Profile
Settings
Refer your friends
Sign out
The electricity industry in India is one of the most diverse globally. Power generating sources include coal, lignite, natural gas, oil, hydro, nuclear power, and possible non-conventional sources such as wind, solar, and agricultural and residential waste. Electricity demand in the country has risen significantly and is anticipated to climb much higher in the coming years. A substantial increase in installed generating capacity is necessary to fulfil the country’s growing need for power.
According to Lowy index that assessed comprehensive power, India placed fourth in the Asia Pacific area out of 26 nations in december 2021. India ranks 4th in wind power, fifth in solar power and fifth in renewable power installed capacity. India ranks sixth on the list of nations that have made significant investments in renewable energy, with a total investment of US$ 90 billion. India is the only country in the G20 that is on pace to meet the Paris Agreement’s objectives.
Market Situation
The Indian power sector is undergoing substantial upheaval, which has changed the industry’s outlook. The country’s continued economic expansion is driving India’s power consumption.
The country’s installed Renewable Energy (RE) capacity was 150.54 GW (solar: 48.55 GW, wind: 40.03 GW, Small hydro Power: 4.83, Bio-power: 10.62, Large Hydro: 46.51 GW), while its nuclear energy-based installed electrical capacity was 6.78 GW.
India has the world’s fourth-largest wind power capacity.
This takes the overall installed non-fossil energy capacity to 157.32 GW, accounting for 40.1 percent of the total installed electrical capacity of 392.01 GW.
At the COP26, India pledged to attain 500 GW of installed non-fossil fuel energy capacity by 2030.
The Indian government’s emphasis on achieving “Power for All” has hastened capacity addition in the country.
Simultaneously, the competition intensity on both the market and supply sides is growing (fuel, logistics, finances, and manpower).
Solar energy is expected to produce 114 GW by 2022, followed by wind power at 67 GW and biomass and hydropower at 15 GW. The Indian government has set an ambitious target of 227 GW of renewable energy capacity by 2022 and 275 GW by 2027.
The overall thermal installed capacity in the nation was 234.44 GW in FY22 (till October 2021). Renewable, hydro, and nuclear energy installed capacities were 103.05 GW, 46.51 GW, and 6.78 GW, respectively.
Challenges
The lack of dependable power continues to be a fundamental impediment to the country’s ongoing industrial expansion, investment, and economic competitiveness. Electricity shortages are predicted to cost the country 7% of its GDP.
Electricity generation/supply has expanded at only 5.3% per year on average.
Improved sector performance is required to ensure long-term and inclusive growth.
The issues that India has in the power industry are significant:
Low access to modern energy
With a predominantly rural population base and limited access to modern energy services, there is a heavy dependence on traditional fuels: non-commercial biomass remains a significant energy source, accounting for more than 30% of the country’s fuel mix.
Over 350 million people still lack access to electricity. A lack of access to modern energy sources limits productivity in rural areas, particularly opportunities for non-farm occupations for the agricultural labour force.
However, demand for modern commercial fuels is rapidly expanding, driven by rising affluence and ever-improving availability.
Despite substantial untapped renewable energy potential, there is a heavy reliance on fossil fuels.
The electrical sector in India is still strongly reliant on fossil fuels (coal). While it has a high hydropower potential (150,000 MW), it pales compared to the country’s energy demands and remains virtually untapped (only 25% potential harnessed so far).
More than 60% of businesses and a significant number of individuals rely on captive or backup production; the anticipated peak power shortfall is 10.3%, and the energy deficit is 8.5%, but actual power shortages on the ground are considerably worse.
Approximately 27,000 MW of existing coal-fired generating capacity must be enhanced in terms of reliability, fuel economy, and environmental performance.
The Indian electrical sector is undergoing tremendous disruption, which has altered the industry’s outlook. India’s power industry has a promising future, and the country’s steady economic growth is driving rising electricity consumption. The emphasis of the Indian government on “Power for All” has hastened capacity addition in the country.
The capacity of the transmission lines rose from 4,25,071 cKm in FY 2019-20 to 4,50,552 cKm in FY 2020-21.
The addition of Transformation Capacity in March 2021 was 10,25,468 MVA, a 6% increase from 9,67,893 MVA in March 2020.
In Fiscal Year 2021-22, the Inter-Regional Transmission Capacity Addition was 1,12,250 MW, up from 99,050 MW in the Fiscal Year 2018-19.
Conclusion
Given that both the national and state governments are responsible for its growth, the Indian electricity industry is highly complicated. Any effective infrastructure development (power plant, transmission, or distribution lines) needs buy-in from many stakeholders in the federal and state governments. A lot of electricity generation and distribution businesses are now under tremendous financial hardship due to industry-wide difficulties that are beyond their control. With the evolution of legislation controlling the power industry (such as modifications to the Energy Act 2003), the role of numerous players is projected to alter, resulting in simplification of the process of generation, transmission, distribution, and use of electricity.
