Indian Power Sector

The Indian Power Sector has evolved into a thriving and profitable industry. Given that India would expand by more than 7% over the next few years, the power demand will rise by around 10%. Power is one of the most important infrastructural elements, essential to national well-being and economic development. Read here to know more about Indian Power Sector.

For the Indian economy to grow steadily, enough electrical infrastructure must exist and be developed.

Universal access to inexpensive power in a sustainable manner has been the guiding philosophy of India’s power sector.

The Ministry of Power has been working hard over the past several years to construct a unified national grid, strengthen the distribution network, and achieve universal household electrification to transform the nation from one with a power shortage to one with a surplus.

Indian Power Sector

India’s power sector is one of the most diversified in the world.

• The sources of energy used to generate electricity range from reliable non-conventional sources like wind, sun, agricultural waste, and household waste to traditional sources including coal, lignite, natural gas, oil, hydropower, and nuclear power.
• The demand for electricity in the nation has risen quickly and is anticipated to do so in the years to come.
• Massive additions to the existing producing capacity are necessary to keep up with the nation’s rising demand for power.

India is the only G20 country that is on pace to meet the Paris Agreement‘s goals.

India is the third-largest producer and consumer of electricity worldwide, with an installed power capacity of 411.64 GW as of January 31, 2023.

• India’s installed renewable energy capacity (including hydro) stood at 168.4 GW, representing 40.9% of the overall installed power capacity.
• Solar energy is estimated to contribute 63.3 GW, followed by 41.9 GW from wind power, 10.2 GW from biomass, 4.92 GW from small hydropower, 0.52 from waste to energy, and 46.85 GW from hydropower.
• As of March 2023, India has a total thermal installed capacity of 237.2 GW of which 57.7% of the thermal power is obtained from coal and the rest from Lignite, Diesel, and Gas.
• The private sector in the power industry in India generates 50.5% of the country’s power, whereas States and the Centre generate 24% and 25.4%, respectively.

India has huge ambitions in energy transition and plans to have 500 GW of non-fossil-based electricity installed capacity by 2030 so that non-fossil cleaner fuel comprises 50% of the installed capacity mix by 2030.

100% FDI in the power sector in India is allowed for generation from all sources (except atomic energy), transmission and distribution of electric energy, and Power Trading under the automatic route.

Government initiatives for the power sector

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

• Under the Union Budget 2022-23, the government announced the issuance of sovereign green bonds, as well as conferring infrastructure status to energy storage systems, including grid-scale battery systems.
• The Green Energy Corridor projects have been initiated to facilitate renewable power evacuation and reshape the grid for future requirements.
• To encourage rooftop solar (RTS) throughout the country, the Ministry of New and Renewable Energy has developed a National Portal wherein any residential consumer from any part of the country can apply for rooftop solar without waiting for Discom to finalize tender and impanel vendors.
• Production Linked Incentive Scheme (Tranche II) on ‘National Programme on High-Efficiency Solar PV Modules’.
• National Smart Grid Mission (NSGM)
• Electrification in the country is increasing with support from schemes like Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY), Ujwal DISCOM Assurance Yojana (UDAY), and Integrated Power Development Scheme (IPDS).
• Pradhan Mantri Sahaj Bijli Har Ghar Yojana, “Saubhagya”, was launched by the Government of India to achieve universal household electrification.
• Mission on Advanced and High-Impact Research (MAHIR) was launched recently to leverage Emerging Technologies in Power Sector.
• National Mission for Enhanced Energy Efficiency (NMEEE) is one of the eight missions under the National Action Plan on Climate Change (NAPCC).

Read: Battery Energy Storage System (BESS); PM-Surya Ghar Muft Bijli Yojana

Challenges

• 7% of the thermal power is obtained from coal and the rest from Lignite, Diesel, and Gas, the environmental repercussions of fossil fuel-based energy generation are known to all.
• One of the most frustrating issues facing the Indian electricity industry is the high distribution-line losses.
• Since the majority of power plants and transmission lines were put in place just after independence, they are now outdated and ineffective.
• State Discoms’ financial health has been negatively impacted by years of populist tariff schemes, rising losses, and operational inefficiencies, which are now beset by enormous outstanding debts.

Also read: Toy Industry of India

Way forward

Regarding demand growth, energy mix, and market operations, the Indian electrical industry is projected to see a significant transition in the current decade (2020-2029).

India intends to make sure that everyone always has dependable access to enough power and that the transition to clean energy is accelerated by reducing its reliance on unclean fossil fuels and shifting towards cleaner, renewable energy sources.

• Future investments will profit from sound demand fundamentals, favorable policy, and a growing emphasis on infrastructure by the government.
• The Indian government is putting up a “rent a roof” scheme to help it meet its goal of using rooftop solar systems to produce 40 GW of electricity by 2022.
• By 2031, it also intends to develop 21 more nuclear power reactors with a combined installed capacity of 15,700 MW.

India’s electricity needs, according to the Central Electricity Authority (CEA), are expected to increase and reach 817 GW by 2030.

• Additionally, the CEA predicts that by 2029–2030, the percentage of renewable energy generation would rise from 18% to 44%, while the share of thermal energy generation will fall from 78% to 52%.

By 2030, the government wants to install 500 GW of renewable energy capacity.

-Article written by Swathi Satish