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July, 2011

Power Sector in India: Introduction

As the Indian economy continues to surge ahead, its power sector has been expanding concurrently to support the growth rate. The demand for power is growing exponentially and the scope of growth of this sector is immense.

The total installed capacity of India in 2011 is estimated to be around 1,76,990.40 mega watt (MW).Thermal power in India is responsible for two-third of power generation in India which includes using gas, liquid fuel and coal. This year thermal power in India has provided 115649.48 MW in which 96,743.38 MW was generated from coal, 17,706.35 MW from Gas and 1,199.75 MW from oil. Further, Hydro power in India (Renewable) provided 38,106.40 MW, Nuclear power provided 4,780.00 MW and RES (MNRE) 18,484.52 MW.

Power in India: Growth Drivers

In terms of power generation, India is the sixth largest in the entire world. Over the past 30 years the demand for power in India has enhanced at 3.6 per cent per annum on the back of economic growth of India. The per capita energy consumption was at 733.54 kilowatt in the year 2008-2009. The Government of India has set the target ‘Power for all by 2012’ to meet with the energy requirement of the entire country, byadding 78,000 MW of installed generation capacity by 2012. According to the experts, the total demand for electricity will be above 950,000 MW by 2030. India has taken all the steps needed to provide energy from renewable sources such as wind andsolar power. In March 2011 the capacity of wind power in India stood at around 12,000 MW.

Azure Power, a producer in solar energy working independently, has announced a long term financing tie-up with Exim Bank worth US$ 16 million. The main aim of the collaboration is setting up a 5 mega watt (MW) solar power project in Rajasthan.

"India has set ambitious goals to promote solar power. Exim Bank is working with U.S. exporters to make sure that they have a platform to participate in the development of solar sector in India," according to Fred P. Hochberg, Chairman and President of the Export-Import Bank of the United States.

“The world wind power market wants India to design a small wind-solar hybrid system and commercialise it globally as there is a fast growing market for efficient, cost-effective and sustainable sources of energy,” said Steve Sawyer, General Secretary of the Global Wind Energy Council (GWEC).