the globe
Transmission
15
Existing total transmission capacity is just 13 % of the total power

generated. The Ministry of Power plans to establish an integrated National
Power Grid in the country by 2012 with close to 200,000 MW generation
capacities and 37,700 MW of inter-regional power transfer capacity.
Considering that the current inter-regional power transfer capacity of 20,750
MW, this is indeed the most desirable goal for the country in the power
sector. The entire value chain of the power sector is dominated by the
central and state sector utilities. For instance, in the generation space, out of
the overall capacity of 152 GW, the share of the state utilities stands at 49.8
GW that is just the 33% from the state as compared to central which is 50%
that is 76.6 GW, and that of private sector stands at 25.8 GW. Even, of the
78.7 GW planned capacity additions during the 11th five-year-plan, central
and state utilities together are estimated to add nearly 63.7 GW .
Distribution
From last few years some progress has been made at reducing the
Transmission and Distribution (T&D) losses, these still remain substantially
higher than the global benchmarks, at approximately 33 percent. In order to
address some of the issues in this segment, reforms have been undertaken
through unbundling the State Electricity Boards into separate Generation,
Transmission and Distribution units and privatization of power distribution
has been initiated either through the outright privatization or the franchisee
route; results of these initiatives have been somewhat mixed. While there
has been a slow and gradual improvement in metering, billing and collection
efficiency, the current loss levels still pose a significant challenge for
distribution companies going forward.
16
3.Challenges and Opportunities
One of the biggest challenges of India is to cut on the power deficit.

According to the statistics given by Central electricity authority of India,
India’s apex power sector planning body, the country is facing a power
deficit1 of 11% (as of February 2008.) The total power requirement of the
country was 705,724 million units whereas the generated capacity was only
628,146 million units. This is, when the latent need of electrified buildings
i.e. buildings that would like to use more power but cannot do the same
because of the shortage, is not taken into consideration. Many of the coal-
based power plants are running with buffer stocks of coal not enough to last
even a day, while the others are running with less than four days' or seven
days' inventories, against the norm to keep 15 days' worth of coal stock. As
of 2007-08, the per capita consumption of electricity in India is only 704
units as compared to 1802 units of China. The National Electricity Policy2
wants to raise it to 1000 units by 2012 which, the experts comment, is an
unachievable and audacious target. The previous track record of the
government supports their view. According to the economic survey of 2008 –
09, the target for additional power generation of 2007-08 was set at 16,335
MW. This was subsequently reduced to 12039 MW, whereas the final
generation was a measly 9623 MW which is barely half of the determined
target. The story for 2008-09 was no different with the target being set at
11,061 MW and the final generation of 7530MW. This indicates the
consistent lackadaisical attitude of the government towards an industry that
is now a necessity than luxury. The total power generation today from all the
sources is 150,000MW and is expected to grow to 250,000MW in the next 3
years. Apart from the problem of capacity building, Transmission and
Distribution problems pose a formidable challenge to the power industry.
17
It needs to be analyzed as to why there has been a consistent failure 3 in

reaching the adequate power generation levels. One of the reasons is the
monopoly of the government companies. Out of the total 152 GW capacity
being generated, the central and state utilities have the biggest pie with
49.8 GW and 76.6 GW respectively. 95% of the distribution network is owned
by State Electricity Boards. Over the years, the government has tried to
involve the private sector in the power sector. The Electricity Act, 2003
brought in some of the reforms needed but still a lot needs to be done. For
example, Hydel power generation is a big opportunity but most of the power
plants are in hilly areas where construction requires high input costs. Until
very attractive incentives are provided the private parties may not be willing
to come forward.
Fuel availability is another major problem. Coal is the mainstay of power

generation in India. The shortage of coal has prompted companies to for the
resource outside the country’s borders. Some firms are operating coal mines
in Indonesia and South Africa, but this poses a significant legal risk in the
form of changing regulatory framework of the host countries. Supply
disruptions on these accounts need to be managed through diversification of
supply, due diligence on suppliers, unambiguous contracting, etc. Apart from
supply shortage, logistics disruption is another problem. Increased usage of
coal directly affects the transportation hauls needed by Indian Railways.
Thus, a strong supply chain is needed if power ventures are to succeed.
Equipment shortage is another reason for delay in the commissioning of

power projects. Infact, it was one of the major reasons pointed out towards
the failure of the 10th five year plan. While the shortage has been primarily in
the core components of Boilers, Turbines and Generators, there has been
lack of adequate supply of Balance of Plant (BOP) equipment as well. These
include coal-handling, ash handling plants, etc. Apart from these, there is
shortage of construction equipment as well. The Working Group on Power for
11th Plan has outlined the requirement for construction equipment for Hydro
18
and Thermal power plants. The power companies, along with the
government, are seeking out ways to meet this problem. Lately, the
domestic manufacturing capability has been rendered a boost by
establishing JV’s between Indian and foreign suppliers. Also many firms are
directly procuring equipment from foreign suppliers. The government needs
to give further impetus to the companies by liberalizing import laws
specially, when companies are sourcing from countries like China that have
proved to be a lot more cost effective and faster than domestic suppliers.
Another pestering problem is that of Land Acquisition. Power plants and
utilities face major constraints and delays regarding the availability of land
and obtaining the requisite environment and other clearances for the
projects. The new Bill relating to land acquisition has continued to face
political opposition. While it provides for acquisition by project development
agencies to the extent of 70 percent of the land required for a project, with
the balance to be obtained by the Government. One of the unknown
problems of the power sector has been Manpower crunch. The rise of the IT
sector and the freely available jobs in it has taken a toll on the power
industry. The education system is often not delivering the required number
of specialists across project management, engineering, estimating,
surveying and contract management. Thus, it is imperative that the policy
makers take care of the situation at the earliest.
Apart from this, it has been widely pointed out that the government has not
concentrated on alternative energy sources and even the hydel power
projects. For example, the potential for hydel power in the country is
estimated to be 150,000MW but barely 20% of it is exploited. Poor project
management skills and improper reservoir design and maintenance are cited
to be the primary causes of these. Similarly, the potential of renewable
energy sector is pitted at 300,000MW but only 13% of it has been tapped.
India has a tropical climate and an over abundance of sunlight. Still, the
amount of solar energy4 produced in India is merely 0.4% compared to other
energy resources. The Grid-interactive solar power as of June 2007 was
19
merely 2.12 MW. Government-funded solar energy in India only accounted

for approximately 6.4 megawatt-years of power as of 2005. Still India, is said
to be competing with the US in terms of solar power generated. The problem
with solar energy is the high production cost which stands at Rs. 15/unit. The
minimum tariff structure comes to around Rs. 18/unit. To reduce the cost it
is necessary to increase the production base which translates to subsidies
being provided by the government.
Lately, Wind power has been a rising star of the Indian power sector.
Currently 1.6% of the total power is generated through wind energy and is
steadily increasing. India today is the 5th largest Wind power generator in the
world. Initial cost for wind turbines is greater than that of conventional fossil
fuel generators per MW installed. Despite the high installed capacity, the
actual utilization of wind power in India is low because policy incentives are
geared towards installation rather than operation of the plants. This is why
only 1.6% of actual power production in India comes from wind although the
installed capacity is 6%. The government needs to consider the addition of
incentives for ongoing operation of installed wind power plants.
Geothermal energy is another neglected area. India is estimated to have

10,600 MW of geothermal power generation potential but is absent from the
sector altogether. Indian has 400 geothermal springs, clustered in seven
provinces. The most promising provinces are i) The Himalaya, ii) Sohana,
iii) Cambay, iv) Son-Narmada-Tapi (SONATA) and v) the Godavari. With
the recent volcanic eruption, the Barren island, a part of the Andaman-
Nicobar chain of islands, is added to the above list. Most of them are liquid
dominated systems with one or two having both liquid and gas dominated
systems. Still, no benefits or incentives have been formulated for this sector
by the government, even though the private sector is showing a concrete
interest in this area. As a result, Indian firms are turning to foreign financial
institutions for investment, but without the support of the government the
chances of their success seem to be bleak.
20
Lastly, the government also needs to concentrate on power conservation.

Just as money saved is money earned, power saved is power generated. The
use of LED lights should be promoted as they can arrest power usage to a
large extent. Transmission and distribution need to be drastically curtailed. A
recent study by the National Productivity Council, the total energy saving
potential was 75,360 units in 2007-08. Recent initiatives like introduction of
standards and labeling for consumer durables, etc. are aimed towards
conserving power. Experts are also proposing such labeling for commercial
vehicles. The six5 key industries namely aluminum, cement, fertilizers, pulp and
paper, petrochemicals and steel consume about 65% of the total energy use in
India. One of the main reasons for higher energy use is the presence of obsolete
and energy inefficient processes in some of these sectors. Measures like
increasing energy efficiency of the industry and transport sector would help us
reduce the energy industry intensity by 25% by the year 2020. Some more
steps could be undertaken to supplement energy conservation like b anning the
import of second-hand machinery e.g. sponge, iron plants and paper mills,
use of cleaner fuels, facilitating shifts towards cogeneration, tapping waste
heat for process heat, raising awareness among Small scale industries, etc.
4. Conclusion
Power is a sector that serves as the backbone for any industrialized
countries progress. All other sectors are dependent on this sector for
survival. It can be said that a lot of changes have taken place in the power
sector. The rise of new players, liberalization of government policies,
introduction of legal reforms have shown a ray of hope for this sector. The
government needs to take a holistic approach towards the sector in order to
cut the power deficit. Commissioning projects is easy but monitoring them
equally hard. The long execution times, poor project management skills and
consistent delays and high transmission and distribution losses have thrown
21
the country into a crisis. If timely action is not taken, this will seriously
jeopardize the countries growth prospects.
The country also needs to look at other alternative sources of energy.

Though India has coal reserves of 197 billion tones, the rising content of ash
in poses some grave problems. Overall the fossil fuel reserves are depleting
speedily. With a large scope in solar and wind energy and large reserves of
geo-thermal energy in its womb, investing in renewable sources of energy
makes for a wise decision for the country. The government needs to take
note that the power sector does not operate in isolation but is dependent on
a variety of factors. It needs technological, infrastructural and logistical
support from the government. The role of the government in building an
efficient logistics support system is unavoidable. Also, the government needs
to focus on the proper development of human resources to cater to the
energy sector.
22
References :
1. http://www.kseboa.org/news/664-11-power-deficit-in-india-central-electricity-
autority.html
2. KPMG report.
3. http://en.wikipedia.org/wiki/Solar_power_in_India
4. http://www.powermin.nic.in/whats_new/pdf/Ministers_artical.pdf
5. http://www.iitk.ac.in/infocell/Archive/dirmar1/power_distribution.html
6. http://en.wikipedia.org/wiki/Electricity_sector_in_India
7. http://www.in.kpmg.com/TL_Files/Pictures/PowerSector_2010.pdf
http://www.cea.nic.in/power_sec_reports/Executive_Summary/2008_12/27-33.pdf
23

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A Report on Power Industry

Power Sector in India

How does Power reach us?

Electric power is normally generated at 11-25kV in a power station. To transmit

240V (as single-

The contribution of different sources of power generation can be classified as:

Thermal Power Installed

• Unbundling of the State Electricity Boards: These boards have been

• Privatization of power distribution: This has been done through either

• Launch of Accelerated Power Development & Reform Programme

The Distribution companies face problems due to inefficiencies in metering, billing

Figure: Classification of customers of Electrical Power in India

Figure: Different players in the Power Sector

The electricity sector in India is predominantly controlled by the Government of

Besides PSUs, several state-level corporations, such as Maharashtra State

The PowerGrid Corporation of India (PGCIL) is responsible for the inter-state

Role of Public and Private Sector

Some of the important private players in the sector include

The 5 year plans

Capacity Enhancement: Targets and Achievements

Figure: Capacity Addition-Targets and Achievements

Power for all by 2012

o Distribution strategy to achieve Distribution Reforms with focus on System

According to CRISIL Research estimates, about INR 7,50,000 crore is likely to be

2.Major Players in the Market

NTPC Limited, India’s largest power company with an installed capacity of

Tata Power Company Limited

It Started as the Tata Hydroelectric Power Supply Company in 1911, it is an

venture is India’s first transmission project to be executed with public-

GMR Power Corporation Pvt ltd

A distinguishing feature of this plant is a sophisticated sewage treatment

Reliance Energy Ltd

Reliance Energy is India’s largest integrated private sector power utility

generation and plant productivity.

Jindal Steel and Power Limited

Jindal Power Limited is expanding its capacity at Tamnar by setting up a

Existing total transmission capacity is just 13 % of the total power

3.Challenges and Opportunities

One of the biggest challenges of India is to cut on the power deficit.

It needs to be analyzed as to why there has been a consistent failure 3 in

Fuel availability is another major problem. Coal is the mainstay of power

Equipment shortage is another reason for delay in the commissioning of

merely 2.12 MW. Government-funded solar energy in India only accounted

Geothermal energy is another neglected area. India is estimated to have

Lastly, the government also needs to concentrate on power conservation.

The country also needs to look at other alternative sources of energy.

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