INDUSTRY INTRODUCTION
While the power sector in India has witnessed a few success stories in the last 4-5 years, the road that lies ahead is dotted with innumerable challenges that result from the gaps that exist between whats planned versus what the power sector has been able to deliver. Indian Power Sector has an installed capacity of about 1,87,500 Mega Watts, the world's fifth largest.Thermal power plants constitute more than half of the installed capacity, hydroelectric about 21% and rest being a combination of wind, small hydro, biomass, waste-to-electricity, and nuclear. In terms of fuel, coal-fired plants account for 55% of India's installed electricity capacity. After coal, renewal hydropower accounts for 21%, and natural gas for about 10%. The per capita average annual domestic electricity consumption in India in 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 2600 kWh. The International Energy Agency estimates India needs an investment of at least $135 billion to provide universal access of electricity to its population. There are estimates that India will add between 600 GW to 1200 GW of additional new power generation capacity before 2050. 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. India's electricity sector is amongst the world's most active players in renewable energy utilization, especially wind energy. The industry is further divided based on the control into State (83.6 GW), Central (57.8 GW) and Private (46.1 GW) sectors. The following table gives the classification based on the type of fuel.
Thermal power generation (MW)
104,816.3 8, 85% Coal Gas Oil
1,199.75, 1%
17,742.85, 14%
Total Power Generation(MW)
123758.98, 66% Hydro (Renewable) 38,848.40, 21% Nuclear RES** (MNRE) Thermal 20,162.24, 4,780.00, 11% 2%
The figures released by the Central Electricity Authority (CEA) indicate a 5.5% growth in electricity generation in India. The total thermal generation has achieved a growth rate of 3.81%. Coal-based generation recorded a growth rate of 3.99%. Reliable generation and supply of electricity is essential for addressing India's associated issues. Other drivers for India's electricity sector are its rapidly growing economy, rising exports, improving infrastructure and increasing household incomes. In the recent years, demand for electricity in India far outstripped availability, both in terms of base load energy and peak availability. During peak loads, the demand was for 122 GW against availability of 110 GW, a 9.8% shortfall. India's Central Electricity Authority expects a surplus output in some of the states of Northern India, those with predominantly hydropower capacity, but only during the monsoon months. In these states, shortage conditions would prevail during winter season. The overall electrification rate in India is 64.5% while 35.5% of the population still lives without access to electricity. The 17th electric power survey of India report projects the electrical energy demand by the next 5 years and 10 years to be at least 1392 & 1915 Tera Watt Hours, with a peak electric demand of 218 GW & 298 GW respectively.
INDUSTRY STRUCTURE - CHANGES
The Indian power sector has made significant progress over the years. The installed capacity of the industry grew manifold from 1,361 MW in 1947 to 156.8 GW in 2011. The sector has also undergone substantial structural changes. Regulatory policies have played a predominant role in changing the landscape of the Indian power sector. Since, the industry is mostly regulated by Government, the changes in the industry are also the outcome of changes in government policies over the years. The industry has been regulated for almost a century and the Electricity Act 1910 was the first act that was introduced to govern the Indian power sector. The Electricity (Supply) Act 1948 was introduced after independence, but it did not achieve the desired results, as the power sectors performance started to deteriorate and a need was felt to restructure the sector. Several regulatory changes were made since 1991, which transformed the industrys performance and a big leap in the sector was provided in 2003 through enactment of Electricity Act 2003. The significant structural changes in the industry:
FIGURE 1 INDUSTRY ACTS AND CHANGES
