Power Sector

Power Sector

Power Sector


  • In April 2020, NTPC Vindhyachal became the largest power plant in the country to achieve a plant load factor (PLF) of 100 per cent.
  • India’s rank jumped to 22 in 2019 from 137 in 2014 on World Bank’s Ease of doing business - "Getting Electricity" ranking.
  • Energy deficit reduced to 0.7 per cent in FY20 from 4.2 per cent in FY14.
  • Over 353 million LED bulbs were distributed to consumers in India by Energy Efficiency Services Limited (EESL) under Unnati Jyoti by Affordable LEDs for All (UJALA) in July 08, 2019. 11.17 million LED bulbs were sold by private players till March 2019.
  • As of April 28, 2018, 100 per cent village electrification was achieved under Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY).


Power is among the most critical component of infrastructure, crucial for the economic growth and welfare of nations. The existence and development of adequate infrastructure is essential for the sustained growth of the Indian economy.

India’s 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, a massive addition to the installed generating capacity is required.

In May 2018, India ranked fourth in the Asia Pacific region out of 25 nations on an index that measured their overall power. India was ranked fourth in wind power, fifth in solar power and fifth in renewable power installed capacity as of 2018. India ranked sixth in the list of countries to make significant investments in clean energy at US$ 90 billion.

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 India’s 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).  
By 2022, wind energy is estimated to contribute 60 Gigawatt (GW), followed by solar power at 100 GW, and biomass and hydropower at 15 GW. The target for renewable energy has been increased to 175 GW by 2022.
Total installed capacity of power stations in India stood at 370.34 GW as of April 2020. Electricity production reached 1,252.61 billion units (BU) in FY20.

Reasons for Investment in the Power Industry

  • In March 2020, the Central Government signed a virtual agreement to conclude strategic sales in Kamarajar Port Ltd, THDC India Ltd, and North Eastern Electric Power Corporation Limited (NEEPCO), and it will receive Rs 13,500 crore (US$ 1.93 billion) from these deals.
  • In December 2019, NTPC announced an investment of Rs 50,000 crore (US$ 7.26 billion) to add 10GW solar energy capacity by 2022.
  • In August 2019, Sembcorp Industries, the Singapore-based energy firm, made an equity infusion of Rs 521 crore (US$ 101.6 million) into Sembcorp Energy India Ltd.
  • Brookfield will invest US$ 800 million in ReNew Power.
  • In September 2019, Adani Transmission planned to acquire the entire stake in Bikaner Khetri Transmission.
  • ReNew Power and Shapoorji Pallonji will invest nearly Rs 750 crore (US$ 0.11 billion) in a 150 megawatt (MW) floating solar power project in Uttar Pradesh.
  • The Government of India expected to offer nearly 20 power transmission projects worth Rs 16,000 crore (US$ 2.22 billion) for bidding in 2019.

What are the Government Initiatives for the development of the Power Industry?

  • The Union Budget 2020-21 has allocated Rs 15,875 crore (US$ 2.27 billion) to the Ministry of Power and Rs 5,500 crore (US$ 786.95 million) to Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY).
  • Government plans to establish a renewable energy capacity of 500 GW by 2030.
  • Pradhan Mantri Sahaj Bijli Har Ghar Yojana- Saubhagya was launched by the Government of India with an aim to achieve universal household electrification by March 2019.
  • In September 2018, a draft amendment to Electricity Act, 2003 was introduced. It discussed separation of content & carriage, direct benefit transfer of subsidy, 24*7 power supply as an obligation, penalization on violation of PPA, setting up the smart meter and prepaid peters along with regulations related to the same.
  • Ujwal Discoms Assurance Yojana (UDAY) was launched by the Government to encourage operational and financial turnaround of State-owned Power Distribution Companies (DISCOMS) with an aim to reduce Aggregate Technical & Commercial (AT&C) losses to 15 percent by FY19.
  • In August 2018, the Ministry of New and Renewable Energy set solar power tariff cap at Rs 2.50 (US$ 0.04) and Rs 2.68 (US$ 0.04) units, respectively, for developers using domestic and imported solar cells and modules.
  • The government of India approved the National Policy on Biofuels – 2018. The benefits of this policy were health benefits, a cleaner environment, employment generation, reduced import dependency, a boost to infrastructural investment in rural areas, and additional income to farmers.

The Road Ahead

The Government of India has released its roadmap to achieve 175 GW capacity in renewable energy by 2022, which include 100 GW of solar power and 60 GW of wind power. The Union Government of India is preparing a 'rent a roof' policy for supporting its target of generating 40 gigawatts (GW) of power through solar rooftop projects by 2022.
Coal-based power generation capacity in India, which currently stands at 229.40 GW, is expected to reach 330-441 GW by 2040.

Note: Conversion rate used in April 2020, Rs 1 = US$ 0.013123
References: Media Reports, Press Releases, Press Information Bureau (PIB
Disclaimer: This information has been collected through a secondary source and ASC is not responsible for any errors in the same.

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